The best companies solve the biggest problems – the really hard ones that few people even know about, much less know how to tackle. They do it through ingenuity, perseverance, commitment, and hard work. And they overcome technological, structural, or political obstacles in the process. Big problems are really just big opportunities, and the best companies seize the biggest opportunities.
The Arab world – with its wealth of big opportunities – is ready for some (more) great companies. A range of challenges, each with a deep structural basis, have inhibited growth and social and economic development in the region. The energy, capital access, transportation, and healthcare sectors in every country in the Middle East could stand to be reimagined, if not entirely restructured. And each of them faces not just one, but many difficult problems – but there are many opportunities for those who decide to tackle them. With any luck, we’ll see a few big ideas in 2015 in the following sectors.
Most if not all the countries in the MENA region face significant energy challenges, not least those, including some Gulf states, whose GDPs primarily derive from sales of fossil fuels. In other places, like Egypt for instance, those challenges may result from large public deficits – partly a consequence of maintaining long-term fuel subsidies, a regressive welfare policy that benefits the wealthy.
The energy value chain is a long one. Lots of different processes have to happen, from the point of extraction to when and how energy is sold or consumed. Innovative and influential software companies could be founded to monitor consumption. Or, on the production side, a new company could seek to explore the relatively new frontiers of solar or wave energy. And in the middle of the chain, a technology company could work to build smart grids to allocate electricity on an as-needed basis, thereby minimizing wasted resources.
Access to capital
The MENA region is characterized by a $260 billion funding gap for small businesses. The lack of access to capital is one of the greatest drags on economic growth; it prevents companies from realizing their latent growth potential. And since small businesses account for 60% – 80% of employment and GDP in many countries in the region, that problem is an enormous one.
My company liwwa, Inc. – a peer-to-peer lender focused on small businesses – is dedicated to addressing this issue as are several others. But the matrix of financial goods and intermediation is a complicated one – and new efforts are needed just about everywhere. In 2014 new companies dedicated to payment processing were founded, but that’s only part of the overall landscape. Big challenges remain and solving them will require the work of more than a few players tackling issues that range from credit assessments to capital delivery to security management and identity theft.
There have already been some efforts made at improving transportation services in different countries in the region. Most focus on traffic and ride sharing, but there continues to be a big opportunity on the mass transit side of things (although admittedly, one that will require large amounts of investment capital).
This is a big one. While several countries in MENA do a good job of delivering quality care to some citizens, few successfully cover all who need it. Startups can begin to tackle issues like insurance pricing, information sharing among healthcare providers, monitoring, and digital records. Stay tuned for a roundup of the challenges facing healthcare startups throughout the region.