How investors can support entrepreneurship in the MENA

How investors can support entrepreneurship in the MENA

In an ever changing world, and despite the combination of factors all linked to IT infrastructure complexities and security, how investors can support entrepreneurship in the MENA region and the way, businesses and individuals alike are rushing into, for the time being at least, anything digital in the hope that such a move could assure a better present and somehow a decent future, McKinsey’s Dubai office produced this article written by Ahmad Alkasmi, consultant in McKinsey’s Dubai office, Omar El Hamamsy, senior partner, Luay Khoury, associate partner, and Abdur-Rahim Syed, partner. We republish it with our compliments to the authors and thanks to McKinsey’s Dubai office.

It goes without saying that the situation of each country of the MENA has specifics that are not covered here but it remains that to a certain degree, these are nevertheless not totally far from what is said by the authors.

How investors can support entrepreneurship in the Middle East and North Africa

The potential for entrepreneurship in the region is high, based on digital consumption and a startling increase in investment funding for start-ups.

The Middle East and North Africa (MENA) region is one of the most digitally connected in the world: across countries, an average of 88 percent of the population is online daily, and 94 percent of the population owns a smartphone. Digital consumption is similarly high in some countries; for example, Saudi Arabia ranks seventh globally in social-media engagement, with an average of seven accounts per individual.

Despite this sizable appetite for online content and services, key digital sectors remain nascent, and entrepreneurship potential is yet to be fully tapped. Across MENA, only 8 percent of small and medium enterprises have an online presence—ten times less than in the United States. Only 1.5 percent of MENA’s retail sales are online, which is five times less than in the United States. Research by Digital McKinsey suggests that the Middle East has only realized 8 percent of its overall digital potential, compared with 15 percent in Western Europe and 18 percent in the United States.

However, we believe the region is at the start of a new S-curve: MENA is experiencing a startling growth in both the number of successful start-ups and the amount of investment funding available to them (exhibit). Start-ups are scaling by adapting offerings and business models, from digital music to digital logistics, to serve local needs. Examples of this abound, from Fetchr using GPS technology to power delivery in a region with few addresses to Fawry using a local network of retailers to anchor its payment network and overcome barriers in the fintech space.

Exhibit

Moreover, the number of investors in the region increased by 30 percent from 2015 to 2017, while total funding increased by more than 100 percent in the same period. Corporate-venture-capital funds, in particular, are rapidly emerging in the evolving MENA-investment ecosystem. In 2015 and 2016, 14 new, significant CVC funds entered the MENA market. The number of CVC assets under management grew by more than 2.4 times from 2012 to 2016, reaching 20 percent of total venture-capital AUM in the region.

Through items from targeted, venture-capital–like investment funds to structured incubator and accelerator programs, public institutions are also playing an increasingly key role in the start-up ecosystem. Recent examples include the establishment of Fintech Factory in Egypt, FinTech Hive in the United Arab Emirates, and National Fund for Small and Medium Enterprise Development in Kuwait.

Overall, the ecosystem supporting the growth of MENA’s start-up landscape has been falling into place. However, distinct gaps remain for investors in properly identifying potential in new business models and in scaling chosen start-ups. We recommend investors in the start-up space adopt the following six best practices to unlock the potential of entrepreneurship in the MENA region:

  • ·         Develop robust investment theses leveraging local context.
  • ·         Capture and proactively engineer network effects.
  • ·         Invest at scale.
  • ·         Manage performance with a patient, programmatic growth mind-set.
  • ·         Secure investment independence in governance to win the right talent.
  • ·         Monitor key performance indicators in line with the value-creation model.

Local MENA entrepreneurs have demonstrated they can be innovative and bold to meet changing demand. The appropriate adoption of best practices in venture investing can create significant value for investors, promising new businesses, and the entrepreneurship ecosystem in the region

 

Autonomous Vehicles become Safer and more Efficient

Autonomous Vehicles become Safer and more Efficient

Autonomous vehicles are coming and they have the potential to radically better our lives. But to reap the rewards of this new technology, we first have to adapt the world to its requirements. This means preparing the way for massive engineering projects that will introduce the latest generation of mobile networks into our cities. As future autonomous vehicles become safer and more efficient, they will rely on high-bandwidth mobile networks to wirelessly share and receive data from each other.

