12

years
MIT Enterprise Forum
Arab Startup Competition
Unraveling the Entrepreneurship
Maturity Index
FOREWORD

Hala Fadel
Chair, MIT Enterprise Forum Pan Arab

More than 14,000 jobs created. 51% of competition

participants with leading roles are women. 415 million
dollars contribution to the Arab World’s GDP.

That is the miracle of the MIT Enterprise Forum Arab Startup

Competition over the past 12 years. From a humble
beginning back in 2005, it has grown into one of the most
influential startup support programs in the Region.

For this report, we’ve carefully surveyed our semifinalist

teams across 12 editions and with the support of our
Knowledge Partner Roland Berger, we were able to proudly
present our impact on job creation and the Arab
macroeconomy.

Meanwhile, the landscape of entrepreneurship in the region

has been filled up by remarkable initiatives that helped some
of our winners move from little startups to global success
stories. Our initiative remains an incredible visibility platform
for the talented innovators from our part of the world. It is
also more and more the only life-line to learning and
networking for thousands of entrepreneurs in the Arab region
who live far from the major entrepreneurship hubs.

The MIT Enterprise Forum Arab Startup Competition receives

thousands of applications every year from at least 30,000
Arab entrepreneurs and only caters to about 100 startups
every year, we could do much more with your support. It is
quite clear how our flagship competition influenced our
teams with their ability to raise funds and receive additional
support.

More than ever, we are on the lookout for like-minded

partners who can support, fund and grow this initiative to
reach thousands of men and women in the region. We are
therefore grateful to all of our partners this year, and in
particular our lifelong supporter Community Jameel.

1
Table of
content
Executive Summary.................................................................................................................................................................. 4

THE STATE OF THE ARAB KNOWLEDGE ECONOMY....................................................................................................... 6

Introducing the Arab Maturity Index..................................................................................................................................... 8
Support from local governments......................................................................................................................................... 12
Support from the private sector........................................................................................................................................... 13

Success story | Myki: Homegrown global ambitions ..................................................................................................... 15

(ASC Ideas Track Winner, 7th Edition, 2014)

12 YEARS OF IMPACT: ASC AND THE REGIONAL ECOSYSTEM .............................................................................. 16

Women at the forefront ......................................................................................................................................................... 17
Emerging hubs and industry trends................................................................................................................................... 18
ASC as perceived by its alumni............................................................................................................................................ 19
ASC alumni created 14,000 jobs.......................................................................................................................................... 21
ASC reviving the Arab economy........................................................................................................................................... 22
Growing the cycle of impact................................................................................................................................................. 23

Success story | Kiliim: Doing well by doing good............................................................................................................. 25

(ASC Social Entrepreneurship Track Winner, 10th Edition, 2017)

LEADING WITH BIGGER STEPS........................................................................................................................................... 26

ACKNOWLEDGEMENT............................................................................................................................................................ 27
APPENDIX................................................................................................................................................................................. 28

3
 MIT Enterprise Forum

years
Arab Startup Competition
Unraveling the Entrepreneurship
Maturity Index

Executive summary
The MIT Enterprise Forum (MITEF) Pan Arab 12th Anniversary
Impact Report comes at a critical juncture in the Arab World.
With an entrepreneurial DNA that runs deep, Roland Berger was
selected to partner with MITEF Pan Arab to deliver this report, 12
Years of the MIT Enterprise Forum Arab Startup Competition:
Unraveling the Entrepreneurship Maturity Index, leveraging the
power of getting things done with passion and pragmatism –
essential ingredients for successful entrepreneurship.

Over the past decade, entrepreneurship in the Arab region has

progressively become the bedrock of many economies. Startups
in MENA are shaping a new economic landscape across the
region based on a culmination of several factors including
technology, innovation and demand for a new way of business
engagement among the youth. Ideas and businesses coming out
of the MENA region, combined with the renewed interest and
investment in its startup ecosystem, are positioning the Arab
world as a force to be reckoned with.

4
MIT Enterprise Forum Arab Startup Competition (ASC) has played an
instrumental role in empowering startups and fostering an ecosystem of
entrepreneurship and innovation. For many Arab entrepreneurs, MITEF
Arab Startup Competition has been the fine line between surviving and
thriving, as it provides top-tier training, mentorship, media exposure,
networking opportunities and equity-free prize funding. Through its
continuous efforts over the years, MITEF Arab Startup Competition itself
has turned into a brand for cutting-edge innovation. The competition has
become a platform for collaborative innovation across borders of the Arab
region to solve global problems and create impact.

The objective of the MIT Pan Arab report is to assess the impact of ASC
on startups and their respective entrepreneurial ecosystems and broader
economies. This report provides an in-depth view of the role that MITEF
Pan Arab has played in shaping the outcomes of entrepreneurs, startups
and ecosystems. This report is a celebratory acknowledgment of the
progress made thus far, and in equal part, an honest evaluation of areas
for improvement that stand between its current performance and
potential.

This report introduces the Arab Entrepreneurship Maturity Index (AEMI),

a blended index that evaluates the entrepreneurship ecosystems of each
Arab country, focusing on critical pillars such as the ecosystem's overall
attractiveness, ease of setting up and operating businesses, availability of
human capital, etc. Through this index, the report provides comparative
insights on how each entrepreneurial ecosystem has fared and the
underlying determinants of its successes and challenges.

In addition, this report takes stock of the social and economic impact that
MITEF Arab Startup Competition has had in terms of number of
high-skilled jobs created, investments attracted, contributions to local
economies, alongside various other metrics. Through impact evaluations
such as this, MITEF Pan Arab is able to measure itself against a defined
yardstick and continues to effectively build on the value that it has
delivered and helped unleash among startups. The report acknowledges
ARA Research & Consultancy for its support in surveying and collecting
the results of MITEF Pan Arab startup graduates.

