Entrepreneurship: an unequal playing field

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The message aspiring business leaders get when they go to conferences and listen to motivational speeches by their role models, urging them to work hard and not give up on their dreams - is often wrong.

A closer look around the room – of the conference hall, coworking space, or the startup office – reveals a generally similar socioeconomic background of entrepreneurs: well-educated, middle or upper class, and male.

“What we’re seeing in all these ecosystems are people, especially in developing countries, who are highly educated and all look the same, whether you go to Berlin, New York or Lebanon. It’s very uniform in the end,” said Victor Mulas, senior innovation officer at the World Bank. Mulas’s work takes him to around 20 countries and he has been following the development of Lebanon’s ecosystem over the past five years.

This pattern isn’t unusual in the early stages of a startup ecosystem, as it’s natural that the most educated would become business leaders.

Making entrepreneurship more inclusive

But as Lebanon’s ecosystem evolves, experts say that it will need to become more inclusive to tackle the high unemployment rates among the country’s less privileged and those most in need of jobs and a supportive network.

“What I’m seeing when I go to Lebanon is a core of ecosystem people in international circles. This doesn’t mean the startup system can’t benefit from lower income people. It just means this is how it develops,” said Mulas, who stresses that even though it’s normal for a relatively new ecosystem to start out with the country’s best educated, it’s important to make an effort to incorporate people of different backgrounds.

“The people founding startups are people who could already get jobs elsewhere because of their connections,” said Abdallah Jabbour, managing director at Lebanon for Entrepreneurs.

“This doesn’t solve the problem. There are a lot of people who can’t get jobs because of lack of connections and education.”

He estimates that more than 80 percent of Lebanon’s startups are based in Beirut and Mount Lebanon, and he and several other leaders in the ecosystem would like to see not only more economic but also geographic diversity.

“As small as Lebanon is, there are no opportunities outside the city,” said Mohamad Najem, cofounder of Social Media Exchange, a training and advocacy organization for local communities, a job that takes him all over Lebanon.

“[Conferences are] very city-centric. It’s all privileged people. Language is also an issue. All of these conferences are in English. It’s not only about language – it’s about breaking the bubble. Go out and try to solve different problems, reach out to different regions... it will create jobs and people might stay in own area,” he said

Admitting there is a problem

To begin addressing the problem, a good start would be to acknowledge there is one, said David Munir Nabti, founder of the Beirut-based accelerator Alt City, who sees upfront costs of starting companies as one of the biggest barriers to entry.

He recalls a discussion he had with colleagues about a decade ago, when he first started working in Lebanon’s startup scene, about ways to engage less privileged entrepreneurs.

“I thought then, and think now, that $6,000 to $7,000 to register an SAL, plus a $20,000 capital requirement, was and still is a huge barrier to entrepreneurship. I remember clearly how others in the meeting were saying how they disagreed, saying ‘anyone who is really passionate about entrepreneurship can find $6,000 and $20,000 for the capital requirement, ask their family, etcetera.’ Clearly a lot of people and a lot of families don't have that money for risky innovative startup ventures.”

In Lebanon, or even the entire region, it might seem premature to think about bridging the socioeconomic divide before there are major success stories, and where getting off the ground can still be challenging for more privileged entrepreneurs. But some people see this as the right time to engage people of all backgrounds.

Some programs are already taking shape, probably the most successful of which is SE Factory, a 90-day bootcamp that trains young software engineers in marketable IT skills. Cofounder Zeina Saab, says that outreach is the most difficult and important aspect of her job. Although the participants aren’t training to be entrepreneurs, what they learn as web developers allows them to get good jobs, exposing them to startup culture and in some cases allowing them to dream big for the first time in their lives.

Weam Hijazi, a recent graduate of the SE factory, who is now doing a computer programming paid internship, says that the experience of learning new job skills in Beirut made her want to contribute to her home city, where she says the tech sector is “zero.”

“In Tyre, you can count the software companies on your fingers,” she said. Over the past several years, she has seen more shops opening in her city, and she doesn’t see why tech companies shouldn’t follow. “Not all businesses need to be centered in Beirut.”

On the other hand, dreaming big only makes sense with the right resources.

Mohamad Nabaa, an entrepreneur based in Beirut, says he sometimes worries that the frequency of tech events in Beirut can give aspiring entrepreneurs “false hope” if they’re not equipped to realize their goals, hence the need for SE Factory and other programs that teach real-world skills.

“What we’re seeing, specifically through bootcamps, is that people with low education can be trained. They train, learn new skills, and can eventually become entrepreneurs,” said Mulas.

“Lower income people can get into [the startup] system. It’s like any new economic development – people with capital assets lead. You need the resources to do this. Less privileged people don’t have access to that. That happened in industry revolution. This transition isn’t seamless.”

Feature image via Pexels.com

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