Here is an account of  Saber Fallah, Director of Connected Autonomous Vehicles Lab at the University of Surrey on what looks like the ‘not-so-far-future’ in the developed world; the MENA region being only marginally affected with some realisations in the Gulf countries. Hence our proposed featured above picture with our due compliments to the author and publisher.

Driverless cars are forcing cities to become smart

File 20180424 57584 1ahosub.jpg?ixlib=rb 1.1
Driverless cars will transform the transportation industry.
daxis/flickr, CC BY-SA

 

 

Self-driving vehicles currently work by collecting data from an array of sensors, which is then interpreted by various algorithms. These algorithms tell the vehicle where to drive, at what speed and when to stop.

But the data that these sensors collect is inherently limited. The vehicle cannot see any vehicles outside of its field of vision, nor can it be aware of traffic occurring ten miles further down the road. To overcome this, future autonomous vehicles will be constantly accessing and interpreting data collected by thousands of surrounding vehicles, and roadside units (computing devices that provide connectivity support to passing vehicles). Huge swathes of additional information will be provided to the vehicle about road surface, weather, traffic conditions, other vehicle information and intended control actions.

We expect that driverless cars will be commercially available by 2025 and the whole UK transportation system will be fully automated by 2070. When this happens, these vehicles will sometimes be controlled by a traffic management system, which could activate useful manoeuvres such as platooning, when automated vehicles travel very closely together at very high speeds, and intersection management. These connected autonomous vehicles (CAV) will create a completely different transportation network for future generations and one that is safer, faster, more efficient, more environmentally friendly and more productive. As we rapidly approach the point at which CAVs are ready for the streets, we have to make sure that our streets are ready for them.

Transforming infrastructure

With so much data needing to be shared, having a high bandwidth and fast wireless communication technology is essential. The next generation of wireless communication systems, based on the faster 5G technology, can potentially provide the required bandwidth. But to achieve this, we need to begin drastically increasing the number of radio antennas and roadside units in cities.

Even the most recent networks (4G LTE) that exist today simply aren’t up to the task and will have to be upgraded. 5G networks will demand faster and more flexible infrastructure that can adapt to unexpected problems. Countries across the world will also have to invest heavily in new roadside units’ that can help reduce any data delays and minimise the reliance on network data centres, by acting as alternative data sources. At the same time, the security of these networks have to be considered, ensuring the safety and privacy of all communication over them.

5G vital for autonomous vehicles to run.
Carllender/flickr, CC BY

The slowly turning gears of policymakers are currently lagging behind the astronomical progress of connected autonomous vehicles. The Netherlands is currently the country furthest ahead in preparation, thanks mainly to its excellent road infrastructure. Singapore’s decision to allow self-driving cars to be tested on public roads mean that it is quickly also becoming a world leader in this field. Both the United States and Sweden are also beginning to prepare for this future.

Across the world, many governments are coming to realise the necessity of infrastructure change. For example, the UK government recently announced its goal of becoming a global leader in autonomous vehicles, with new development and testing areas to be championed. Indeed, several UK-based projects are attempting to lead the country onwards. UK CITE is equipping 40 miles of urban roads, dual-carriageways and motorways within Coventry and Warwickshire with extremely fast data networks required by CAVs. Another project, E-CAVE, is adapting Ordnance Survey digital data to help the development of CAVs. The data, which is used to create a local map of the environment, enhances the perception of CAVs and allows them drive more safely.

The ConversationEven with the vast technological challenges and regulatory hurdles currently encompassing the deployment of autonomous vehicles, it’s not a question of “if”, but rather “when” they will be prevalent on the roads. Now is the time to have a conversation over developing the correct urban infrastructure for this new age.

 

The Conversation

This article was originally published on The Conversation. Read the original article.

MENA 2018 IT spending to be a three-year high

MENA 2018 IT spending to be a three-year high

 

It is set to hit $155 billion in 2018, according to Gartner, Inc. a US research and advisory company and a member of the S&P 500 in a press release in Dubai today, where the MENA 2018 IT spending will be a three-year high with notably a 3.4% increase spending from 2017 and with its highest anticipated to be in communication services, primarily mobile voice and data by mostly consumers.