In the midst of challenging geopolitical economics in the Arab World, the

competition has attracted the attention of diverse partners, entrepreneurs
and various stakeholders from the regional startup ecosystem.
MITEF Arab Startup Competition is proud of its bold ambitions and
position at the forefront of shared prosperity and development in the Arab
World. MITEF Pan Arab has oiled the wheels of entrepreneurship in the
region and is witnessing the results of its hard work in motion. With the
12th edition of the Arab Startup Competition, MITEF Pan Arab continues to
renew its commitment to shaping and supporting the building blocks of
entrepreneurship in the Arab World.

5
State of the Arab
knowledge economy

The entrepreneurial scene in the Middle

East and North Africa is experiencing
staggering growth in a wide spectrum of
industries and across the various Arab
regions. Startups are increasingly
becoming the pulse of the Middle East's
economies. The region is seeing a wave
of entrepreneurs and investors that are
more mature and experienced after years
of ecosystem development and integral
lessons learned.

As can be expected, the rise in the

number of startups is coupled with a hike
in startup funding that has reached USD
893 million in 2018, according to the
MAGNiTT MENA Venture Investment
Report. Just five years ago, 408 startups
were recorded in MENA, whereas the
number had nearly tripled to 1,324
startups in 2017.

The year has also logged a

record-breaking 366 deals across MENA,
with an average ticket size of USD 1.9
million, excluding the USD 200 million
Careem investment last October.

6
The region is in the middle of a startup boom with strong steady growth
in investments since 2014. The hike in 2016 is explained by the giant
investments pumped into two companies: USD 350 million into the
ride-hailing app Careem and USD 275 million into the online retailer
Souq.com – both accounting for nearly 70% of the total that year.
Excluding the two UAE-based unicorns, the region has experienced 90%
compound annual growth in the past five years, positioning the Arab
world as a hot region for entrepreneurship.

The ecosystem in 2018 witnessed new investment dynamics, with the

fintech industry leading with 18% of total deals, followed by e-commerce
with 11%. Moreover, nearly a third of the funding came from investors
from outside the region – most notable was the Dubai-based Property
Finder closing a USD 120 million investment round led by General Atlantic
in November of last year. Nevertheless, the UAE was not the only lucrative
Arab country for startups. While it maintained its leading position with
30% of closed deals, Egypt recorded the fastest growing ecosystem in
MENA, logging 22% of total deals in 2018.

The region is slated to continue growing at a strong pace. This potential

is attributed to several drivers, particularly the growth in the size of the
young and educated population in the Arab world. This represents a
true opportunity for the development of the ecosystem, in terms of both
the diversity and the quality of startups. The region's drive for
technology is another factor that will help reach untapped territory for
new businesses. The newly established initiative for digital inclusion,
the Arab Digital Economy Strategy, is an example of the region's
attempts to foster this resource and create a strong foundation for
technology startups to boom. This, coupled with a projected growth in
gross domestic product, paints a bright picture for the future of Arab
entrepreneurship.

The observed advancement has not been uniform across the Arab
countries. It is unsurprising that the UAE, which scores the highest on
Ease of Doing Business, leads the way in both number of startups and
funding. Certain nations, such as Egypt, Saudi Arabia, Lebanon and
Jordan, are not far off. However, other Arab countries fall behind in
terms of entrepreneurship maturity. This is largely driven by the
availability of investors and supporting institutions as well as increased
attention from regulators and policymakers in terms of developing the
ecosystem. As such, entrepreneurs across the region are faced with
several challenges that hinder the creation of a platform to scale up
their startups and unlock their full economic benefit.

7
Introducing the Arab Entrepreneurship
Maturity Index
To identify where the main pain points are in the Arab countries' economies, this report follows
a quantitative approach to create the AEMI – the Arab Entrepreneurship Maturity Index.

The AEMI leverages publicly available data (World Bank and World Economic Forum) on the
Arab countries to create a blended index that describes the entrepreneurship ecosystem.
The indices are clustered across six dimensions as seen in the figure below.

DIMENSION DESCRIPTION DIMENSION METRICS (SELECTION)

Quality and extension of basic Road connectivity index Electric power

infrastructure needs of a business Airport connectivity transmission
that ultimately impact their costs & distribution
and movement of people, goods Efficiency of seaport
services Reliability of water
Local Infrastructure and information. supply

Level of skills of the workforce, Years of schooling Ease of hiring foreign

including the quality of education, labor
Digital skills
as well as flexibility and talent
Hiring and firing practices Workers’ rights
management within the labor
Human Capital market. Extent of staff training

Distribution of information and Mobile-broadband Quality of research

communication tech, state of R&D, subscriptions institutions
and level of innovation including Fiber Internet subscriptions R&D expenditure
fostering collaboration, connectivity
and creativity. State of cluster development Patent applications
Know-how

Availability of credit and financial Financing of SMEs Soundness of banks

products that can nurture Venture capital availability Non-performing loans
productivity of businesses, and
Domestic credit to private Insurance premium
ease of payments systems.
sector
Financing

Ease of starting a business, Cost, time and procedures Companies embracing

including time and cost to obtain to start a business disruptive ideas
required permits, as well as the
market’s ability to enable an agile Attitude toward Electricity procurement
and dynamic private sector. entrepreneurial risk
Business set-up

Time and cost to import / Strength of legal rights

Factors necessary to operate and export Ease of tax payment
grow a business, including ease of Extent of ownership Enforcing contracts
trade, contract enforcement and and control
labor legislation. Extent of corporate
Business operations transparency

Figure 1. Selected metrics of the 6 dimensions of the Arab Entrepreneurship Maturity Index.
Source: World Bank, World Economic Forum

8
Together, the dimensions provide a holistic view of the ecosystem, highlighting the overall
attractiveness and ease of setting up and operating businesses across the MENA region. That
said, this framework does not address geopolitical or security risks that some countries may
face. The AEMI framework excludes particular Arab countries (such as Palestine, Syria and
Iraq) due to lack of data in the reports used to construct the index. A detailed description of the
methodology is presented in the appendix.

