A recent survey suggests that almost seven out of 10 employees want to start their own companies despite concerns over procuring finances.
The pull of self-employment is as strong as ever in the region, according to a recent report by Middle East jobs site Bayt.com and global research firm YouGov.
In Bayt.com’s survey, Entrepreneurship in the Middle East and North Africa 2019, in the UAE some 69 per cent of respondents said they want to quit their current job and be their own boss instead. 54 per cent cited freedom over their work-life balance as the reason behind their thinking, while 42 per cent of them said they aimed to find personal fulfilment.
What’s more, some 73 per cent admitted that they are currently thinking of starting a business, while only 7 per cent say they have never thought of starting their own business.
Looking at the wider MENA region, for those who had already made the leap into entrepreneurship, 33 per cent said they left their previous jobs in order to increase their income, while 27 per cent said they wanted to do something they loved, and 25 per cent said they had a great business idea or concept.
The most appealing industries for prospective entrepreneurs were found to be IT / internet / e-commerce (10 per cent), commerce / trade / retail (9 per cent), consumer goods / FMCG (8 per cent), and real estate/ construction/ property development (8 per cent).
The report was published shortly after recruitment firm Robert Walters shared their own new research, which showed 73 per cent of professionals in the Middle East have left a job because they disliked the company’s culture. Some 82 per cent said they have previously worked for a company where they disliked the company culture. Both statistics suggest a further reason the number of would-be entrepreneurs is so high.
Bayt.com’s report also shows that the main concern of respondents while setting up their own business would be procuring finances to start (61 per cent), and the uncertainty of profit or income (41 per cent).
These concerns haven’t stopped increased numbers of people opening businesses – at least in Dubai, where the number of new business licenses in the first four months of 2019 grew by 35 per cent compared to the same period in 2018. The emirate’s Department of Economic Development issued 9,489 new licenses between January and April.
Start-ups and SMEs have long been the backbone of GCC economies, with SMEs making up around 98 per cent of business in the UAE, contributing approximately 53 per cent of gross domestic product (GFP). Under the country’s Vision 2021 plans, the government is seeking to increase this contribution to 60 per cent by 2021.
Earlier this year, as part of the UAE’s bid to improve ease of doing business, the Federal Authority for Identity and Citizenship started issuing five-year residency visas to entrepreneurs – a move that drew more than 6,000 applications. It’s one of a series of moves that aim to improve opportunities for the wider SME community.
Another is Dubai’s recent package of initiatives by the emirate’s Department of Finance, announced in March. These initiatives include paying the dues of SMEs that supply services and goods to government agencies sooner, reducing the value of primary insurance for SMEs, cutting ‘performance insurance’ rates, calling for 5 per cent of government capital projects to be allocated to SMEs, and seeing projects worth Dhs1bn allocated to public-private partnerships.
Saudi Arabia has also striven to lay more accommodating foundations for entrepreneurs, such as 2018’s launch of an entrepreneur license that allows new companies to benefit from a range of SME services and incentives. At April’s World Economic Forum, the kingdom’s energy minister Khalid Al Falih told delegates that Saudi’s start-up scene is “moving faster than anyone can imagine” and will create hundreds of thousands of jobs in the coming years.
“I predict that by 2030, companies that we don’t know today will be among the top 20 or 30 companies in Saudi Arabia. They will be driven by innovation, they will be driven by young people, they will be driven by women,” he added.
Backed by public sector support, those 69 per cent of people cited by Bayt.com’s survey are surely in as strong a position as ever to realize success should they take the step into the world of entrepreneurship.
Saudi Gazette posted an article dated July 9, 2019, on MENA start-up ecosystem on the rise, explaining that it is all “positive news for the continually growing ecosystem with strong growth through a record number of transactions.”
DUBAI — Total funding across the Middle East and North Africa (MENA)-based start-ups was up 66% from H1 2018, MAGNiTT, the region’s most powerful startup platform, said in its H1 2019 MENA Venture Investment Report, which provides an in-depth analysis of start-up funding and venture capital across the Middle East and North Africa.
The report highlights positive news for the continually growing ecosystem with strong growth through a record number of transactions.
Philip Bahoshy, MAGNiTT’s founder, said “the MENA region is hitting its inflection point. The acceleration of funding we saw in the latter half of 2018 has continued into 2019.”
Bahoshy noted that “there are many signs of an ever maturing ecosystem. As start-ups grow, we have seen more start-ups raising larger tickets, more exits and a continued interest from International investors in the region, especially from Asia.”