 

Gartner Says Middle East and North Africa IT Spending to Reach $155 Billion in 2018

 

Middle East and North Africa (MENA) IT spending is projected to reach $155 billion in 2018, a 3.4 percent increase from 2017, according to the latest forecast by Gartner, Inc. 

Gartner analysts are discussing key IT and business issues that are driving the evolution of digital business during the Gartner Symposium/ITxpo in Dubai from Monday through Wednesday. 

In 2018, the MENA region will exhibit its highest IT spending increase in the last three years. Spending in communication services (mobile voice and data primarily), mostly by consumers, is the segment that will largely contribute to the rise in IT spending in MENA this year (see Table 1).

Software is projected to exhibit the strongest growth in 2018, with a 12.7 percent increase year over year. Software spending has also been growing at a double-digit rate the last two years. The growth has been driven by companies pursuing new functionalities in major back-office systems like supply chain managemententerprise resource planning and customer service.

Table 1. Middle East & North Africa IT Spending Estimates (Billions of U.S. Dollars)

2017 Spending

2017 Growth (%)

2018 Spending

2018 Growth (%)

Devices

26,956

1.4

27,397

1.6

Data Center Systems

4,605

4.0

4,633

0.6

Software

5,500

10.9

6,199

12.7

IT Services

10,128

4.1

10,588

4.5

Communications Services

102,996

-1.4

106,547

3.4

Overall IT

150,185

0.04

155,364

3.4

Source: Gartner (March 2018)

Not all categories of IT spending in MENA will surpass the regional total average in 2018. Cloud spending in the region is among the lowest in the world when measured as a percentage of total IT spending.

“There are insufficient local hyper-scale and large-scale data centers to support cloud systems, which cause local organizations to derive cloud offering from abroad,” said Peter Sondergaard, executive vice president and global head of research at Gartner. “Moreover, latency, legal and local currency makes this option problematic and limits cloud adoption among businesses in MENA.”

The communications services segment — the largest spending segment in MENA — is growing to serve increasing demand for premium mobile phones. Communications services are expanding coverage and increasing data transfer rates while keeping prices low. The rising demand of premium mobile phones by consumers is also set to fuel growth in the devices spending segment in 2018.

“The MENA region witnesses continued focus on technology initiatives and improvements,” said Mr. Sondergaard. “Digital business transformation is creating new industry revenue streams. In 2018, the leading segments driving IT spending growth in the region are banking and securities growing at 3.6 percent, insurance at 2.9 percent and retail at 2.8 percent. IT spending in the banking sector is driven by its move into digital business and the corresponding investments in technologies such as analytics, blockchain and artificial intelligence. For the insurance sector, IT spending is led by investment in software applications.”

Digital Is Here and Is Mainstream

Clearly, digital is here and digital disruptors are emerging in all industries. “We’ve seen this in books, clothing, and now it’s happening in other industries such as traditional grocery markets and consumer durables,” said Mr. Sondergaard. “MENA CIOs must embrace digital transformation. They need to build the momentum to scale and create value by amplifying the power of their people, their organization culture, and their technology platform to deliver breakthrough value.”

Organizations that are not creating new digital business models, or new ways to engage constituents or customers, will begin to lag. “Those vendors that do not move more quickly than their clients will be left behind,” Mr. Sondergaard concluded.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecasts.

Gartner’s quarterly IT spending forecasts offer a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. They help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast is available here.

Gartner Symposium/ITxpo

Additional analysis on IT spending outlook and how to drive digital innovation to the core of your business will be provided during Gartner Symposium/ITxpo 2018, March 5-7 in Dubai, United Arab Emirates, the world’s most important gathering of CIOs and other senior IT executives. Follow news, photos and video coming from Gartner Symposium/ITxpo on Smarter With Gartner, on Twitter using #GartnerSYM and on LinkedIn.