The results derived from the AEMI framework shed some light on key strengths and
weaknesses of startups in each of the Arab nations. The figure below shows that countries
from the Gulf Cooperation Council (GCC) are top performers, with the UAE attaining an
astounding 3.8 overall score (out of 5.0). The UAE's leading position is driven by its ease of
setting up business and the robust local infrastructure. Nonetheless, the UAE leads in every
dimension in the AEMI except for human capital, where it ranks second after Bahrain.

LOCAL BUSINESS
HUMAN CAPITAL KNOW-HOW FINANCING BUSINESS SET-UP
INFRASTRUCTURE OPERATIONS

3.1 2.5 1.9 2.4 3.0 2.0

3.9 3.4 2.6 3.5 3.8 3.2

2.4 2.5 2.0 2.6 3.4 2.5

3.3 3.0 2.3 3.5 3.5 2.6

3.5 2.8 2.2 3.2 3.4 2.8

3.0 3.3 2.4 3.4 3.1 2.4

1.8 1.9 1.3 2.0 3.1 2.4

3.6 2.4 2.0 3.3 3.8 3.2

4.1 3.2 2.2 3.2 3.8 2.9

4.0 2.9 3.3 3.5 3.9 2.8

3.8 3.2 2.7 3.3 3.7 3.2

3.1 2.7 1.9 2.8 3.7 2.9

4.3 3.3 3.4 3.6 4.4 3.7

1.7 1.8 1.0 1.9 2.8 1.6

Ø 3.2 Ø 2.8 Ø 2.2 Ø 3.0 Ø 3.5 Ø 2.7

Figure 2. Selected results of the Arab Entrepreneurship Maturity Index 2018.

Source: World Bank, World Economic Forum

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The UAE's pioneer positioning in the startup ecosystem
has also resulted in the emergence of a vibrant venture
capital investment scene. In addition to its ability to attract
capital, it is making headway as a significant incubator of
technology companies.

The UAE has succeeded in transforming physical spaces into dynamic

environments for creativity, focus and connection.

Area 2071, at the Emirates Towers in Dubai, for example, has become an experimental
nucleus for innovative problem-solving. As part of the UAE Centennial Vision for 2071, the
space serves as an incubator for future design and manufacturing partners and as a venue
for companies, services and smart laboratories worldwide.

Underlining Dubai as an entrepreneurship power horse, the city is

perpetually introducing initiatives targeted at growing the
ecosystem.The Dubai Startup Hub, for instance, has introduced the
Market Access Project that secures corporate opportunities focused
on technology solutions.
It has already landed partnerships with FlyDubai, Emirates NBD,
Aswaaq and many more. This has led to increases in valuation of
startups and funneled more funding from investors.
Essa Al Zaabi, Senior Vice-President, Institutional Support Sector of Dubai Chamber.

10
Another observation from the AEMI is the highly competitive score attained by Qatar and
Bahrain despite both having relatively nascent startup ecosystems.

This is driven by the small population base of the two countries and the preference of local
startups to set up in the nearby hub Dubai. Nevertheless, key success factors in the GCC
countries that can enhance a growing entrepreneurship ecosystem include state-of-the-art
local infrastructure and business set-up.

On the other hand, Egypt records an overall score of 2.6 primarily due to weak infrastructure
coupled with an inadequate level of know-how.

Egypt, with a population close to 100 million, is currently a hot spot for
startups with an ever-increasing number of investments and entities
supporting the creation of a developed ecosystem, as a testbed market
for several industries, mainly delivery, freight, and logistics.

Nonetheless, Jordan leads the Levant countries with an overall score of 3.0. The key factor
contributing to the country's advanced positioning is its excellent performance in SME
financing and availability of venture capitalists, where it ranks 29th and 32nd worldwide,
respectively.

This is heavily driven by the renowned Jordanian VC firm Silicon Badia, which focuses on
seed/startup and early stage investing. Other VCs include Dash Ventures and Beyond
Capital. Jordan closely follows leader UAE in overall financing potential. Morocco leads the
North African countries in entrepreneurship maturity, scoring 3.0 similar to Jordan.

Key drivers include its ease of starting a business, where it ranks 34th worldwide, second
only to the UAE within MENA. According to the World Bank, it takes a Moroccan
entrepreneur nine days on average to set up a business, involving four procedures in total.
Moreover, the cost to start a business has fallen in the North African country from
8% of income per capita in 2018 to 3.7% in 2019.

3.8 3.0

3.4 2.9

3.4 2.9

3.3 2.6

3.2 2.5

3.0 2.1

3.0 1.8

Ø 2.9
Figure 3. Summary of the Arab Entrepreneurship Maturity Index Results 2018.
Source: World Bank, World Economic Forum

As the AEMI results are anchored to global scores, the report identifies key challenges in
the know-how and business operations segments, where the Arab World records modest
scores of 2.2 and 2.7 in each dimension, respectively. This is a call to action for the region
to offer increasing support to the ecosystem with the likes of incubators and accelerators.
This will stimulate businesses and sustainably reinforce their foundation through
mentorship and training.

11
 If startup synergies around MENA took place,
Arabs would form a global powerhouse.
For example, Lebanon & Jordan are a great
place to start off. Saudi Arabia is excellent as
a consumer market, and Egypt to scale the
product and drive demand.
Issa Aghabi, Investment Officer at the International
Finance Corporation (IFC).

Support from local governments

Arab governments have recently started fueling the ecosystem through a variety of
initiatives that push toward further innovation, which help enhance the quality and growth of
startups in the region. Examples include the first Arab sandbox in Abu Dhabi hosting
international startups, the newly established SME Authority in Saudi Arabia, and the launch
of the Innovative Startups Fund in Egypt. These initiatives and many more are aimed at
catalyzing the startup industry in the region and fueling growth in its various industries.

