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High Growth Entreprises in the MENA Region

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Presented at the July 2012 Meeting of the OECD-MENA Initiative's Working Group on SME Policy, Entrepreneurship and Human Capital Development http://www.oecd.org/mena/investment

Presented at the July 2012 Meeting of the OECD-MENA Initiative's Working Group on SME Policy, Entrepreneurship and Human Capital Development http://www.oecd.org/mena/investment

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  • 1. High Growth Enterprises in the MENA region Nadia Belhaj Hassine nbelhaj@idrc.org.eg
  • 2. Outlines 1- The Economic Reality of the MENA region 2- Objectives of the New Entrepreneurs and High Growth Enterprises in the MENA Region report 3- Steps foreword
  • 3. The Economic Reality of the MENA region With bloated public sector and state owned enterprises, stronger private sector growth is needed to respond to the pressing employment challenges in the MENA countries. What kind of private sector do we need: small entrepreneurial businesses or large corporations? … the question is yet to be explored… But there is a wide consensus on the importance of entrepreneurship as a mechanism for job creation, innovation and lasting development in the region. 3
  • 4. The Economic Reality of the MENA region The nature and structure of entrepreneurial activity, as well as their innovativeness and growth potential are critical to the contribution of entrepreneurship and SMES to the prosperity and social cohesion in MENA. Opportunity driven, export oriented and high growth firms have significant positive effects on jobs generation and employment opportunities , and on sustainable inclusive growth. 4
  • 5. The Economic Reality of the MENA region • Research on entrepreneurship and SMEs is yet to be developed in MENA, but what do we know already: • M/SMEs account for around 95% of all nonagricultural firms, and more than 75% percent of private sector employment • Their contribution to value-added range from 30% in the UAE to 80% in Egypt. 5
  • 6. The Economic Reality of the MENA region • The prevalence of entrepreneurial activity in MENA countries is below what might be expected for countries at their level of development (lower than most emerging and low-income countries). • The prevalence is even lower for formally registered firms. • Middle east and Gulf states have the lowest rates. 6
  • 7. The Economic Reality of the MENA region • New entrepreneurs in MENA tend to be males from younger age groups, among better-educated and upper-third income households. They are generally already working in a full-time or a part-time job. • Opportunity-driven entrepreneurship is higher than in other emerging economies. • Necessity-driven entrepreneurs represent around 27% and tend to be from lower education and lower household income groups. 7
  • 8. The Economic Reality of the MENA region • The majority of ventures are in consumer-oriented sectors. Only few MENA economies register quite important shares of firms in transforming and extractive sectors. Also, new businesses show low international orientation. • Supporting the startup, survival and growth of firms in MENA requires facilitating access to financing, promoting advisory services and new technologies; and improving the business environment. 8
  • 9. The Economic Reality of the MENA region What do we need to know • A job-generating growth strategy relies on promoting the private sector and in particular on enhancing high growth enterprises. • But knowledge on high growth enterprises in MENA is weak… • The New Entrepreneurs and High Growth Enterprises in the MENA Region report aims to fill some of the knowledge gap. 9
  • 10. • It examines in detail a number of high growth enterprises in five MENA countries: Egypt, Jordan, Morocco, Tunisia, and UAE with the focus to: • Compared their characteristics to similar enterprises in developed and other emerging economies and benchmark MENA economies performances. • Explore the obstacles for high potential enterprises to become high growth? Investigate evidence of a new generation of entrepreneurs in MENA • Understand how is the public policy and business environment likely to promote high growth firms? What has been done and what remains to be done. 10
  • 11. Steps Foreword: -Development of larger and richer databases on micro and small enterprises with better representation of high potential and high growth ones. -Deepen understanding on the dynamics of high growth enterprises. -How the changing Economic and Political Landscape of the Arab region is affecting the private sector. -Increase efforts to coordinate actions and research in the fields of SMEs and high performance firms.

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