High-Impact Entrepreneurship

Global Board Member Fadi Ghandour Discusses Barriers to Scale for MENA Entrepreneurs

dubaiThis post comes from Fadi Ghandour, who is the founder of Aramex, a board member of Endeavor, and the Chairman of Wamda, an organization that works to empower entrepreneurs in the MENA region. View the original post on the Entrepreneurship Ecosystem Insights page.

“Two-thirds of the Arab World ‘s population is below the age of 29. The region is not only growing younger, but also becoming more literate. With rising levels of education, connectivity, and mobility, the biggest challenge remains: How do we create good jobs for the restless millions?

Entrepreneurs are drivers of growth, innovation, and competitiveness. A recent World Bank report on small and medium sized companies (SMEs) shows that the highest contributors to employment are firms with less than 100 employees. And, not surprisingly, it is scalable businesses that generate the biggest share of economic opportunities. A study conducted by the World Economic Forum in collaboration with Stanford University and Endeavor in 2011 reveals that the top 5% of the 380,000 companies surveyed across 10 European and Asian countries have generated 72% of total revenue and 67% of the total employment recorded by these companies.

And yet, although scalability is critical for job creation, company founders still encounter many barriers when starting and growing their businesses. For startups to thrive, the different ecosystem players must understand the nature and source of these obstacles and work hard to eliminate them. But without comprehensive, up-to-date data they will not be able to craft viable, practical solutions.

Wamda’s newest initiative, the Wamda Research Lab (WRL), is focused on publishing research and insights on regional entrepreneurial activity to inform policy makers, investors, and other stakeholders on the critical challenges and gaps in this space. In its first report, The Next Step: Breaking barriers to scale for MENA entrepreneurs, WRL identifies the hurdles company founders face in generating revenues, raising capital, attracting talent, building teams, and facilitating expansion. Our study reveals that 63% of entrepreneurs and 60% of experts consider finding talent to build teams as a major challenge. Access to new markets is yet another central issue: 47% of entrepreneurs and 50% of experts cited difficulty in finding partners to facilitate expansion as an impediment to scale. Moreover, 41% of entrepreneurs said that the biggest restraint to generating revenues is marketing products and services.

The fact remains that the region’s outdated education systems, which continue to graduate generations of unemployable youth with no competitive 21st century skills, and its fragmented markets that allow little mobility of people and companies, are stifling the growth of entrepreneurs, and innovators. Unemployment needs to be considered in every policy, national strategy, private-sector initiative, and social activity. It is time we collectively deploy our knowledge, resources, capital, and networks to enable entrepreneurship as a development tool. I encourage all stakeholders – governments, investors, entrepreneurship institutions, universities, civil society, large corporations, and entrepreneurs – to read this report and take its conclusions seriously, in the hope that they will trigger effective action and positive change.

Finally, I would like to thank Endeavor Insight for their guidance, support, and expertise throughout the entirety of this project.”

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