Moreover, some Arab governments are pushing entrepreneurial boundaries through deeper
collaborations with startups as a tool for overall development. A prime example is the
recent announcement by the Roads and Transport Authority (RTA) in Dubai that it is
establishing a joint venture with the tech e-hailer Careem. The partnership aims to improve
the end-to-end taxi experience by offering a top-notch customer interface and an enhanced
in-ride experience. Careem and many other startups have successfully helped regulators
understand the profound impact that startups can have on the market.

UAE QATAR BAHRAIN KSA OMAN

JORDAN MOROCCO KUWAIT LEBANON EGYPT

Figure 4. Key supporting entities in some Arab markets.

12
Support from the private sector
In addition to government initiatives, the private sector contributes to the ecosystem
through the funding and the sharing of know-how and other means of support, both locally
and regionally. Firstly, the region has witnessed a boom in startup hubs powered by
incubators, accelerators and venture capitalists.

Key agents from the private sector are deploying long-term programs for young aspiring
entrepreneurs wishing to build or join startups. Supplementing the local initiatives, other
programs are now in place across the entire MENA region, the most prominent example
being the MIT Enterprise Forum Pan Arab. MITEF Pan Arab has been providing a platform
for early and late stage startups since their inception, predominantly through its flagship
program, the Arab Startup Competition.

MITEF Arab Startup Competition is one of the leading and longest-running startup
competitions targeting 21 Arab countries, with almost 50,000 applications received since
its inaugural edition in 2007. ASC competitively pits established technology entrepreneurs
and idea owners against each other in a way that encourages collaborative innovation,
networking, high-impact mentorship and training. Initially starting with one track only, the
competition evolved through 11 editions into having three tracks: Ideas Track, Startups
Track and Social Entrepreneurship Track.

With the aim of empowering and supporting Arab entrepreneurs who are utilizing
technology, ASC has gained the trust and support of partners such as Community Jameel,
Zain Group, the World Bank, Tamkeen, Bahrain Economic Development Board - EDB, Google
for Entrepreneurs, the Skoll Foundation, Huawei, Techwadi and more, who believe in the
competition's mission in emerging markets.

Each year, nine ASC winners are awarded a sum of USD 160,000 in the form of an
equity-free fund, among other benefits – including coaching, top-tier training, mentorship,
networking and media exposure. The awards ceremony and conference have taken place in
various parts of the Arab world, including Manama, Amman, Dubai, Jeddah, Muscat, and for
the 12th edition, the event will take place in Beirut.

MITEF Arab Startup Competition has so far trained 2,300+ Arab entrepreneurs, who have
taken the initiative to "lead with bigger steps" and inspire others to do so. Among the most
prominent ASC alumni is the Arab unicorn souq.com that was acquired by Amazon in 2017
for a price of $650 million.

This report assesses the impact of the competition's graduate startups, touching upon job
creation and economic and social contribution.

13
SUCCESS
STORY

14
Myki: Homegrown global ambitions
ASC IDEAS TRACK WINNER, 7TH EDITION, 2014

It all started when Priscilla Elora Sharuk and Antoine Vincent Jebara (Lebanese nationals)
wanted to optimize an everyday task that had become frustratingly difficult: securely
storing, managing and remembering passwords. Myki was created with the aim of resolving
challenges pertaining to protecting and storing passwords.

As at the beginning of any venture, the co-founders were uncertain of the feasibility of their
ideas and as such were exploring ways to collect feedback on their product and vision.
Their starting point was the Arab Startup Competition (ASC). With a focus on gaining
mentorship, months after the idea was first born, Myki found the ASC event to be the
perfect platform for regional exposure. It provided access to the right industry-focused
professionals that later helped build their business.

MYKI'S FUNDING BONANZA

Soon afterward, Myki started gaining ground in the regional funding scene. With its
compelling value proposition, Myki galvanized the support of key investors in 2016. The
seed investment of USD 1.2 million was geared toward helping Myki accelerate product
development and achieve a faster market fit.

In their most recent Series A funding round in October of 2018, Myki raised USD 4 million.
This was the second round of funding since the startup first launched in 2015, bringing their
total funding to USD 5.2 million. The latest round was led by all returning investors
including Dubai-based venture capital firm BECO, Beirut-based LEAP Ventures and B&Y
Venture Partners.

Since then, Myki has achieved incredible levels of exposure, which has ultimately positioned
them as a globally recognized top-tier cybersecurity startup. In 2016, Myki launched at the
TechCrunch Disrupt Battlefield in San Francisco, the first MENA-based company to launch
there. Today it is cited as one of PCMag's "Best Password Managers of 2019" and listed as
one of Apple's "Most Powerful Password Managers".
Myki also ranked at the top of Forbes' Top 100 most innovative startups for two years in a
row, and was most recently named one of "Forbes Hottest Startups of 2018".

STARTUP DEVELOPMENTS
Myki is well positioned to address the security and identity management needs and
concerns of consumers and businesses alike. The global cybersecurity market is estimated
to expand at a CAGR of 10.2% to reach a volume of USD 248.26 billion by 2023. The growth
of cybersecurity products comes on the heels of rising cyber terrorism that has highlighted
the importance of stricter data protection measures.

Today, with an international user base of over 400,000 users worldwide, Myki attributes its
success to the support leveraged from ASC, which enabled it to acquire solid exposure that
ultimately led to more credibility in the global tech and cybersecurity scene. Myki's eyes are
currently set on scaling – they are looking to expand the company's global footprint and
customer base. Myki took the first step in Q4 of 2018 by setting up offices in New York City.
In its quest for scalability, Myki is also looking to expand its U.S. operations with its
"Decentralized Identity Management" solution for Managed Service Providers.

