Disruption, Globalization, and Entrepreneurship, what is EDB’s role in the future of entrepreneurship in the Kingdom of Bahrain? One of the Kingdom’s influential leaders is bringing unprecedented opportunities to the forefront. What’s your greatest wish for entrepreneurs? Read on.
Thank you for your time and for this opportunity. Would you mind giving our readers some background on yourself and the Economic Development Board (EDB)?
Sure. Prior to joining the EDB I was in the banking sector. I spent approximately nine years with JP Morgan, working out of London in the corporate finance area. I spent another 11 years with Investcorp, doing private equity: real estate and hedge funds.
I have been Chief Executive of the EDB since March 2015. The EDB was founded by His Royal Highness the Crown Prince , First Deputy Prime Minister, and Chairman of the EDB in the year 2000. A lot of the economic reform that has happened in this country has been incubated and managed with other ministries through the EDB: from the creation of the Telecommunications Regulatory Authority (TRA), the liberalization of the telecom sector, the creation of the LMRA, and the introduction of labor mobility. These are all initiatives that were brainstormed and developed by the EDB.
Since joining the EDB, I have been asked to focus on attracting investment. I want to correct a misconception that we focus only on Foreign Direct Investment (FDI). Sure, we focus on attracting foreign capital, but we also look at capital as a whole, whether it’s foreign, domestic, or regional. We are looking to attract investment in key sectors that we have outlined in which Bahrain has a competitive advantage. We’ve allocated a team tasked with attracting direct investment in those sectors and we seek to create growth and job opportunities while expanding the basis of the economy in non-oil sectors.
Excellent. What is the future of this mandate when it comes to startups and the entrepreneurship ecosystem?
We’re aligned in our goal to cultivate an environment that encourages SMEs to develop. Technology is going to continue to disrupt every industry, across all sectors. This is happening because of entrepreneurs—people who develop new concepts. It’s a new world we’re entering, and technology can be born here in Bahrain.
Perfect. What is the EDB trying to remove, in terms of barriers, to make this possible?
We’re working with the Ministry of Industry, Commerce and Tourism, the Central Bank of Bahrain (CBB) and all other Ministries to identify regulatory improvements that will ease the process of doing business.
We also want to amend our bankruptcy laws, because failure is inevitably on the path to entrepreneurship and success. Right now, if you’ve failed, you can’t open a bank account. You’re blacklisted. That doesn’t encourage failure—it encourages people to be conservative. In the context of Tamkeen, entrepreneurs need not just capital, but smart capital: capital with advice. We want to have three or four incubators and accelerators that will first screen ideas, then give you a four-month training period that includes marketing, business set-up, and global mentorship from entrepreneurs. We’ve recently worked with Amazon web services and C5 to set up the first cloud-based accelerator in the Middle East and Africa. In the first cohort, 10 companies will be selected to join the program, and then another 10. These startups will receive mentorship from entrepreneurs in the U.S. through the Amazon network, and then potentially get funded by a Bahrain-based $100 million VC fund that will be managed by C5.
I’m an angel investor. I’ve seen the way companies struggle especially in the technology sector. When they want to raise capital, they end up looking to friends and family, and then they ask you, “What should I do with my business? How do I grow?” They’re thirsty for advice.
We want to create a system that allows them to get that advice within a structure and the Amazon and C5 accelerator is one example, and we want to create many more, where entrepreneurs can get practical advice and mentorship to allow them to take their business to another level.”
IF YOU’RE IN BAHRAIN, YOUR AMBITION SHOULD BE TO GROW BEYOND US. YOU SHOULD BE THINKING REGIONALLY, AT A MINIMUM, AND YOU SHOULD BE DOING THIS FROM EARLY ON.
Excellent. Would you mind addressing any other missing gaps when it comes to raising funds?
Bank financing is currently funneling into the establishment of businesses, but it’s not going to high-risk smaller businesses, so we need to get that right. Bahrain Development Bank (BDB) is certainly a part of that effort, but it should also extend to other entities. The bank financing market is not friendly to entrepreneurs and SMEs at the moment.
Correct. We have a lot of good Bahraini brands and successful entrepreneurs, but going global or regional is extremely difficult. Why do you think that is the case?
If you ask venture capitalists and investors what they look at when evaluating a business, they’ll tell you, “I look 90 percent at the entrepreneur, 10 percent at the idea.” Any business plan will need to pivot, change, and adapt, but it’s the person and their passion and ability to lead this small team—and be smart and nimble enough to network—that will make the difference.
If you’re in Bahrain, your ambition should be to grow beyond us. You should be thinking regionally, at a minimum, and you should be doing this from early on.
Absolutely. What is the responsibility and the role of entrepreneurs in Bahrain towards the national economy?
Their responsibility is to succeed. Make money, profit, employ more people and grow. If a business is growing, they’re serving their economy. We have to find out what we need to do to get people to start their own businesses and then become successful role models, so they can encourage others to do the same. We need that dynamism, the ability to nurture individual superstar entrepreneurs.
Do you think we aren’t seeing new successes like the ones we had in the 70s because of too much saturation in the market, or is that just an excuse?
Saturation can apply in certain areas —but if you have a good idea and think about disruption, you can find a niche for yourself.
I think mindset is something we need to address. Am I really going to succeed? People tend to look at challenges and fear them, and then when they finally take a risk, they sometimes find the funding or the mentorship missing. That is an inhibitor. We want to correct that.
One of the big changes happening right now is that companies like Uber are competing with the whole industry rather than just one company. They’re disrupting everyone. Do we have a framework that could enable such disruption in Bahrain?
I think so. If there’s regulation that prevents that, I want to know what it is and we’re going to make sure we change that. Why can’t we have an Islamic online bank for example? The Financial Services sector is ripe for disruption. If it’s happening across the world, why can’t Bahrain at least be a part of that?
What is the responsibility of current local businesses, including investors? Are they doing enough to help build this ecosystem?
There are many examples of businessmen and women helping the community. I know there’s a desire to help. If there was a need, they will be there, and when we say we would love the business community to help us fill an identified gap, I think they would rise to the call.
THE FINANCIAL SERVICES SECTOR IS RIPE FOR DISRUPTION. IF IT’S HAPPENING ACROSS THE WORLD, WHY CAN’T BAHRAIN AT LEAST BE A PART OF THAT?
Do you think investors see that need today?
Together with them, I think we’ll find out. I haven’t yet seen them be unsupportive or unresponsive. They’re not just doing this out of philanthropy. They want to give back to the community, but they are also investing to learn, especially in technology. They want to learn from it, and how to benefit and integrate the technology that helps their businesses.
They don’t want to miss out.
Exactly. I see this responsiveness.
Great! I hope so. Thank you for this opportunity.
You’re welcome.