He also pointed to “UBER’s acquisition of CAREEM is another example of a large international player acquiring a local company after Amazon’s acquisition of Souq. This will further act as a catalyst to spur on the regions entrepreneurial environment.”
The report noted that H1 2019 saw 238 investments in MENA-based start-ups, amounting to $471 million of total funding. This is an excellent indicator, a 66% increase in investment dollars compared to H1 2018, in which $283 million was invested.
The number of deals remained healthy at a record high, up 28% compared to H1 2018, showing continued appetite in start-ups from the region at all stages of investment.
Noor Sweid, General Partner of Global Ventures, said “the growth in the start-up and tech ecosystem in the region is phenomenal, and yet, we are just at the beginning of a trajectory that will see technology-driven companies grow significantly and incredibly quickly over the coming years. These numbers illustrate the momentum and successes that the underlying companies and founders are achieving, and the growth in the investment ecosystem and opportunities alongside them.”
The UAE remains the most active startup ecosystem with 26% of all deals and 66% of total funding. Saudi Arabia was one of the fastest growing ecosystems, up 2% from H1 2018 recording 26 investments in H1 2019.
The UAE has maintained its dominance with 26% of all transactions made in to UAE-headquartered start-ups in H1 2019, while it also accounted for 66% of total funding.
Khalfan Belhoul, CEO of the Dubai Future Foundation, explains this by highlighting that “With the vision of our leaders, and a strong strategy in place, the UAE has cemented its position as an ideal destination for startups, founders, creative thinkers, and innovators. We have leveraged that vision, through creating dynamic co-working spaces, agile legislation that supports innovation and attractive visa policies for entrepreneurs and business professionals, and we continue our efforts toward positioning Dubai as a global testbed for cutting-edge technologies.”
However, the landscape continues to evolve. Tunisia was the fastest growing ecosystem in H1 2019 – receiving the 5th highest number of deals at 8% of all deals, up 4% from H1 2018. While Saudi Arabia recorded 2% increase in number of deals, up to 11% of all transactions across the MENA region.
FinTech retained its top spot in H1 2019 and accounted for 17% of all deals. Notable investments include the $8 million in Yallacompare, $6 million in Souqalmal and $4 million in Beehive.
E-commerce still remains prevalent accounting for 12% of all deals, followed Delivery & Transport, which was the third most popular industry in terms total deals in H1 2019, accounting for 8%.
The report furthered said 130 institutions invested in MENA-based start-ups in H1 2019, of which 30% were from outside the region.
500 Startups remained the most active venture capital firm, especially at early stage investments, while Flat6Labs was the most active accelerator program.
Moreover, H1 2019 saw the influx trend of foreign investors continue. The entrance of China’s MSA Capital and Germany’s food conglomerate Henkel, among others, highlighted continued international interest in MENA start-ups. In fact, 30% of all entities that invested in MENA-based start-ups were international investors.
Walid Faza, Partner and Chief Operating Officer of MSA Capital, said: “Chinese models are shaping the consumption habits of emerging market tech consumers and MSA’s deep knowledge in both ecosystems positions us to add a lot of value to companies based in MENA.”
EMPG leads the start-up ecosystem with a $100 million fundraise, followed by Yellow Door Energy and Swvl
EMPG receives the highest amount of funding by a single start-up, raising $100 million in February 2019. Yellow Door Energy ($65M) and Swvl ($42 million) complete the top 3.
In total, the top 10 deals in H1 2019 account for 62% of the total investment amount in H1 2019, down 9% from H1 2019. In terms of exits, H1 2019 has seen 15 start-up exits take place across MENA, an increase of 5 compared to H1 2018.
The largest of these was Careem’’ landmark exit to Uber. Magnus Olsson, Co-Founder, Chief Experience Officer noted “Our $3.1 billion deal with Uber was a hugely significant moment, not just for Careem, but also for the Greater Middle East. It was the largest tech deal this part of the world has ever seen and puts our region’s emerging technology ecosystem on the map of both regional and foreign investors.” On the impact the deal will have across the ecosystem, Olsson noted that “Careem views its colleagues as owners of the business and so we introduced an equity scheme that will now see them financially benefit from the transaction. We hope that the deal will act as a catalyst for the next generation of tech startups in our region.”
A new study shows 15m Facebook subscribers in the MENA region; a big increase in Arabic language users. In fact, it was found that not only this platform does help socialise but does also contribute above all to informing on the goings-on in any particular country and/or intercountry affairs.
There are more subscribers to Facebook in the Middle East and North Africa (MENA) than there are copies of newspapers circulated in the region, a new report has said.