15
12 Years of Impact:
ASC and the regional
ecosystem

As part of measuring our impact on the Arab economy

and society, ARA Research & Consultancy conducted a
survey to gather information from the startups that
graduated from the MITEF Arab Startup Competition.
The eligibility requirements for survey distribution
included startups that graduated through all years of
ASC and were either semifinalists, finalists, runners-up
or winners. The survey encompassed 70 startups
originating from 17 different Arab countries and
geographical coverage that spans the globe. The
objectives of the survey were to gather feedback on the
startups' perceptions about ASC and quantify its
impact on employment, economy and society in the
Arab region.

MITEF Pan Arab ASC's first edition attracted 247 fully

submitted applications, a number that has increased
steadily over the years to reach approximately 1,000
fully submitted applications per year – 21% annual
growth year-on-year. Founders hailed from all Arab
world countries, with an estimated 60% of the
applications coming from Egyptian, Lebanese, Saudi
Arabian and Jordanian founders.

Running the program for over a decade had brought

forth a tremendous amount of data that when studied
provides insight on multiple aspects. During the past
recent years, and comparing the location,
demographics and areas of interests of the
entrepreneurs, few trends have been observed.

16
Women at the forefront

51%

Figure 5. Women participation in the Arab Startup Competition.

Source: MITEF Pan Arab

Firstly, there is an increased participation of female

founders and team members. More women are among the
participants and winners, highlighting a stronger female
leadership in the entrepreneurship ecosystem. We are
proud to announce that

51% of the semifinalist teams have at least one female member

with a leading role,

and an astonishing 48% of the winners across 11 editions

are female led. In the very first edition of the Arab Startup
Competition in 2006, 19 of the teams had at least one
woman either as a founder/co-founder or on the
management team.

By the 11th edition in 2018, the number of female led

startups increased by 15X totaling to a number of 307
startups. 2018
307 TEAMS

15x

2006
19 TEAMS

17
Emerging hubs and industry trends
Secondly, while the main entrepreneurial regions have already been
catered for; applications are being received from founders that are
based in suburban and secondary areas in the Arab countries.

With 32% of the applications from Egypt, it remains a leading Arab

entrepreneurial hub and has also become a testbed for startups
(whether food delivery, ride-hailing, or digital content platforms).
However, Lebanon and Saudi Arabia are transforming into
emerging hubs. This is driven by governmental policies and
initiatives implemented in both countries.

31.51% 10.42%

9.52% 8.80% 7.27% 4.78% 4.46% 4.38% 4.23%

Figure 6. Distribution of ASC participants

across Arab countries.
Source: MITEF Pan Arab

With the release of the Lebanese Central Bank's Circular 331, more 32%
and more young Lebanese have decided to stay in their home
country upon graduation, rather than working abroad. Similarly, the
Saudi government’s Vision 2030, which aims to diversify the
sources of income for the Kingdom by transforming it to a
knowledge-based economy, has been positioning the Kingdom at
the frontlines of the region's growing production houses. 3%
Finally, new areas of interest are gaining momentum. Startups that
operate in digital and emerging technologies have risen in the last
years. In 2010, startups in fintech, digital technology and
e-commerce, and cyber security started to emerge to account for
3% of the total number applications received by ASC. 2010 2019
This year, these startups account for 32% of the total Fintech, cybersecurity and digital
applications received. industries & e-commerce

High-Tech, Construction, Engineering

Telecommunications & Software Other & Transportation
25.71% 12.83% 5.39%

Education & Training Health & Healthcare Travel & Tourism

13.49% 8.45% 4.5%
Energy, Environment Services
Creative Industries & Water/Green Technology Agriculture & Agritech
13.09% 7.62% 3.55%

Figure 7. Distribution of participating startups and ideas across different industries. Source: MITEF Pan Arab

18
 100 On the 12th edition
2019

AVERAGE ANNUAL
INCREASE

24% Greentech is on the rise, with a noticeable average annual increase

of 24% in startups and ideas falling under energy, environment
services and water/green technology.

On the 4th edition Figure 8. Average annual increase of applications in greentech.

23 2010 Source: MITEF Pan Arab

The Arab Startup Competition

as perceived by its alumni
All startups report that ASC is an excellent initiative. 81% and 19%
of survey respondents totally agreed and somewhat agreed with
this sentiment, respectively. Founders said that the mentorship and
training received during the competition helped refine and develop
their ideas, as well as provide a structure to their way forward in
scaling up their startups.

A N A CT I V E N E T W O R K I N G P L AT F O R M
More than 75% of the startups either somewhat agree or totally agree
that participation in ASC helped them significantly in terms of business
networking and mentorship.

The three-day boot camp and awards ceremony are both platforms for
entrepreneurs to network and team up with industry experts and like
minded entrepreneurs. In fact, in many instances, entrepreneurs were
able to find partners that either expanded their business geographically
or provided opportunities to launch a new business together.

19
 We are building elements of the Lebanese entrepreneurship
environment which now functions largely as a landscape of standalone
activities. Transforming this into a thriving ecosystem we need
enhanced coordination, and awareness among ecosystem activities
which target growth of innovation-driven enterprises.
Dr. Bijan Azad, Associate Professor and Director of Darwazah Center for Innovation
Management and Entrepreneurship at the American University of Beirut.

ALL MENA REGION 13% ALL GCC COUNTRIES 5% SOUTH AMERICA 1%

EUROPE 7% ALL ASIAN COUNTRIES 2% OTHER AFRICA 3%

ALL LEVANT COUNTRIES 2% NORTH AMERICA 6% AUSTRALIA 2%

Figure 9. Geographical markets distribution of ASC Alumni. Source: MITEF Pan Arab

20
ASC Alumni created 14,000 jobs
It is estimated, based on the reported average number of employees per
startup, that at least 14,000 jobs[1] were created by the startups that passed
through ASC.

