November 3, 2017//-Although they operate in different spheres, entrepreneurs in sub-Saharan Africa and the Gulf Cooperation Council (GCC) share some common characteristics—and common challenges.
The startup struggle affects all entrepreneurs, but those in the Gulf and Africa have a “lot of commonalities that bind them,” according to Christopher Schroeder, author of Startup Rising. This cohort is defined by a unique set of characteristics that are shaping their management style and the types of business they are interested in.
This is according to a latest report titled- ‘ Next-generation Africa-GCC Business Ties in a Digital Economy’. The report is an Economist Intelligence Unit (EIU) report which was sponsored by Dubai Chamber of Commerce and Industry.
The report explores the perspectives of young entrepreneurs and investors in Africa and the Gulf Cooperation Council (GCC) countries on building business relationships, identifying challenges to overcome and spotting opportunities that await.
It is report is based on extensive desk research and in-depth interviews with entrepreneurs and investors in Africa and the GCC, with a focus on millennials. The interviews were conducted between June and August 2017.
Taking control Millennials in the GCC and Africa find entrepreneurship an increasingly attractive career choice. High unemployment makes founding a business a good option—in fact, almost a necessary one—for ambitious young people in these regions.
In the Gulf, the entrepreneurial ecosystem is starting to mature. Conscious of the need to drive employment and non-oil economic growth, governments have supported a slew of startup accelerators, and solo startup entrepreneurs are starting to take their place alongside established family businesses in the GCC’s corporate landscape. “In my time we saw family businesses that had been running for generations, but not people our age who started businesses,” said Najla Al-Midfa, general manager of a startup incubator, the Sharjah Entrepreneurship Centre (Sheraa), in the UAE.
“Now, there are regional examples students can point to, like Souq.com’s Ronaldo [Mouchawar].” Sheraa mainly mentors young entrepreneurs in the making. This year, it received more than 100 applications for the ten places on its first accelerator programme.
Yasmin Belo-Osagie, the 28-year-old cofounder of Nigerian-based startup accelerator, She Leads Africa, agrees that the spirit of taking control is strong among millennials.
In a study of nine African countries, in only two was the proportion of young people involved in entrepreneurial activity below 25%, according to the Global Entrepreneurship Monitor.
Ms Belo-Osagie estimates that up to 70% of her contemporaries have a business—or “side hustle”—to supplement income. The entrepreneurial streak is also evident in young professionals in these regions, who want to determine how, as well as where, they work.
Millennial professionals tend to eschew hierarchy, favour flexibility and want to be empowered.
“Everyone is now a micro-entrepreneur,” observes Ms Al-Midfa. “[Millennials] want to be given a project they own, rather than constantly reporting on small parts of it.”
Millennial professionals tend to eschew hierarchy, favour flexibility and want to be empowered.
“Everyone is now a microentrepreneur,” observes Ms AlMidfa. All things tech Technology is integral to every endeavour. For young leaders, every business should be tech-enabled. “[They] are thinking about how to make traditional industries more efficient with technology,” says Ms Belo-Osagie. “Using social media to push your products is very standard, for example—or ordering items on WhatsApp.”
Young business leaders are keen to harness the mobile-first trend. The number of unique mobile subscribers in sub-Saharan Africa is now 420 million, according to the GSMA, a mobile operators’ trade body.
By 2020, there will be almost half a billion smartphones in sub-Saharan Africa. In the GCC, 77% of the population are mobile subscribers, with penetration rates topping 90% in Bahrain, Kuwait and the UAE.
The ubiquity of mobile phones and technological advances have enabled entrepreneurs in the GCC and Africa to expand their horizons and embrace a pan-regional strategy.
“Now, as an entrepreneur in Nigeria, I can have customers in Kenya and I can be thinking of selling to people in Morocco,” observes She Leads Africa’s Ms Belo-Osagie.
Other entrepreneurs use technology to smooth internal operations. Vishaal Shah, CEO of Dubai-based Panache International, a food packaging company, uses an online platform to allow its clients to order the packaging they need at the tap of a button.
Orders are sent directly to Panache’s logistics partner, to facilitate faster delivery of the products. Integrating technology to plan resources better, improving supply-chain management and communicating with customers are the approaches that set Mr Shah’s company apart from models adopted by his family’s business.
“The approval process there was much slower to adapt or shift to new technology,” he notes. “Here, we can make our own decisions very fast.” Mr Shah has also broken with tradition for sources of financing.
Finding finance for his expansion into Africa has not been easy: as Mr Shah notes, UAE banks tend to be conservative when it comes to Africa. His firm has opted to raise money on a crowdfunding platform, Beehive, in addition to using its own resources.
To cater to tech-focused millennial investors, VentureSouq, a UAE-based early-stage equity funding platform, actively looks out for technology startups that could be of interest to its 650-strong membership.
Each investor typically commits US$30,000 to a pool of around US$250,000—an investor segment that is largely ignored by many banks and institutional investors. “We invest in early-stage tech deals, because we’re millennials and that’s what is in our purview,” says 33-year-old Tammer Qaddumi, a partner at the firm.
African Eye Report/ Economist Intelligence Unit