The study by Spot On Public Relations said Facebook has more than 15 million users in the region, while the total regional Arabic, English and French newspaper circulation stands at just under 14 million copies.
“Facebook doesn’t write the news, but the new figures show that Facebook’s reach now rivals that of the news press,” said Carrington Malin, managing director of Spot On Public Relations.
“The growth in Arabic language users has been very strong indeed: some 3.5 million Arabic language users began using Facebook during the past year, since the introduction of Arabic support and we can expect millions more Arabic language users to join the platform,” he added.
Five country markets in MENA now account for some 70 percent of Facebook users – Egypt, Morocco, Tunisia, Saudi Arabia and the UAE, the report added.
The study said only 37 percent of Facebook users in the Middle East are female compared with 56 percent in the US and 52 percent in the UK.
Egypt’s 3.5 million Facebook subscribers helped to make North Africa the largest Facebook community in MENA accounting for 7.7 million out of a total of 15 million MENA users.
It added that 33 percent of the UAE’s population uses Facebook and it also now stands as the country’s second most visited website after google.ae, according to websites ranked by Alexa.com.
Some 68 percent of Facebook users in the UAE are over 25 years old, flying in the face of perceptions that social media is a ‘generation Y’ phenomenon.
However, much of Facebook’s growth across the rest of the region has been driven by the under 25s, the report said.
Over 48 percent of Facebook subscribers in Saudi Arabia are under 25 years old, with an equal split between English and Arabic users.
However, about three times the number of Arabic users have joined Facebook in Saudi over the past year, compared with the number of English language users.For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
The World Economic Forum article dated 28 May 2019, could well be applied to most of the countries of the MENA region. Apart from the oil exporting ones, all the others’ informal economy appears to the naked eye as undergoing the same phenomenon but perhaps at a lesser density. In effect, very much like in the neighbouring sub-Saharan regions, the MENA’s informal markets seem to be pushing towards a new kind of business structure. A new kind of company is revolutionising Africa’s gig economy?Aubrey Hruby, Senior advisor to Fortune 500 companies replies.
For more than 30 years, governments and international development organizations have followed the same recipe for formalising the world’s informal economy; enacting new legislation and regulations or abolishing those that get in the way of the process.
By 2035, Africa will contribute more people to the workforce each year than the rest of the world combined. By 2050, the continent will be home to 1.25 billion people of working age. In order to absorb these new entrants, Africa needs to create more than 18 million new jobs each year. Given the urgent need to provide jobs and livelihoods to Africans, it is time to examine the conventional wisdom that informal markets must transition into formal markets. Development finance institutions (DFIs) and private investors in African markets can play a critical role in both advancing Africa’s gig economy and changing the narrative that growth in informal markets is incompatible with sustainable development.
Across African markets, companies are pioneering business models that bridge the formal and informal sectors; in these models, each company is a formal entity but can mobilise large numbers of informal actors in their supply chains or service delivery. While this has been done in dairies in Kenya and at coffee and cocoa outgrowers across the continent and in other sectors for nearly a century, the penetration of mobile phones has enabled a new breed of African companies to monetise their ability to organize and inject trust into fragmented informal markets. However, unlike Uber or Airbnb, which disrupted largely formal sectors, many of Africa’s new ‘gig economy’ firms are writing the rules for whole new industries in local markets.
Perhaps the most high-profile example is Safaricom’s M-PESA. Since its launch in 2007, M-PESA, a mobile payments system developed by Kenya’s largest telecoms operator, has enabled millions of informal sector workers to move money at a lower cost, which has provided a significant boost to the Kenyan and Tanzanian economies. Another, more recent example, is Nigeria’s Cars45, operated by Frontier Car Group. Nigeria’s $12 billion used car industry is largely informal and characterised by distrust, a lack of standardisation and the absence of a structured dealer network. Cars45 facilitates the buying and selling of used cars by pricing and rating their condition transparently and conducting online auctions. Many sectors throughout the continent remain highly informal and would benefit from these types of bridges into formality. These ‘bridge companies’ are going to define the future of employment in African countries.
DFIs are ideally placed to invest in bridge companies in African markets, given their long presence and in-depth engagement with local financing environments. The International Finance Corporation (IFC) and the UK’s CDC Group already invest in technology-enabled start-ups, and others, including OPIC, are adapting their strategies to be able to do so. Many of the continent’s most promising technology-enabled bridge companies are starting to raise funding large enough to attract the attention of DFIs. Frontier Car Group recently raised $89 million, Kenya’s Twiga Foods raised $10 million, and Nigeria’s Kobo365 has raised $6 million. Overcoming a dearth of funding remains one of the highest barriers for African entrepreneurs, and the development impact of investing in those that improve employment is enormous.