Entrepreneurs also reported that the employment figures increased

post ASC. Although there may be different factors behind this increase,
it can be assumed that it was driven by the expansion of the startups'
operations and network effects from the increased exposure gained
through ASC. As the entrepreneurship ecosystem in the region
matures, it is anticipated that not only will the number of jobs created
increase, but their quality and sustainability will also rise.

Startups are the oil & gas of Lebanon. The Lebanese government's plan
to increase the number of startups to 2,000 with 10,000 new jobs by
2025 is certainly feasible. This has the ability to transform the country
to a production hub complementing power horses like Dubai.
Mouhammad Rabah, President of Beirut Digital District (BDD)

PART TIME EMPLOYEE FULL TIME EMPLOYEE

+45% +226%

3.6 5.2 2.9 9.4

Before ASC After ASC Before ASC After ASC

Figure 10. Team growth in terms of average number of part time and full time employees before and after
participating in ASC. Source: MITEF Pan Arab

T H E VA S T M A J O R IT Y O F T H E N E W LY C R E AT E D
E M P LOY M E NT O P P O RT U N IT I E S R E Q U I R E
SKILLED RESOURCES.
Around 90% of the created job opportunities are staffed with skilled resources[2].
Driven by the nature of the startups that are emerging and their adoption of and
reliance on future technologies, such as blockchain, artificial intelligence and virtual
reality, almost all positions are being filled with skilled resources.

[1] This number was calculated by multiplying the average number of employees per startup, retrieved
from the survey respondents, by the number of semifinalists, finalists and winners since ASC’s 5.2
inception. The number does not account for all applicants.
[2] Skilled resources are resources with at least a high school diploma.

21
Comparing and analyzing MITEF Pan Arab data, we conclude that today, students have
more appetite to pursue a postgraduate degree.

From Edition 1 to edition 12 of ASC, we observed that the percentage of postgraduate

degree holders - whether a masters or doctoral degree - has respectively increased by
4.84% and 1.68% (keeping in mind the difference in submitted application volume between
Year 1 and 12). Moreover, MITEF Pan Arab data proves that the entrepreneurship culture is
changing the mindset of current high schoolers.

Over the course of 11 years, the percentage of high school students’ applicants, that have
an idea or even a startup has increased by 6.54%. This proves that young students are more
aware of entrepreneurship and the knowledge economy.

66.8%

54.17%
22.24%

17.4%
12.21%

7.29%
7.27%
5.67% 4.11%
2.43%

High School Diploma Bachelor Degree Masters Degree PHD Other

or equivalent

% %
Edition 1 Edition 12

Figure 11. Variation of the educational background of participating entrepreneurs across 12 editions.
Source: MITEF Pan Arab

MITEF Arab Startup Competition

reviving the Arab Economy
Startups contribute 415 million dollars to the Arab economy

The reported average financials of startups indicate an estimated contribution of at least

USD 415 million[3] to the GDP of the Arab countries. Startups are an integral part of the
economy and a major contributor to their countries' economies.

MITEF Pan Arab, being an organization that works to help startups scale their businesses
and offers equity-free cash prizes, prides itself on being one of the drivers fueling the Arab
economy. This is testament to the impact that equity-free funding can have in stimulating
economic benefits as well as flexibility in resource allocation for the bootstrapping startup
founder.

[3] This number was calculated by adding the average earnings before income tax and depreciation
(EBITDA) to the average spend on employees and then multiplying the total by an average indirect GDP
multiplier, an average ratio for startup failure and the total number of semifinalists, finalists and winners
since ASC’s inception. This number does not account for all applicants.

22
Startups are able to effectively attract investments after graduating from ASC,
an average of USD 320,000.

Investor confidence in the startups increases after the entrepreneurs have been trained on
refining their business ideas and making plans for how to scale up.

More importantly, after passing through multiple stages and assessments, finalists' and
winners' business models are rigorous and have higher potential to grow. This is supported
by the fact that more than 70% of those investments come from sources other than
partners or individuals involved in the startups.

28.6% 22.9% 17.1%

Partners Angel investors Friends & Family

14.3% 14.3% 2.9%

Venture capital Donors The public

Figure 12. Distribution of investment sources after startups participate in ASC.

Source: MITEF Pan Arab

Growing the cycle of impact

Out of a total of 425 give-back engagements to society that the entrepreneurs participated
in, 70% can be directly or indirectly attributed to ASC. Give-back engagements are events
where entrepreneurs volunteer as guest speakers at local universities, participate in
community events, and mentor startups.

The knowledge that startups acquire after the events is shared back with their local
communities. Many founders have also highlighted the fact that they would like to take on
a more active role in such engagements going forward, for example, acting as mentors to
support other entrepreneurs.

Alumni are encouraged to participate as speakers/trainers in future editions and events of

MITEF Pan Arab, offering a great platform for entrepreneurs to network.

23
SUCCESS
STORY

24
Kiliim: Doing well by doing good
ASC SOCIAL ENTREPRENEURSHIP TRACK WINNER,
10TH EDITION,2017

THE COLLAPSE OF A HERITAGE INDUSTRY – KILIIM TO THE RESCUE

The story began when Ibrahim Shams wanted to purchase kilim rugs for his newborn
daughter but realized that the traditional craft had deteriorated in Egypt. The collapse of the
tourism industry in the birthplace of kilim weaving – Fowwa – initially heralded the downfall
of the craft since it used to be the main sales outlet for Fowwa's craftsmen. However,
joining forces with his graphic designer wife, Noha El Taher, Ibrahim decided to partner with
local craftsmen and designers to set up manufacturing shops in Fowwa, a village on the
Nile long known as a kilim hub. The idea behind Kiliim was created in 2016: It is a startup
that connects kilim producers to the global markets through an e-commerce platform.
Through its commitment to reviving and sustaining the dying craft, Kiliim represents the
past and present of Egyptian craftsmanship and heritage.

