Why en­trepreneur­ship will ac­cel­er­ate in Mid­dle East

The Pak Banker - - Front Page - Dr Hayat Sindi

AT a time when the en­tire Mid­dle East is look­ing to­wards a new dawn, it is good to re­mind our­selves of an era when in­spi­ra­tion, in­no­va­tion and en­ter­prise com­bined to make it the cen­tre of the world. The re­gion cra­dled flour­ish­ing civil­i­sa­tions Me­sopotamia, Egypt, Assyria that rep­re­sented the very pin­na­cle of hu­man achieve­ment in the an­cient world. Dur­ing the Is­lamic Golden Age, which lasted from 750 to 1258CE, the Arab world once again be­came the ral­ly­ing point for knowl­edge and progress. The era saw the rise of the likes of the sci­en­tist and poly­math Ibn Al Haytham, whose seven-vol­ume Ara­bic treatise on op­tics, Kitab Al Manazir, ex­erted a sig­nif­i­cant in­flu­ence on West­ern sci­ence. In 859CE, the vi­sion­ary Fa­tima Al Fihri pi­o­neered the es­tab­lish­ment of the Univer­sity of Al Karaouine in Fez, Morocco, which re­mains the world's old­est func­tion­ing in­sti­tu­tion of higher learn­ing.

Since pros­per­ity is very rarely an ac­ci­dent, it can be anec­do­tally ar­gued that such achieve­ments were the di­rect con­se­quence of gifted minds whose unique, in­no­va­tive ideas were iden­ti­fied, nur­tured and pro­gressed to per­fec­tion by com­pa­tri­ots. This, then, may have rep­re­sented ven­ture cap­i­tal­ism and an­gel in­vest­ing in its pri­mary form. The spec­tac­u­lar re­sults are still ev­i­dent for the world to see.

His­tory aside, the re­la­tion­ship be­tween in­no­va­tors and in­vestors is sym­bi­otic. There is a limit to which en­trepreneurs and in­vestors can keep mul­ti­ply­ing for­tunes in a given sce­nario. Dis­rup­tive in­no­va­tions the kind that jolt the sys­tem, thereby cre­at­ing new lev­els of prod­ucts and ser­vices, new mar­kets and value net­works are needed to help in­vestors power through such walls. In the process, in­no­va­tors who are en­abled may be­come busi­ness­peo­ple them­selves. This was seen in the case of Thomas Alva Edi­son. Not only did Edi­son's in­ven­tions and in­no­va­tions like the phono­graph, the mo­tion pic­ture cam­era, and the first com­mer­cially vi­able elec­tric light bulb change the world, he also went on to es­tab­lish Gen­eral Elec­tric, the world's third largest com­pany ac­cord­ing to Forbes Global 2000.

The Mid­dle East needs to re­sound with such success sto­ries. En­cour­ag­ingly, var­i­ous coun­tries in the re­gion have formed eco­nomic clus­ters, such as the King Ab­dul­lah Eco­nomic City in Saudi Arabia, Dubai In­ter­net City in the UAE, and Smart Vil­lage in Egypt be­sides the off-shore joint-ven­tures in Casablanca, Rabat and Tang­iers in Morocco all de­signed to pro­mote in­no­va­tion by seek­ing to bring to­gether tal­ent and in­vest­ment within one en­abling ecosys­tem. While such ini­tia­tives are salu­tary, much more needs to be done. This is borne out by The Global Com­pet­i­tive­ness In­dex 2012-2013 re­leased by the World Eco­nomic Fo­rum: on the 'in­no­va­tion and so­phis­ti­ca­tion' front, just three out of a to­tal of 22 Arab coun­tries fig­ure in the top 30 list Qatar (ranked 15), UAE (ranked 25), and Saudi Arabia (ranked 29). The same in­dex holds Sin­ga­pore in eleventh place out­stand­ing for a tiny na­tion with a pop­u­la­tion of 5.3 mil­lion! Amaz­ingly, Sin­ga­porean stu­dents are among the world's best scor­ers in math­e­mat­ics and sci­ence. The coun­try comes fifth in terms of col­lab­o­ra­tion be­tween its univer­si­ties and in­dus­try in the re­search and devel­op­ment space. More­over, its government takes an ex­em­plary lead in in­cen­tivis­ing in­vestors to men­tor bud­ding en­trepreneurs.

There are sev­eral rea­sons why in our own re­gion, gaps re­main in the ecosys­tem needed to drive the in­ter­ac­tive process be­tween in­no­va­tors and in­vestors. For one, there is no clear pan-Arab author­ity that over­sees the prepa­ra­tion of quan­ti­ta­tive and qual­i­ta­tive data for the re­gion. Such con­di­tions of low vis­i­bil­ity aren't par­tic­u­larly use­ful to po­ten­tial in­vestors, es­pe­cially in the cur­rent macroe­co­nomic cli­mate. An in­vestor who does not see suf­fi­cient rea­son to cap­i­talise on in­no­va­tion in the Arab world ei­ther be­cause he has lit­tle faith in the cal­i­bre of such home-grown tal­ent or be­cause there isn't suf­fi­cient data that would al­low him to make sound in­vest­ment de­ci­sions would mean a ter­ri­ble waste of op­por­tu­nity in­deed! Arab in­no­va­tors would lose out too. They are hardly stim­u­lated when Arab in­vestors shy away from ex­tend­ing the com­mit­ment re­quired to grow their ideas. In­stead, they may take their tal­ent some­place else, where faith, in­vest­ment and men­tor­ship would be more forth­com­ing.

To re­turn to the point made at the start of this opin­ion, it is cer­tainly good to re­mem­ber the unique glo­ries of the an­cient Mid­dle East. How­ever, the mak­ing of an in­no­va­tive so­ci­ety is not like rid­ing the bi­cy­cle if we have done it be­fore, it is not a given that we can do it again.

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