 

Measuring the Information Society Report 2017

Measuring the Information Society Report 2017

The 2017 edition of the Measuring the Information Society Report was launched during the World Telecommunication/ICT Indicators Symposium (WTIS) 2017, in Hammamet, Tunisia. In it, all related Information and Communications Technology (ICT) Development was produced, in which countries were ranked as based on 3 ICT’s criteria that are “Readiness”, “Use”, and “Capabilities”. Over the years, this report has generally been accepted as a reliable snapshot of the current ICT development situation in the world and this year’s confirmed that parallel advances in the Internet of Things, big data analytics, cloud computing and artificial intelligence have concurrently enabled innovations that not only affected but will continue to impact business, government, and society at an ever-increased speed in all domains of human activities with opportunities, challenges but also some implications.  Countries especially those lagging behind such as the above mentioned above will have to create and / or improve conditions to support the next-generation networks and service infrastructures. The first three places are held by Iceland, South Korea and Switzerland in this descending order. A Regional Ranking was also proposed for Africa, the Americas, Asia & Pacific, CIS and Europe. As far as the MENA countries are concerned, it is under the label of the Arab States, that it is to be found. The first place was given to Bahrain at 31st, followed by Qatar at 39th, the United Arab Emirates at 40th and Saudi Arabia at 54th. Lebanon comes at 64th and Oman at 62nd. The North African countries of Tunisia, Morocco and Algeria, ranked from 99th, 100th and 102nd with Egypt at 103rd respectively. An extract of the report SUMMARY OF REPORT FINDINGS is reproduced here and for more details, please click on the links. ICT development index – country ranking  The ITU ICT Development Index 2017 (IDI 2017) featured in the MIS report is a unique benchmark of the level of ICT development in countries across the world. Iceland tops the IDI 2017 rankings. It is followed by two countries and one economy in the Asia and the Pacific region, and six other countries in Europe, which have competitive ICT markets that have experienced high levels of ICT investment and innovation over many years. The IDI has up to now been based on 11 indicators. However, recent developments in ICT markets have led to the review of those indicators. As a result of that review, in 2018 the index will be defined by 14 indicators that should add further insights into the performance of individual countries and the relative performance of countries at different development levels. Measuring ICT development The latest data on ICT development show continued progress in connectivity and use of ICTs. There has been sustained growth in the availability of communications in the past decade, led by growth in mobile cellular telephony and, more recently, in mobile-broadband. Growth in fixed and mobile-broadband infrastructure has stimulated Internet access and use. The number of mobile-broadband subscriptions worldwide now exceeds 50 per 100 population, enabling improved access to the Internet and online services.

MENA Youth take to the Free For All Social Media

MENA Youth take to the Free For All Social Media

Al Monitor IRAN PULSE produced this article that is summarised as the US tech giants Apple and Google have removed Iranian-developed apps from their online stores, sparking a backlash.  Meanwhile most of the MENA youth take to the free for all social media without any second thoughts as to who is offering these media and for which purpose. As put by The Economist : “A NEW commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow. A century ago, the resource in question was oil. Now similar concerns are being raised by the giants that deal in data, the oil of the digital era. These titans—Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft—look unstoppable . . . .” Reviewing some of the comments to this article clearly shows the overall sentiment of the local users bear against the above named data providers. More thoughts? Please comment.

Iranians rail against Apple, Google over pulling of apps

Holly Dagres September 26, 2017

REUTERS/TIMA Iranian youths use their mobile phones as they rest at a park in Tehran, Iran, May 16, 2017.

Imagine trying to hail an Uber on a street corner only for the Uber app on your iPhone to suddenly stop working. That’s what happened to some Iranians when Apple pulled Snapp, a popular local ride-hailing app, from its App Store on Aug. 24. The US technology company purged over a dozen popular Iranian apps, including Alopeyk, an on-demand delivery service; Delion, a food delivery service; Digikala, an online store; Takhfifan, a coupon service; and Zoraq, a travel-booking service.

Now when the name of a popular Iranian app is typed into Apple’s App Store search engine, suggestions for alternative titles pop up, or in some cases, the following message appears: “The item you requested is not currently available in the US store.” Amid the confusion, Iranian iOS app developers received a message from Apple, stating, “Under the US sanctions regulations, the App Store cannot host, distribute, or do business with apps or developers connected to certain US embargoed countries.” The week after Apple’s purge, Google followed suit, removing Iranian apps for Android phones from Google Play.

Tyler Cullis, an associate sanctions attorney with Ferrari & Associates, P.C., told Al-Monitor, “It is unclear why Apple and Google were permitting the hosting of Iranian apps on their respective app stores in the first place, but the decision to remove them appears consistent with US sanctions laws.”

