Entrepreneurship 2010

1. Entrepreneurship 2010 The State of Entrepreneurship in the Arab World. Opportunities and challenges for Entrepreneurs � Fadi Ghandour President and CEO Aramex

3. Entrepreneurship 2010 The Challenge: Turning our deficits into opportunities, by creating the proper environment to empower our young, repatriate our brains, retain, and nurture our talent �

4. Entrepreneurship 2010 Addressing all four deficits is a prerequisite to having a successful entrepreneurship culture in the MENA region � In these deficits lays the opportunity for entrepreneurs in the region

5. Entrepreneurship 2010 Let us state the facts or the opportunities if you want �

6. The Arab world today: The Arab world is very young and getting younger � 38% of the Arab population is under the age of 15 years � Population growth rate is among the highest in the world�

7. Our Talent, Our Future By the end of the 20th century 1 million highly qualified Arab citizens were living in OECD countries 25% of 300,000 degree graduates from Arab Universities emigrated Between 1998 and 2000 more than 15,000 doctors emigrated

8. Our Talent, Our Future UN-AHDR 2002 Survey of the young: 51% of youth surveyed expressed a desire to emigrate. Their biggest concerns were first, job opportunities followed by education

9. Our Talent, Our future Agusto Lopez-Carlos Chief Economist and director of Global Competitiveness Program at the WEF: Labor force in the region will be 146 million people 2010 and 186 Million by 2020 To maintain levels of unemployment at current levels of 15% overall � (Youth 16-24 @ 30%) the MENA region needs to create 80 million jobs in 17 years. Or employment growth of 4% per annum which was never achieved in the 20th century.

10. The Knowledge and Information Revolution The Arab world entered the 21st century with over 60 million illiterates, two thirds of whom are women. Literacy rate among adults dropped from 60% in 1980 to 43% in the mid 1990s

11. The Knowledge and Information Revolution Ten million children between the age 6 and 15 are out of school if current trends continue the number will go up by 40% in 2015. Sample survey of Arab Universities faculty showed that only 38% are satisfied with knowledge acquisition in their countries

12. The Knowledge and Information Revolution Phone lines, 109/1000 people world average 170/1000, and 561/1000 in developed countries PC penetration, 18/1000 people, world average is 78/1000 people Internet penetration is 1.6% of the Arab population Number of TVs is 180/1000 people, world average is 270/1000

13. The Knowledge and Information Revolution Newspapers, 53/1000 people, it is 285/1000 in developed countries Books translated 330 per year, less than one fifth of Greece. In early 1980s an average of one book per million � while in Hungary it was 519 and Spain 920 books

14. The Knowledge and Information Revolution Arab world has 1.1% of world production of published books, but constitutes 5% of the world population. R&D state expenditure as percentage of GNP only 0.4%, 1.2% in Cuba and 2.35% in Israel Scientists and researchers working in R&D are on average 371 per million people global rate is 979 per million people.

15. The Arab economies are relatively closed, government controlled and lack diversification: Non oil exports grew at and annual rate of 1.5% compared to world average of 6% FDI into the region is 0.4% of total world FDI in year 2000, down from 1.2% between 1985-1995 Over $800 Billion Arab money is invested in the OECD Government ownership is at 40% of publicly listed companies

16. The Arab economies are relatively closed, government controlled and lack diversification: Market capitalization of all Arab listed companies was mere $168 Billion in the year 2000 smaller than one major company listed in US market 60% of Arab stock markets are dominated by traditional businesses.( banks, insurance, real estate) compared to 24% of other emerging markets. 15% of Arab listed companies are in manufacturing compared to 36% in the other emerging markets.

17. The Arab economies are relatively closed, government controlled and lack diversification: Intra Arab trade no more than 6-8% of total trade �Intra EU is 60%, intra NAFTA is 55%, intra South East Asia is 23%. In 1981 the Arab world accounted for 10.7% of world exports Today, exports are 3.5% of total world exports and 2.5% of imports. Saudi Arabia and UAE account for 50% of Arab exports.

18. So where do we go from here?

19. Reform or miss the boat The good news: Reform is on everyone�s mind � There are serious efforts in different countries: Jordan, Qatar, UAE, Bahrain, Egypt, even Saudi Arabia Education reform Economic reform etc�

20. Reform or miss the boat What do governments have to do ? Abolishing trade barriers regional and global Accelerate privatization Improve governance in public and private sector institutions Embrace and partner the private sector Supremacy of the rule of law

21. Reform or miss the boat Invest in technology infrastructure and e-readiness � Deepen financial markets and free them to attract companies start ups� Facilitate foreign investment Reform education and match it with the job market.

22. Role of the Private SectorFrom Timid to Proactive What should the private sector do? We should not wait for the government to move Time for action is now, and action is on all fronts� It is our future also � We are all in this together.

23. Role of the Private SectorFrom Timid to Proactive Improve corporate governance/transparency Fight corruption and monopolies Create corporate cultures that nurtures, rewards innovation, and excellence/Entrapreneurship Attract talent, nurture it and empower it Give them ownership allow for stock options

24. Role of the Private SectorFrom Timid to Proactive Invest in research and development Invest in soft ware � Not only hard ware Institutionalize the corporations � go public, bring professionals to manage Invest in corporate education/training

25. Role of the Private SectorFrom Timid to Proactive Invest in technology and embrace it Invest in corporate education/training Interact with education institutions and invest in them � Have a say in what they are teaching our future generations Give back to community

26. The regional deficits are a massive challenge, it is up to us to make them massive opportunities � Thank You