Unleashing MENA Youth's Full Potential Requires Strengthening Entrepreneurship Ecosystems
According to the most recent Arab Barometer survey, in most countries across the Middle East and North Africa region, “a fifth of the population reports considering emigrating.” The number of respondents claiming the desire to emigrate is as high as 48 percent in Jordan and is especially high among the region’s youth, which also comprise most of MENA’s population. According to the survey, almost two-thirds of youth in Tunisia and Jordan note that they are considering emigrating. The reasons “most commonly cited” are economic in nature. And that is not surprising. The MENA region witnessed a dramatic increase in unemployment rates due to the COVID-19 pandemic. The average youth unemployment rate in MENA stands at a staggering 28 percent, and in countries like Tunisia and Jordan it reaches alarming rates of 35 percent and over 40 percent, respectively.
In short, even hope needs to be nurtured to grow.
The data is gloomy and quite telling; youth joblessness, particularly amongst the region’s educated young ones, especially female, is by far one of the most pressing challenges governments in MENA face. And while the most conventional way of completing this paragraph is to raise the hope that the MENA region’s youth embody and represent, I will diverge. Not because I don’t see youth as the hope of MENA’s future, I do. But because the hope narrative cannot withstand the compounding waves of challenge and the frozen or snail-paced change needed to address joblessness. In short, even hope needs to be nurtured to grow.
Over the past ten months, I interviewed more than thirty entrepreneurs, venture capitalists, educators, incubators, and accelerators from across the MENA region on the Wilson Center’s Riyada podcast to better understand how the region’s youth are navigating the various entrepreneurship ecosystems in place. I have been both inspired and somewhat dismayed. I am inspired by the stories of creative minds tackling the problems they face in their locales through innovative ideas and projects, but also by their openness to accept failure, learn from mistakes and grow. My dismay only echoes the frustration that many of our Riyadaguests voiced over the plethora of challenges and barriers they face in their journeys. Challenges that can and should be addressed by governments and the private sector in order to strengthen the entrepreneurship ecosystems in the region. And while it is true that one’s entrepreneurial journey is never a walk in the park, many of these challenges and barriers represent relics of a past era that remains skeptical of business, new ideas and change.
There are variations across the MENA region in terms of the types of challenges and barriers entrepreneurs and other key stakeholders face in the entrepreneurship space, but there are many common threads that perhaps hold that community of practice together “in solidarity.” While our research at the Wilson Center has pointed to access to finance as the leading barrier to entry into the ecosystem, many entrepreneurs featured on Riyada highlighted other key challenges: namely the regulatory and legislative environments in place that either hamper registration of start-ups or that complicate imports, especially for digital start-ups that require importing new technology.
One of the digital entrepreneurs I recently met at the Queen Rania Center for Entrepreneurship (QRCE) in Jordan noted that in “most cases, the government does not understand the new technology we are working with or need to bring in and thus the customs processing ends up becoming more taxing, often delaying the work.” Another entrepreneur from QRCE who owns a drone company noted that there is simply “no drone regulations in Jordan.” He has tried to be part of the solution by recommending what this legislation should look like for this sector to operate and perhaps even thrive.
The government can do a lot more to support small budding businesses by lifting some regulations... especially in the first phase where many start-ups get stuck.
One of the key themes that emerged from the podcast discussions is that very often start-ups are treated similarly to established corporations by the regulators, which cripples the small business environment. Further, many entrepreneurs from Tunisia to Jordan noted that the government can do a lot more to support small budding businesses by lifting some regulations, making registration simpler and giving tax incentives, especially in the first phase where many start-ups get stuck. Indeed, another common issue cited by entrepreneurs is the challenge of scaling up – that is getting to phase two and three. For some businesses, especially those growth stage companies that are ready to export goods and services, accessing new markets is essential to scaling up. This is critical for companies in smaller economies like Lebanon, Jordan, and Tunisia. A few entrepreneurs, however, noted that many of the available trainings and capacity building programs are too focused on pre-seed and seed phases and that those growth-stage companies require more support in moving up to the next phase.
Another shared challenged by many in the entrepreneurship ecosystem discussed at length, especially when guests shared their origin story, is the prevailing social and cultural mindsets in the region that still see entrepreneurship as too risqué, particularly if those at the helm are youth. This mentality is deeply rooted in the traditional view of government as the principal employer and public sector jobs as safe and secure, in contrast to the uncertainty that often accompanies the life of a firm. The drone entrepreneur humorously noted that his father still “prays for me to find a job even though my company employs twenty-five people.” The mindset challenge is especially relevant for women entrepreneurs who very often face pushback or are simply not taken seriously, especially if they are in sectors not conventionally seen as “feminine.” It is no surprise, then, that the rate of female entrepreneurship in the MENA region stands at 4 percent.
Yes they are frustrated, as they should be in the face of challenge, but they are also intent on finding new ways to chip away at the archaic edifices that stand in their way.
The question is, with all these cited challenges and barriers for young entrepreneurs, is there any hope? Are youth still MENA’s best hope? The short answer is yes. Before I say the “but,” though, I owe the reader an explanation as to why they are the hope. MENA’s youth come from diverse backgrounds, socioeconomic classes, and countries with varying resources, and are also energetic, innovative and as far as I have seen persistent in their journeys. Yes they are frustrated, as they should be in the face of challenge, but they are also intent on finding new ways to chip away at the archaic edifices that stand in their way.
Our last question on Riyadainterviews is for our guests to share words of wisdom from their experience in the entrepreneurship ecosystem. In almost every episode, guests talked openly about learning from failures in their entrepreneurial journey, which is monumentally difficult in a cultural context that shames failure. They all exhibited what psychologist Carol Dweck calls a “growth mindset,” which is key to building a knowledge-based economy. In addition to learning from failure, entrepreneurs also flagged the importance of selecting good teams and building communities. It is through these communities that ideas are exchanged, networks are formed, and best practices are cross-pollinated. What is lacking and will be most beneficial is to set up a regional network of entrepreneurs from across the region to building an even stronger and more expansive community. The untapped potential in such a network is unfathomable given the diversity and commonalities amongst youth in MENA.
And now to the “but”. Yes, MENA’s youth are the hope. But they need to be supported. Otherwise, those who consider immigrating will do so at the first opportunity they get, and the region will lose its brightest minds, its hope.
The views expressed in these articles are those of the author and do not reflect an official position of the Wilson Center.
About the Author
Middle East Program
The Wilson Center’s Middle East Program serves as a crucial resource for the policymaking community and beyond, providing analyses and research that helps inform U.S. foreign policymaking, stimulates public debate, and expands knowledge about issues in the wider Middle East and North Africa (MENA) region. Read more
The MENA Workforce Development Initiative
The Middle East and North Africa Workforce Development Initiative (MENA-WDI) aims to assess both current and projected challenges facing the region in developing the workforce and the implications for peace and stability. Read more