The Middle East could be a center of global innovation.
Dubai, a new locus of entrepreneurial energy
By Christopher M. Schroeder
Friday, November 26, 2010
The Washington Post
The sold-out gathering had the earmarks of a typical Silicon Valley event: more than 2,400 hungry entrepreneurs and investors, most young adults, tethered to their mobile devices - sharing, debating and connecting. There was the requisite hip music. Speakers who had "been there" were mixing with kids new to the game, dashing out ideas on white boards and rallying each other to new ventures.
That's where "typical" ended.
This month's Celebration of Entrepreneurship 2010 was hosted not in San Francisco or New York but in Dubai. The participants weren't familiar U.S. Internet names but a new generation of entrepreneurs representing every Islamic country in the Middle East. The visionaries behind the gathering weren't famous Western tech journalists or futurists but Pakistan-born Arif Naqvi, founder of the Middle East private equity firm Abraaj Capital, and Lebanese Jordanian entrepreneur Fadi Ghandour, who built the region's largest logistics and transportation services company. Absent were debates on politics, religion and historic obstacles. The only question on everyone's mind was "Why not us?"
Why not, indeed. As Vali Nasr wrote in "Forces of Fortune," his recent, must-read book on the economic rise of the Middle East: "The global Muslim population of a billion-plus is about the same size as both India and China's populations. In 2008 the GDP of the economies of five of the largest countries in and around the Middle East - Egypt, Iran, Pakistan, Saudi Arabia, and Turkey, with a combined population of 420 million - was $3.3 trillion, the same size as that of India, which has three times the population." Is this troubled region ripe to unleash entrepreneurship and innovation of the sort that has driven growth and job creation around the world?
This nascent narrative about the Mideast has largely been missed by the West, and there are many tempting reasons to dismiss it. The gap between the mega-wealthy and desperate poor remains shocking; education and literacy remain profound challenges. Weighing heavily against the talent, transparency, speed and liquidity that have electrified entrepreneurship in the United States and elsewhere are corruption, high unemployment, heavy reliance on government largess, archaic and often indecipherable rules of law, and cultural resistance to investing beyond fixed assets. One need only spend a few days in Amman or Cairo, going through metal detectors in every restaurant, hotel and tourist destination, to feel the political realities.
But tell that to the young Kuwaiti who created mobile game apps for his own amusement . . . and found that more than 1 million people discovered and downloaded his products. Try to discourage the 19-year-old coffee entrepreneur in Yemen who insists that every aspect of his operations (including packaging, which is often outsourced to China) be done in his community.
The list goes on: Computer graphic animators in Damascus are doing things that could make 3-D look antiquated. An Egyptian entrepreneur has developed technology, using air, to blast less water through showers to dramatically reduce consumption in the arid region without sacrificing a quality bathing experience. Oasis500 is one of several tech incubators in Jordan that are planning to back hundreds of start-ups, from companies focusing on new technologies and forms of distribution to those simply "Arabizing" interactive and mobile services that have proved successful in English.
Perhaps my favorite entrepreneur was an 18-year-old woman, one of dozens of women covered from head to toe in the Dubai audience. She had designed a beautiful, even luxurious, battery-powered holder for mobile devices and other items such as note pads to ensure our devices are comfortable, charged and elegant. She has spoken with four manufacturers in China and is wrestling with whether to raise money to buy machinery to sell her first batch, pre-ordered, of a thousand units.
How many of us would have bet two decades ago that China, India and Brazil would be driving engines of global innovation, technology and growth? Would we have guessed that our technology businesses would be developing and outsourcing technologies from the Baltics to South America?
It is not easy in our political environment to seek traces of hope in this troubled region, nor to contemplate a different, albeit concurrent, narrative in complex countries that are rapidly coming to terms with their futures. But something is happening in the region, much like what happened in what was once called the developing world. It is worth watching and supporting. This shift has its own voice, attuned to cultural and religious values that we in the West may not fully understand. It embraces innovation, problem solving, job creation and prosperity - offering new generations a clear path to their future.
Christopher M. Schroeder, a Washington-based Internet entrepreneur and angel investor, is chief executive of HealthCentral.com.
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