The gig economy comes with limitations. Lack of legal rights, limited career progression, stagnant pay and a lack of benefits are just some of the issues that will need to be addressed in an ‘Uberised’ world. These challenges, plus the day-to-day economic uncertainty, make the informal sector far worse in many ways than the formal. Bridge companies – because they are registered, and have a public brand and centralised management – can be pressured into addressing issues around workers’ wellbeing. Studies into the financial behaviours and needs of low-income families by BFA, a consulting firm specialising in financial inclusion policies, found that workers often aspired to ‘gig economy’ jobs but hated casual labour (such as waiting on a corner to be hired for the day) because of the lack of reliability and predictability.
The future of work is changing and the mass job creators of today will not be able to meet the needs of tomorrow’s workforce in the same way. Bridge companies are pioneering new ways of injecting efficiency and higher productivity into traditional informal markets. Investing in this trend is critical to solving Africa’s pressing job creation need.
Traditional bricks and mortar retail is under attack globally. Retailers have struggled to compete with the growing popularity of large-scale competitors such as Amazon and Alibaba. The industry is also in the grip of a revolution powered by digital technology, as people shop online rather than in stores. Millennials comprise the largest internet audience, and will have more buying power than any generation before. But they still want to touch, feel and explore products. Shopping is becoming more of an experiential activity, during which stores compete for consumers’ “share of wallet”.
Middle Eastern retailers and consumer goods companies are even more vulnerable, as the pressure from e-commerce and changes in consumer buying behaviour are compounded by rising costs associated with economic reforms, such as workforce localization, taxes, and increasing fuel and electricity prices. As prices rise, consumer buying power and confidence is becoming subdued.
In fact, our latest survey, conducted in September 2018, reveals that consumers in the Middle East are spending even more cautiously than they have in previous years. They are also more anxious: 80% of survey respondents in Saudi Arabia and 72% in the United Arab Emirates are worried about losing their jobs. In both countries, more than 40% of respondents said they’re cutting down on spending and paying closer attention to prices.
Consequently, traditional retailers have limited levers to operate in response. They have a large fixed base of assets, which they need to rethink as shoppers favour the convenience of purchasing online rather than visiting stores. It is absolutely critical that retailers think about how to operate at maximum efficiency, with a hard focus on cash and working capital, in order to survive to the next stage. They are in a paradoxical moment where their revenues and returns are declining, yet they must invest in technology. It is not always easy to justify this spend with investors. And in thinking beyond the present to the different value propositions and approaches needed to recapture the customer, they must re-skill their employees and recruit new talent.
Customers are now more interested in experiences than products. In considering how to stay with them throughout their buying journey and not just at the end of it, retailers need to make many changes in the way they reach their customer, how they interact with them, what they learn about them, and how they ultimately sell them a product, service or experience. Convenience is also becoming important to consumers as they move their retail activity online. In fact, 50-60% of consumers state that saving time is one of the main reasons why they shop online.
Digital technologies and changing shopping habits are a clear threat to traditional retail business models. But there are positive ways to respond to these trends. To embrace these opportunities, real-estate developers must get closer to consumers and figure out how to meet their evolving wants and needs.
The good news is that by leveraging their assets – physical proximity to consumers, logistics, brand, in-store experience – traditional players still have the right to win. The Middle East has a young population with aspiring lifestyle choices, and with the various macroeconomic transformations taking place, buying power will recover and grow. But retailers must be willing to undertake rapid, radical and lasting transformation when it comes to efficiency, and the ways they embrace technology and offer products.
A transformation can be designed around the following five fundamentals or key success factors.
First of all, the full leadership team – not just the Board and CEO – has to be behind the change required to turn the business around.
Second, this motivation needs to move beyond the boardroom fast and engage the front line, going deep and wide across the organization.
In the Middle East, those two elements are typically in place. It’s the following three that need more focus.
The right structures need to be put in place to ensure that any response is effectively executed and delivered – for example how the business is organized, how governance is implemented, and how objectives and deliverables are executed.
Culture is also important. This is not about how to respond from a technical point of view, but the changes necessary in the mindsets and behaviours of everyone in the organization to make the transformation a success.
The last element is identifying, developing and elevating the best people in your organization, because they are the resource who will take you from point A to point B.
