On the outset, entrepreneurship in the Middle East is flourishing – the region is currently enjoying big investments that have resulted in numerous startup companies emerging such as Careem, Carriage, Eatapp, Malaeb, GetBaqala and the list goes on. No one can deny the surge of innovation that’s been spreading around in the Middle East, you can even feel the excitement rushing through entrepreneurs when you follow the startup scene here.
But it’s not always sunshine and rainbows. There are other things bubbling underneath the surface of entrepreneurship– challenges entrepreneurs must be prepared to face and solve the success story to continue.
If you take a closer look at the region’s ecosystem, you will find yourself with five major challenges. Here’s a look at each of them, accompanied by possible solutions.
- No robust and flexible regulatory system. One of the major challenges startups and business have to deal with everywhere in the world is the navigation of the regulatory systems around them. In many parts of the world, the history of entrepreneurship has helped forge a robust system that can respond to challenges and make becoming an entrepreneur easier. Despite the regional governments in the Middle East taking steps to improve the lives of companies, the regulatory system is not yet as robust and flexible as it could be.
Setting up a business can still take a long time in some parts of the Middle East. When the business is finally running, the regulatory framework is often complex and rigid – causing the entrepreneurs to spend a lot of time working on issues that don’t have a direct impact on the business’ success or day-to-day dealings. - Lack of a co-operative business culture. Because entrepreneurship is still in its infancy stages in the region, there has not been enough focus on creating strong networks of entrepreneurs. Although the situation is certainly improving, the region needs to focus on creating a more co-operative business culture. This means using avenues to forge partnerships and sharing information.Newcomers in the world of startups often come face-to-face with issues such as marketing problems, gaps in the ecosystem and insufficient access to information. With stronger support networks, these issues could be solved and often, in ways that would benefit both parties. A good example of the situation is the use of local small business HR software – it helps build a startup with local knowledge and expertise.
- Weak training in entrepreneurship. Overall, the region needs more training in entrepreneurship. The educational system does not support the entrepreneurial minds enough. It’s important to realize that the region doesn’t lack talent or innovation – there are plenty of examples of both across the Middle East. The problem is that those innovative and curious minds are not trained into the business mindset. There is not enough mentoring, partly because of the above-mentioned lack of cooperation.When you don’t train and mentor people in running a business, managing people and getting around the regulatory framework, you can’t expect a flurry of companies. The risks to start can be too high and safety nets are not in place to allow failure. Therefore, entrepreneurs like Bayzat’s Talal Bayaa can play a crucial role in sharing expertise and experiences with the budding entrepreneurs of the region.
- Limited market size. The region will also need to start thinking about scaling. Some market spaces within the Middle East are not sustainable for a competitive business landscape. You do not want to end up with a system that supports only the biggest players or a market that’s excessively fragmented. There has to be a conscious effort on part of the entrepreneurs and the governments to boost market size – by opening external markets within the region but also making it easier for businesses to scale globally.
- Risky perceptions by big investors. Although investment is slowly flowing into the region, there are still concerns regarding the investment landscape. First, while companies like Bayzat have enjoyed a great deal of investor support for their small business HR software solutions, these success stories are not happening at a rate the region can’t handle. Investment is not always spreading evenly across, especially in terms of different market spaces.
The second big point to make is the continued risky perceptions investors have of the region. The problematic and often wrong view is that the region has too much political turmoil. While this tends to be due to lack of investor knowledge of the market, the perception can be damaging to the region’s budding entrepreneurs.
Overcoming the challenges of entrepreneurship in the Middle East
In order to overcome the above challenges, the region has to be more willing and focused to invest on its entrepreneurs. There has to be a conscious effort on part of the current and future entrepreneurs to build an ecosystem of entrepreneurship. This will, undoubtedly, require a legislative effort and changes but also a change in the mindset – where the success of your competition is not seen as an automatic bad but rather an opportunity for all.