Ibrahim saw in the Arab Startup Competition the perfect platform to evaluate Kiliim's model
and grow its business through mentorship and training. Through the renowned competition,
the MITEF Pan Arab network helped develop Kiliim's business plan, offered customized
boot camps in design thinking and user experience, and also exposed the business to the
MITEF Pan Arab network. With the award money, they were also able to go to international
trade shows where they took Kiliim's business development to the next level.

KILIIM'S STORY OF SOCIAL IMPACT

Through ASC, Kiliim developed the ability to measure and evaluate its social impact.
Ibrahim was always able to see the potential impact Kiliim could have on the craft's
heritage, but it was only through the startup's interaction with ASC's trainers, mentors,
participants and partners that he was able to learn how to identify, measure and track the
social impact his business had on its community. This ultimately fed into Kiliim's strategy of
community impact.

The social impact business, however, is no easy business. As a creative social enterprise,
Kiliim faces unique challenges. Deep-rooted global challenges, including cheap labor and
the domination of Chinese goods in the market, have threatened the sustainability of the
craft and the income of its craftsmen. Despite this, Kiliim has already employed a sizable
number of locals and is contributing to the local economy while also sustaining the kilim
industry in Egypt.

SCALING THE HERITAGE

Kiliim's success since winning the ASC has only grown. Their skill in striking partnerships
with large investors and their ability to be selected as one of the top 20 social entrepreneurs
in the C3 Social Impact Accelerator Program are testament to their commitment to social
impact.
Kiliim is a pioneer in bringing together the worlds of heritage, modern artistry and
e-commerce. Through Kiliim, Ibrahim and Noha are sharing the magic of heritage not just
with Egypt but with the world, too.

25
Leading with
bigger steps

While the entrepreneurial ecosystem in the Arab

world is experiencing growth across industries
and regions, it still lags behind on a variety of
dimensions in comparison to ecosystem
readiness globally. MITEF Pan Arab is committed
to further expanding its impact in this sphere
moving forward. Alongside the continuation of
the Arab Startup Competition, this will be driven
by further expanding other MIT Enterprise Forum
Pan Arab programs: Innovate for Refugees and
Silicon Valley Program.

Innovate for Refugees is a global competition
with the aim of finding the best tech-enabled
solutions addressing challenges faced by
refugees and displaced communities around the
world. The Silicon Valley Program (SVP), on the
other hand, is a week-long program where
hand-picked MENA startups take part in a fully
immersive experience revolving around excellent
networking opportunities, high-caliber mentorship
and a series of enlightening workshops in the Bay
Area. The report in its newer versions will shed
light on the impact of these two programs.
Moreover, MITEF Pan Arab will take a deeper look
at the improvement areas highlighted by the Arab
Entrepreneurship Maturity Index (AEMI) and will
study the possibility of tailoring its programs
and/or creating additional targeted programs to
address those areas. However, as highlighted
above, MITEF Pan Arab cannot act alone.
Public institutions, on the one hand, should take an
active role in streamlining their policies and services
to offer a favorable startup ecosystem and take
additional action on creating an enabling
infrastructure. On the other hand, private institutions
should also tailor their services, for instance legal
and accounting advice or technical assistance, to
better match the abilities of the rising startups.
The ambition for the Arab entrepreneurship
ecosystem is limitless. The ecosystem's success
depends on the collective efforts of all players and
institutions involved. This report takes the
opportunity to shed light on the status of the
ecosystem, identify where the improvement areas are
and quantify how MITEF Pan Arab is contributing to
fostering that ecosystem.
Moving forward, a call for action from other
institutions to join hands and spearhead the unique
development of the ecosystem is inevitable.

26
Acknowledgement
The “12 Years of MIT Enterprise Forum Arab Startup Competition
Unraveling the Entrepreneurship Maturity Index”, First Edition, is
published by the MIT Enterprise Forum Pan Arab.

This report is a result of a collaboration with Roland Berger.

We wish to thank all individuals who were involved in the process for
their valuable contribution.

M IT E NT E R P R I S E F O R U M ROLAND BERGER

Maya Rahal Kushal Shah

Managing Director Senior Partner and Head of
Technology & Digital of Asia and
Farah Chamas Middle East
Head of Programs
Peter El Khoury
Nadine Ghaly Consultant
Operations Coordinator
Hani Katerji
Rami Deeb Senior Consultant
Communications & Community
Coordinator Ola Aboukhsaiwan
Consultant

Sherif Ghandour
Consultant

This report is available online at: https://www.mitefarab.org/impactreport

© 2019 -All rights reserved. No parts of this publication may be reproduced or transmitted by any form
without prior permission of the MIT Enterprise Forum Pan Arab.

27
Appendix
Methodology for the Arab Entrepreneurship Maturity Index
To analyze the current entrepreneurial maturity in countries of the MENA region, this paper has developed
a framework across multiple relevant dimensions.The dimensions offer a holistic overview of the
ecosystem's readiness to grow and foster startups. The Arab Entrepreneurship Maturity Index (AEMI)
framework highlights main elements for Arab startups and SMEs, examining key factors that will enable
them to achieve maximum potential for growth and contribution to the economy.

