Arab Entrepreneurship Maturity Index: Insights and Forecasts

We’re thrilled to announce the launch of the second edition of our annual impact report titled ‘Arab Entrepreneurship Maturity Index: Insights and Forecasts’ alongside our Knowledge Partner ‘Roland Berger’.

Last year featured the launch of the first edition of the report, which proved to be a convenient tool for many stakeholders who wanted to gain a deeper understanding of the regional startup ecosystem, in addition to exhibiting the impact that our alumni community has been creating.

In its second edition, the report provides a fresh perspective on how the MIT Enterprise Forum Arab Startup Competition impacted the regional startup scene. The report contextualizes empirical evidence collected from MITEF Pan Arab alumni around the MENA region, including anecdotes, case studies, and predictions. Furthermore, the report pays particular attention to the state of social entrepreneurship in the Arab region, where it is currently being mistaken for a ‘charity’ or an ‘NGO’. The report aims to provide a holistic view of the ease of starting a business in each Arab country.

The report comes at a defining moment for the region's startup scene, particularly as MENA countries are putting greater effort to safeguard their economies in face of the ongoing COVID-19 pandemic in addition to implementing urgent resiliency measures to protect startups and SMEs.

Regional startup competitions such as ours have raised awareness of the role that startups and tech companies play in the digital economy. Furthermore, the report provides a deeper insight into the impact of startups in leveling the playing field with big companies and encouraging policymakers to become more agile and innovative.

Roland Berger has restated its commitment to partnering with MIT Enterprise Forum (MITEF) Pan Arab to examine the rapidly changing startup economy in the MENA region and evaluate MITEF Pan Arab's impact on the domestic economies. For instance, the number of funding transactions has increased in 2019, in spite of a drop in the value of startup funding to $371M from the record-breaking volume in 2018. This number was impacted by the absence of major investments above $1 million in value, which accounted for 48 deals in 2019. The upward momentum in the regional startup ecosystem has prompted renewed involvement from the industry's supporting bodies such as corporations, governments, and global accelerators.

This report revisits the Arab Entrepreneurship Maturity Index (AEMI) which quantifies and measures the state of startup ecosystems in the Arab economies and underlines the strengths and shortcomings of the industry in MENA countries. Specifically, the report studies six dimensions for each Arab country, namely: Human capital, Know-how, Financing, Business setup, Business operations, and Local infrastructure. The metrics indicate, to some extent, the ease of setting up and running a business in addition to understanding the effectiveness of current frameworks previously set to encourage innovation and investments. The report's proprietary index provides insights into how the region is gearing its policies and shaping its functional systems to support the growing domestic startup markets.

To provide even more granular insight, the report also considers the UN’s Sustainable Development Goals (SDGs) as a metric to see how our efforts and each country’s government feed into creating a broader impact than just the economy. In retrospect, the MIT Enterprise Forum Arab Startup Competition has led to the creation of numerous successful businesses around the MENA region, especially for it being among the first competitions designed to encourage businesses and tech-driven innovation.

Its growing community of alumni has cumulatively added 15,500 jobs in the tech-sector and contributed $460 million into the Arab countries’ GDP. This year's edition of the report introduces more nuanced metrics to further gauge the impact of the startups – most notably, the startups that have attracted $27 million in foreign direct investment (FDI) to their local economies. Furthermore, Arab Startup Competition alumni startups are cumulatively valued at $1 billion, with an average valuation of $1.1 million per startup.

Lastly, the report highlights the importance of adopting social entrepreneurship as a driver of impact-driven innovation and investment. By considering 3 regional social enterprises, the report underscores the collaboration between all stakeholders (governments, consumers, and investors) to support social enterprises in their long-term societal and environmental impact. What’s more, the report emphasizes the need to invest in human ingenuity, and to empower researchers and innovators to create ethically conscious businesses in the region.

MIT Enterprise Forum Pan Arab and Roland Berger (Dubai) will be hosting an online webinar on May 14 starting at 6 PM (Dubai time). The discussion will bring Hala Fadel (Chair at MITEF Pan Arab) and Kushal Shah (Partner at Roland Berger’s Dubai office) to discuss and engage the attendees around the findings and implications of the COVID-19 outbreak on the state of investments and startup creation in the MENA.

Register now for the webinar!

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