There is no doubt that physical retail is here to stay, and will keep its place alongside the online marketplace. Even e-commerce giants are entering into physical retail, as digital natives invest offline – see Amazon acquiring Wholefoods, and Alibaba’s Hema concept. These new stores have decoupled the notions of “shopping” and ‘“buying”, showing the face of retail is changing. Traditional retailers’ main challenge is to accelerate the pace of transformation, while ensuring they address, in a holistic way, the growth side, cost side, cash side and re-skilling of employees, in order to deliver results.
March 12, 2019, we celebrate the 30th anniversary of the
“World Wide Web”, Tim Berners-Lee’s ground-breaking invention.
In just thirty years, this flagship
application of the Internet has forever changed our lives, our habits, our way
of thinking and seeing the world. Yet, this anniversary leaves a bittersweet
taste in our mouth: the initial decentralized and open version of the Web,
which was meant to allow users to connect with each other, has gradually
evolved to a very different version, centralized in the hands of giants who
capture our data and impose their standards.
We have poured our work, our hearts and a lot
of our lives out on the internet. For better or for worse. Beyond business uses
for Big Tech, our data has become an incredible resource for malicious actors,
who use this windfall to hack, steal and threaten. Citizens, small and large
companies, governments: online predators spare no one. This initial mine of
information and knowledge has provided fertile ground for dangerous abuse: hate
speech, cyber-bullying, manipulation of information or apology for terrorism –
all of them amplified, relayed and disseminated across borders.
control: between Scylla and Charybdis
Faced with these excesses, some countries
have decided to regain control over the Web and the Internet in general: by
filtering information and communications, controlling the flow of data, using
digital instruments for the sake of sovereignty and security. The outcome of
this approach is widespread censorship and surveillance. A major threat to our
values and our vision of society, this project of “cyber-sovereignty” is also
the antithesis of the initial purpose of the Web, which was built in a spirit
of openness and emancipation. Imposing cyber-borders and permanent supervision
would be fatal to the Web.
To avoid such an outcome, many democracies have
favored laissez-faire and minimal intervention, preserving the virtuous
circle of profit and innovation. Negative externalities remain, with
self-regulation as the only barrier. But laissez-faire is no longer the
best option to foster innovation: data is monopolized by giants that have
become systemic, users’ freedom of choice is limited by vertical integration
and lack of interoperability. Ineffective competition threatens our economies’
ability to innovate.
In addition, laissez-faire means being
vulnerable to those who have chosen a more interventionist or hostile stance.
This question is particularly acute today for infrastructures: should we
continue to remain agnostic, open and to choose a solution only based on its
economic competitiveness? Or should we affirm the need to preserve our
technological sovereignty and our security?
a third way
To avoid these pitfalls, France, Europe and
all democratic countries must take control of their digital future. This age of
digital maturity involves both smart digital regulation and enhanced
Holding large actors accountable is a
legitimate and necessary first step: “with great power comes great
Platforms that relay and amplify the audience
of dangerous content must assume a stronger role in information and prevention.
The same goes for e-commerce, when consumers’ health and safety is undermined
by dangerous or counterfeit products, made available to them with one click. We
should apply the same focus on systemic players in the field of competition:
vertical integration should not hinder users’ choice of goods, services or
But for our action to be effective and leave
room for innovation, we must design a “smart regulation”. Of course, our goal
is not to impose on all digital actors an indiscriminate and disproportionate
Rather, “smart regulation” relies on
transparency, auditability and accountability of the largest players, in the
framework of a close dialogue with public authorities. With this is mind,
France has launched a six-month experiment with Facebook on
the subject of hate content, the results of which will contribute to current
and upcoming legislative work on this topic.
In the meantime, in order to maintain our
influence and promote this vision, we will need to strengthen our technological
sovereignty. In Europe, this sovereignty is already undermined by the prevalence
of American and Asian actors. As our economies and societies become
increasingly connected, the question becomes more urgent.
Investments in the most strategic disruptive
technologies, construction of an innovative normative framework for the sharing
of data of general interest: we have leverage to encourage the emergence of
reliable and effective solutions. But we will not be able to avoid protective
measures when the security of our infrastructure is likely to be endangered.
To build this sustainable digital future
together, I invite my G7 counterparts to join me in Paris on May 16th.
On the agenda, three priorities: the fight against online hate, a human-centric
artificial intelligence, and ensuring trust in our digital economy, with the
specific topics of 5G and data sharing.
Our goal? To take responsibility. Gone are
the days when we could afford to wait and see.
Our leverage? If we join our wills and
forces, our values can prevail.
have the responsibility to design a World Wide Web of Trust. It is still within
our reach, but the time has come to act.