The quantitative analysis of AEMI is based on more than 100 indicators as shown below, which this paper
classified in six dimensions: local infrastructure, human capital, know-how, financing, business set-up and
business operations. The metrics were based on two reports generated by the World Economic Forum and
World Bank: The Global Competitive Report 2018 and Doing Business 2019, respectively. Below is the
comprehensive list of metrics used:

DIMENSION SET OF METRICS USED

Road connectivity index Liner shipping connectivity index
Quality of roads Efficiency of seaport services
Railroad density Electrification rate
Efficiency of train services Electric power transmission & distribution losses
Airport connectivity Exposure to unsafe drinking water
Local Infrastructure Efficiency of air transport services Reliability of water supply

Mean years of schooling Hiring and firing practices

Extent of staff training
Quality of vocational training
Skillset of graduates
Digital skills among population
Ease of finding skilled employees
Human Capital School life expectancy
Critical thinking in teaching
Pupil-teacher ratio in prim education
Redundancy costs
Coop in labor-employer relations
Flexibility of wage determination
Active labor policies
Workers’rights - Labor tax rate
Ease of hiring foreign labor
Internal labor mobility
Reliance on professional mgmt
Pay and productivity
Female participation in labor force

Mobile-cellular telephone Diversity of workforce Quality of research institutions

subscriptions State of cluster development Buyer sophistication
Mobile-broadband subscriptions International co-inventions Trademark applications
Fixed-broadband Internet Multi-stakeholder collaboration
subscriptions Scientific publications
Know-how Fiber Internet subscriptions Patent applications
Internet users R&D expenditures

Domestic credit to private sector Soundness of banks

Financing of SMEs Non-performing loans
Venture capital availability Credit gap
Market capitalization Banks regulatory capital ratio
Financing Insurance premiums

Cost of starting a business Willingness to delegate authority Deal with construction

Time to start a business Growth of innovative companies permits
Insolvency recovery rate Companies embracing disruptive Procure electricity
Insolvency regulatory framework ideas Register property
Business set-up Attitude toward entrepreneurial risk Cost, time and procedures to:
Start a business

Strength of legal rights Extent of shareholder rights Quality of judicial processes

Depth of credit information
Credit bureau coverage
Credit registry coverage
Extent of disclosure
Business operations Extent of director liability
Ease of shareholder rights
Extent of ownership and control Time & cost to resolve
Extent of corporate transparency insolvency
Time and ease of tax payment Recovery rate
Time and cost to import & export
Time and cost to enforce
contracts

Figure 13. Metrics of the 6 dimensions of the Arab Entrepreneurship Maturity Index.
Source: World Bank, World Economic Forum

28
For simplicity, equal weighting was applied across the variety of metrics in each dimension. Similarly, equal
weighting was applied across the six dimensions to derive the overall score of the country's entrepreneurial
maturity.

The World Economic Forum and Work Bank reports included updated data for all MENA countries except
for Iraq, Syria, Palestine, Libya, Somalia, Sudan, Djibouti and Comoros. As a result, the aforementioned
countries were excluded from the report's AEMI analysis.

Methodology for conducting the survey

Data from the MITEF Arab Startup Competition alumni was collected through interviews conducted through
the CAWI system (Computer Assisted Web Interviews). To ensure a good quality of data, interviews with
respondents were personalized, using unique credentials (username and password) for survey access.
Each account belongs to one data set, thus preventing duplicate data. Other software was used to help
provide a unique, homogeneous and intuitive interface, from questionnaire creation to data collection and
quota management. Time spent per question was also detected for further data consistency.

Methodology for the economic impact assessment

PERCEPTIONS ABOUT ASC
GENERAL METHODOLOGY
Calculated by dividing the number of answers by the total number of survey respondents
4 possible answers: "Totally agree, "Somewhat agree", "Somewhat disagree", "Totally disagree"

EFFECT OF ASC ON EMPLOYMENT IN THE ARAB COUNTRIES

1. JOB CREATION
METHODOLOGY
Calculated by multiplying the average number of employees per startup, retrieved from the survey
respondents, by the number of semifinalists, finalists and winners since ASC's inception
ASSUMPTIONS
Average number of employees per startup: 9.44 full time, 5.21 part time
Total number of semifinalists, finalists and winners (does not account for all applicants): 849
2. SKILLED RESOURCES
METHODOLOGY
Calculated by dividing the average ratio of skilled jobs by the total number of survey respondents
ASSUMPTIONS
Skilled resources are resources with at least a high school diploma

EFFECT OF ASC ON THE ECONOMY OF THE ARAB COUNTRIES

1. GDP CONTRIBUTION
METHODOLOGY
Calculated by adding the average earnings before income tax and depreciation (EBITDA) to the average
spend on employees and then multiplying the total by an average indirect GDP multiplier, an average ratio
for startup failure and the total number of semifinalists, finalists and winners since ASC's inception

ASSUMPTIONS
Average EBITDA: c. USD 160,000
Average spend on employees: c. USD 110,00
Average indirect GDP multiplier: 2
Average ratio for startup failure: -10%
Total number of semifinalists, finalists and winners (does not account for all applicants): 849

29
EFFECT OF ASC ON THE SOCIETY OF THE ARAB COUNTRIES
1. GIVE-BACK ENGAGEMENTS COMING FROM ASC
METHODOLOGY
Calculated by adding the total number of direct or indirect engagements per startup attributed to ASC
to the total number of give-back engagements after the startup's participation in ASC

ASSUMPTIONS
Total number of give-back engagements: 425
Total number of give-back engagements attributed to ASC: 273

30
About
MIT Enterprise Forum
Pan Arab
MIT Enterprise Forum (MITEF) Pan Arab is
part of a global network of chapters
dedicated to the promotion of
entrepreneurship and innovation worldwide.
We inform, connect, and coach early-stage
technology entrepreneurs—enabling them to
rapidly transform ideas into world-changing
companies.

Founded in 2005 with the goal of promoting

and enriching the entrepreneurship
ecosystem in the Arab World,we aim to
celebrate and support all potential startups
and entrepreneurs in the Pan Arab Region
through our programs.

About
Roland Berger
Founded in 1967, Roland Berger remains the
only leading global consultancy firm with
non-Anglo-Saxon roots. The firm is German by
origin, European by nature and global by
ambition, with strong footprints in all major
international markets.

Roland Berger’s entrepreneurial spirit has

shaped its growth and fueled its outstanding
achievements since the early days of the firm.
With nearly 50 years of continuous growth and
2,400 employees working in 34 countries,
Roland Berger is one of the leading players in
global top-management consulting and has
successful operations in all major international
markets.

31