x Abu Dhabi, UAEWednesday 24 January 2018

Green shoots need nurturing

The Life: Has the Arab Spring helped - or hindered -entrepreneurs within the region who aspire to start their own business?

There was an increase in start-ups businesses in Egypt last year despite turbulence in the country's economy. Tara Todras-Whitehill / AP Photo
There was an increase in start-ups businesses in Egypt last year despite turbulence in the country's economy. Tara Todras-Whitehill / AP Photo

During the past year, the Arab Spring has inspired a new wave of budding entrepreneurs.

But some aspiring business owners are still finding it tough.

"The Arab Spring has helped entrepreneurship," says Rabea Ataya, the chairman and chief executive of Bayt.com, a regional job-search site.

"A lot of people who were in cushy jobs, whether banking or real estate sectors, have suddenly found between the Arab Spring and global economic crisis that they're out of a job - or their jobs are not providing them with as much satisfaction," he adds. "A lot of these people are turning to entrepreneurial ventures."

But unemployment is still a big problem. In Egypt, the unemployment rate hit 11.9 per cent during the third quarter last year, the highest level in a decade.

It is 19 per cent in Tunisia but generally believed to be "much higher" in some regions of the country, according to the US department of state.

Mr Ataya regularly gets emails from "people knocking on my door", pitching ideas, he says. "This is definitely accelerating from the last couple of years."

Khaled Ismail saw an increase in the number of start-ups launched in Egypt last year, even as the country's economy suffered. As the board chairman of Endeavor Egypt, Mr Ismail helps select, mentor and accelerate the growth of small but successful local ventures that are at least two years old.

Many university students who graduated in 2009 and 2010 have started their own businesses, Mr Ismail says, "because of the lack of availability of jobs".

Other individuals have been inspired by the hope of a better future. "It's a mindset change," he says.

"I think it was an indirect and positive affect on convincing many young people to start their own businesses."

Yet many entrepreneurs face hurdles when trying to set up a new company.

Some experts warn there is still far too much red tape for entrepreneurs, which makes it overly challenging to get going. And while there is more venture capital funding available now than in the past, not all business owners are able to tap these sources.

Technology start-ups tend to receive a higher portion of money. But even then companies such as ecommerce websites face hurdles including poor infrastructure in certain countries, which can lead to shipping and logistical delays that ultimately curb revenue growth, Mr Ataya says.

"The barriers are many."

Others caution that countries in the region could be hit by further unrest this year if governments fail to address these issues for entrepreneurs, some of whom make up the young, tech-savvy portion of the population involved in the wave of protests seen in some countries last year.

"Unless they get the support and opportunity to produce the idea [they have], they're going nowhere," Afnan Al Shuaiby, the secretary general and chief executive of the Arab-British Chamber of Commerce, said recently during a trip to Dubai.

"[Without out such help] this will create, if I may say, chaos," she says.


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