Entrepreneurship is increasingly touted as a key ingredient to economic growth, job creation, and expanding opportunity, particularly for youth and women, in the Middle East and North Africa region. As a result, the number of initiatives supporting entrepreneurship in the region has increased exponentially, particularly following the Arab Spring.
Overwhelmingly, however, these programs are focused on assisting individual entrepreneurs, with such things as skills training, mentorship, or access to finance – all extremely important elements to fostering entrepreneurship. Few, if any, however, focus on the enabling environment for entrepreneurship. If an aspiring entrepreneur risks jail time for a failed venture; if starting a business is so cumbersome and expensive as to exclude all but the already well-off; and if the education system fails to instill critical thinking, initiative, and a fundamental understanding of a market economy and of developing a business plan, then no amount of assistance to individual entrepreneurs will result in the establishment of a sustainable, broad-based entrepreneurial sector in the region.
CIPE, Stanford University’s Center for Democracy, Development, and the Rule of Law (CDDRL) and L’Institut Arabe des Chefs d’Entreprises (IACE) in Tunisia have engaged in an initiative to address this gap, focusing on Egypt and Tunisia. The project set out to conduct field research consisting of interviews with entrepreneurs in the two countries, followed by dialogue among entrepreneurs, business associations, and policymakers to cull the key findings from the study and build consensus around and advocate for policy reform.
Before we could conduct the field research, however, we had to be sure we were asking the right questions. To that end, lead researcher Dr. Amr Adly from CDDRL engaged in a comprehensive study of the extant literature on entrepreneurship in the MENA region, to identify the key issues already identified as well as gaps in the collective understanding of the dynamics of entrepreneurship specific to MENA.
CIPE this week published the key findings of that study in an Economic Reform Feature Service article entitled “Understanding the Entrepreneurship Ecosystem in Tunisia and Egypt.” In the paper, Adly looks at the traditionally accepted parameters used in studying entrepreneurship worldwide, but also hones in on some features unique – or at least uniquely relevant – to the MENA region, such as informality, property rights and the rule of law, women entrepreneurs, and the significant overlap between barriers to entrepreneurship in MENA and barriers to small and medium business writ large.
Working closely with CIPE, CDDRL, and IACE, Dr. Adly took the information from the literature review to design and implement the second phase of the project: a field survey of over 100 entrepreneurs in Tunisia, and more than 130 in Egypt, as well as interviews with key policymakers and opinion leaders in the business and financial sector. As of this writing, that research is complete, and a full report on both the literature review and field research will be released at the beginning of 2014.
That report will only be the beginning. The next step will be to engage stakeholders in Tunisia and Egypt in the process of translating the report’s findings in to concrete policy recommendations. This will be a long and difficult process, but a necessary one. If entrepreneurship is going to be the driver of opportunity and prosperity that it is touted to be for the MENA region, there has to be a national conversation about how to get the enabling environment – the ecosystem – right. A conversation that includes the people it’s intended to benefit. For the struggling and aspiring entrepreneurs of the MENA region, that conversation can’t start soon enough.
Gregory Simpson is the CIPE Middle East and North Africa Deputy Regional Director