The Growth of Startups in the Gulf

Hardly a day passes without some new major initiative, announcement, or bold proclamation by the Gulf economies of the United Arab Emirates, Kuwait, Oman, Qatar, Bahrain, and Saudi Arabia to promote tech startups in the region, and this is especially true in the United Arab Emirates, which has the world’s largest tech startup ecosystem. Whatever you’re looking for, whether incubators, investment funds, or free zones, they have it.

For the past several years, Gulf countries have been attempting (with limited success) to develop a startup-fueled digital economy, mainly to diversify their economies and reduce their reliance on oil and gas. Second, to provide greater opportunities for private-sector job development for its citizens, who are currently employed nearly entirely in the government sector.

What is it that is impeding the Gulf Startup Revolution?

When we think of the Internet economy, the first image that comes to mind is Silicon Valley, and for a good reason! Due to all of the multi-billion-dollar surpluses, one could be forgiven for thinking that the birth of Silicon Valley was just around the corner or was waiting to happen. Even the names of many of the initiatives that have been undertaken appear to be influenced by Silicon Valley.

However, Asian neighbors like China, India, Korea, and Indonesia appear to have a much more lively and dynamic startup ecosystem than their western counterparts. So, what precisely is preventing the Gulf startup revolution from taking off?

First and foremost, a continual supply of high-quality engineers and entrepreneurs is required to ignite the flame of innovation. Let us begin with the most critical ingredient: “engineering talent.”

Engineers are the backbone of the Digital Revolution, and they are in high demand. Engineers have established some of the most powerful Internet companies in history, but this is not a norm that you must follow at all times. In a past life, Alibaba founder Jack Ma worked as a high school English teacher. However, the fact is that developing globally competitive technology businesses is just not possible without access to top-tier engineering talent.

What Happened to the Local Tech Talent?

There is virtually no engineering expertise available in the Gulf countries on the local level (if any at all). As a result, initiatives to stimulate the migration of high-quality young engineering talent from India, China, and Southeast Asia are urgently required.

Developing local talent in parallel with international potential is undoubtedly a desirable development. Still, it will take a significant amount of time given the existing views toward engineering and science education.

To ignite the flame of innovation, you must have a consistent supply of high-quality engineers and entrepreneurs.

As a result, focusing on high-quality overseas personnel is the best course of action in the short to medium term. And figure out a strategy to keep them around. A persistent sense of instability brought on by short-term visas and impediments to job-hopping would most certainly deter highly skilled workers from pursuing a lucrative career path in the future. We will discuss more on the worldwide competition for tech talent later.

Technological Entrepreneurship

Let’s talk about the second essential ingredient: “technological entrepreneurship.” It is critical to have a culture that encourages the entrepreneurial spirit to succeed in the digital economy. The region has long been known as a trading center, but the world of technology entrepreneurship is a whole different animal. A trading-business strategy to entrepreneurship in the technology sector would never be successful.

Understanding the subtleties of starting a venture from the ground up and committing the time and resources necessary to see it through to maturity requires an entrepreneurial mindset and skill set unique to the nature of tech-powered digital ventures and their founders.

For six years, Facebook did not generate a single penny in revenue. It focused its efforts on building a devoted user base before creating a strategy for monetization. It now generates a billion dollars in revenue per year. The same may be said for Twitter as well. Instagram, in reality, was sold for a billion dollars with no revenue to show for it at the time of the transaction.

Tech entrepreneurs must comprehend the importance of priorities at various stages of a venture’s development and the support ecosystem required for it to succeed!

Venture Capital

Venture Capital is a type of financing that is used to fund new ventures. It is true that there is a lot of money floating around in the region, but there is essentially none available for seed-stage ventures. If you’re a young entrepreneur, your best chances of generating funds come from “angel investors,” but that’s more a matter of chance, and “Wasta,” as they say in this part of the world, is surely not by design!

The need of the hour is for sophisticated investors who comprehend the new-age economy, not wealthy folks with a trading mindset and, worse, a trading attitude, as has been the case in the past.

At various stages of their development, young entrepreneurs require “adult supervision” and advice from more experienced individuals. Venture capitalists (VCs) are still not expressing much interest in the region. That will only alter if and when they are exposed to the proper incubation circumstances.

Outdated Laws

The legal system has got to be the hardest to deal with out of all of them. With a startup in the Gulf, it’s not exactly possible to start in your garage and try to bootstrap your way to financial success.

It is not possible for entrepreneurs to rent exorbitantly expensive office space or to have the luxury of $50,000 in paid-up capital to form a company. To easily incorporate, they require the brightest and most intelligent minds to ensure that an excessive number of rules does not burden them.

Startups thrive in an environment of constant change. Non-compete agreements make it difficult for talented professionals to go from one company to another. Startups should be able to terminate and employ as they see fit and at their discretion. That is what distinguishes them as dynamic businesses.

Regulatory frameworks for digital commerce are still in their infancy, and any regulatory framework should be designed to keep the Internet economy out of its grasp as much as possible. Patent laws, without a doubt, require further investigation. Tax-free schemes must be investigated, and they must be on par with and far better than worldwide norms to make up for lost time.

For example, Internet corporations, website hosts, and Internet service providers (ISPs) are protected from legal liability arising from content submitted by users under the laws of the United States. It isn’t easy to envision the digital revolution, mainly social media networks such as Facebook and Twitter, occurring without these regulations.

Research-Focused Universities

Some of the brightest minds are blossoming in the region’s universities, many of which are international in scope and have world-class faculty members from the West and other parts of the world. One such Tech Entrepreneurship Program offered by Carnegie Mellon University was when I discovered my true passion.

At various stages of their development, young entrepreneurs require “adult supervision” and advice from more experienced individuals. This is one area that is beginning to show signs of improvement, but much more work has to be done in this area. International universities are welcome to establish themselves in the United States, but they must have a strong research concentration. Silicon Valley owes a lot to Berkley and Stanford for their contributions to technology development and the formation of an army of technologists.

The elementary education system in the Gulf region falls short of expectations. Thus, fewer locals are enrolled or selected for engineering and technology programs as a result.

Workplace Culture: The Battle for Global Talent

When it comes to hiring assembly line workers who clock in and out of work daily, the attitude of the industrial age will not make it in the Internet-based economy.

Globalization has resulted in a plethora of options for bright young men and women willing to work hard. They must be motivated by a work environment that encourages and supports their inventiveness and creativity!

Jobs in the government with generous salaries and a false sense of security generate a bubble that will collapse at some point! Developing entrepreneurial brains blazing with the drive to challenge the status quo can never be possible in a society that celebrates mediocrity and discourages out-of-the-box thinking. We need to recognize and celebrate achievement.

Pay raises and bonuses are all well and good, but if you want to cultivate long-term, committed team assets, you must reward these bright individuals with a piece of the pie. They must have a strong sense of belonging to perform at their highest level of performance. Leadership should understand this and devise strategies to make them active participants.

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There is strong evidence suggesting that accelerators, incubators, and government-led projects play an essential role in developing new businesses and their expansion. In addition, with the return of in-person events such as GITEX Global and the Dubai Expo 2020, the development and investment future of the startup ecosystem appears to be fairly promising in the near future.

Ricardo is a freelance writer specialized in politics. He is with from the beginning and helps it grow. Email: richardorland4[at]