There is indeed the possibility that Apple and Google may have misinterpreted US sanctionslaw. In March 2010, under the Barack Obama administration, the United States granted a license — known as the General License D-1, or Personal Communications GL — authorizing a range of activities, including permitting Iranians to access and download mobile phone apps from US app stores. Deputy Treasury Secretary Neal Wolin said at the time that the license was to ensure that Iranian citizens, and others, could practice their “most basic rights.” Cullis pointed out, however, “[It] does not appear to permit Apple or other US tech companies to host apps created by Iranian users on their app stores and make those apps for sale.”

Apple and Google are not alone in barring Iranians from their services. Iranians also have no access to Adobe, Android Developer, Dropbox and PayPal, among many other online services.

Although Apple has no corporate presence in Iran, millions of Iranians have jailbroken iPhones imported from China, the United Arab Emirates and elsewhere. The devices are sometimes sold for double or triple the original price. There are even shops in Tehran that claim to be legal distributors, and in some cases, emulate the Apple Store experience. Local media reported on Sept. 24 that the iPhone 8 and iPhone 8 Plus arrived in Iran less than 24 hours after their release and were going for double the US price, with shops charging customers a pre-sale price of 130 to 250 million rials ($3,864 to $7,431) for the iPhone X.

According to Telecommunications Minister Mohammad Javad Azari Jahromi, more than a tenth of the 48 million smartphones in Iran are iPhones, making Iran one of the largest markets in the Middle East. Despite Apple’s purge, some Iranians, accustomed to having to resort to circumvention, are bypassing the restrictions by downloading alternative, Iranian-designed iOS app stores, such as Sib App and Nassaab. Meanwhile, others, unaware of the alternative iOS stores, are even going so far as to switch to Android phones, so they can use Iranian-designed Android marketplaces, like Cafe Bazaar, to download Iranian apps. Google’s Android operating system is compatible with an array of mobile companies’ devices, including from Samsung, which opened a Tehran sales center in February.

Iranians quickly took to social media — much of which is accessed through circumvention tools since it is blocked by the Iranian government — to express their frustration, using the hashtag #StopRemovingIranianApps. Many tweeted in English during Apple’s annual September product event using the hashtag #AppleEvent. One developer tweeted, “I wont be able to buy the great iPhone X because as a persian iOS developer I wont have a job soon.” Another Iranian posted on Twitter, “Today @Apple is the first enemy of iranian iOS developers. We are developing software not nuclear weapon.”

Since the apps’ removal, an online petition addressed to Apple CEO Tim Cook and Iranian Foreign Minister Mohammad Javad Zarif has circulated, attracting more than 16,000 signatures as of Sept. 26. On Sept. 18, the Bloomberg Editorial Board defended Iranian entrepreneurs, arguing that the goal of the sanctions was to pressure the Iranian government, but also stating, “Restrictions on apps have instead handed Iran’s government a propaganda gift, allowing it to rail against American technology companies for discriminating against Iranian business people and consumers.”

Cullis told Al-Monitor that while some Iranian officials believe the measures harm the Iranian people, hard-liners bemoan the concern and urge Iranians to develop their own technologies, so reliance on companies like Apple is not necessary.

Payam, an Iranian computer engineer who only gave his first name, expressed his frustration to Al-Monitor, “Google’s Play Store was not allowing Iranians to use it until a couple of years ago since there are alternatives, but the app removal is just sad. It’s like the JCPOA [Joint Comprehensive Plan of Action] never happened.”

It is unclear whether the Donald Trump administration is applying pressure on US technology companies, given the president’s staunch stance against the Iran nuclear deal. During remarks to the UN General Assembly on Sept. 19, Trump called the nuclear deal, which was signed by Iran and the six world powers, “an embarrassment to the United States.” He went on to explain how the Iranian people were suffering under their own government.

If Trump cares for the well-being of the Iranian people, and wants them to “be happy and prosperous once again,” he can start by getting their apps back on Apple and Google’s online stores.

 

Holly Dagres is an Iranian-American analyst and commentator on Middle East affairs. Currently living in Egypt, she is the assistant editor at the Cairo Review of Global Affairs. On Twitter: @hdagres