In July, a report from the International Monetary Fund noted that Saudi Arabia may not be able to create all the private sector jobs it needs for its rapidly growing population, which could lead to higher unemployment. “A large number of young people will enter the labor market in the next decade and beyond, and creating a sufficient number of rewarding jobs for them in the private sector will be a challenge,” the IMF commented. It also called on Saudi Arabia to address high unemployment among youth and educated women, which is higher than in other countries with similar incomes. In recent years, the government has been aggressively pushing the private sector to develop work opportunities for young Saudis. However, part of the solution to the unemployment problem could come from Saudis becoming entrepreneurs and creating their own jobs. In a new book, “Startup Rising: The Entrepreneurial Revolution Remaking the Middle East,” entrepreneur and emerging market investor Christopher Schroeder delivers a sweeping and timely look at the surge of entrepreneurship occurring in the Middle East. He also explores the potential for Western investors and venture capitalists to make profitable moves into the Arab world. Schroeder interviewed over 150 impressive, young entrepreneurs throughout the Middle East for the book - from Dubai to Cairo, Amman, Beirut, Istanbul and Damascus. They all believe that despite the recent political uncertainty, they will eventually control their destinies. And they all know, first-hand, that these are early days of sizable market opportunities in their back yards. These entrepreneurs live in societies with over 350 million active consumers, and are situated to expand into other nearby markets. Many of their nations are approaching 100 percent mobile penetration, and are on the verge of adopting widespread credit card use, ePayments and eCommerce. They are considering how to establish businesses with a focus on opportunities in health, education and infrastructure that would take governments years or decades to address. They are crowd-sharing ideas, learning, expertise and artistic creation on a borderless scale unimagined even three years ago. “I have found [business] hungry youth everywhere - those with no sense of entitlement, not making excuses, fearless in their willingness to take risks. They are looking for infrastructure - investors, business development partners etc. to back them. They are looking for governments to lessen regulations that can make doing business cumbersome and allow them to move more quickly without restraint. They are looking to be taken seriously to scale to their potential. But regardless, they are building in any event. One of my favorite lines in the book is when someone said to me, ‘There is no wasta on the Internet.' It's true,” advised Schroeder. Although most of the major tech players understand the untapped possibilities of the region - LinkedIn and PayPal were the latest to open offices there - the Middle East is still rife with its own potential, and largely absent from this equation are Western venture investors. Only a few have stuck their toes in the waters of Istanbul and Dubai. Part of the reason for this lack of presence is the fear of the unrest affecting the region. While Schroeder agrees that what is happening in Egypt and Syria is terrible and cannot be overlooked or underestimated, he believes that opportunity can only be suppressed for a time. “I cannot predict what will happen in six months. But I can tell you that in five years there will be millions with greater access to technology - with the transparency, connectedness, collaboration and problem solving it offers,” Schroeder remarked. “There is unprecedented opportunity to solve problems bottom up and innovate. It will be a pity if this opportunity is squandered. But regardless, I believe in these young people. They are amazing.” In the book Schroeder tells about the pioneering entrepreneurs who set the stage for today's successes, such as Mohammed al-Ajlouni, who spearheaded a resilient Jordanian news services company, Fadi Ghandour, founder of the reigning Middle Eastern logistics company Aramex, and Samih Toukan, founder of one of the first all Arabic internet portals. Schroeder also explores how the landscape has evolved for today's hottest startups, and how they're navigating the Arab world's unique obstacles and opportunities. Does Schroeder think that local governments could be doing more to help young entrepreneurs? “It is my view that none [of the governments] have been as supportive as they could be, but are beginning to ask some of the right questions,” he explained. “Jordan has been one of the leaders for some time, Dubai as well. This is not like supporting large infrastructure projects - it is lighter, riskier, moves more quickly, but also requires a fraction of the capital and needs.” Schroeder also stated that Arab governments need to do more to attract Foreign Direct Investment and protect those investments so that venture capitalists are encouraged to bring more funds to the region. “Regulations can also be revised to help eCommerce without outside investment,” he added. “Country by country regulations slow things a great deal. As one friend told me, it would be like Amazon.com trying to build quickly if all 50 states in the USA had their own paperwork, bureaucracy and administrative fees, etc.” “Startup Rising” pays special attention to the female-led companies that are driving the quest for gender empowerment, such as Supermama.com, the first Arabic language online resource for new mothers. In his research for the book, Schroeder found that many women in the Middle East are just as interested as men in becoming entrepreneurs. “Some of the best entrepreneurs I've met are women there. Some bristle at being called ‘women entrepreneurs' - as they are entrepreneurs like any other,” he said. “Many concede challenges culturally and in society for sure, but then tell me it makes them better entrepreneurs. Entrepreneurship, after all, is about working through obstacles. But it is a shame when there are challenges presented to half of the world's population anywhere. Why would anyone want to suppress great people and talent wherever they are?” “Startup Rising” (www.startuprisingbook.com) proposes a new narrative for the future of the Middle East, in which a widespread entrepreneurial spirit propels the region into the global marketplace. “Generally in the region there has been some tradition of private equity - later staged, larger investments - and of late, early stage angel investment. The need and opportunity is in what we in the United States call the ‘A' round - $1 to $3 million to a company that has proven itself and is looking to scale. Regional firms are beginning to aim here, and as they do, you'll see global firms coming more quickly as well,” Schroeder predicted. “Success breeds success. The next multi-hundred million dollar exits will have a great effect in gaining attention.”
