High rents are what bother region's tech start-ups

Technology start-ups in the Middle East and North Africa (Mena) are struggling to office space that fits their budgets and qualified human and trained human capital, according to a new survey released on Wednesday.

Among the survey’s findings, 68 per cent of the respondents said it is difficult to source adequate funding to establish start-ups, 75 per cent articulated challenges in securing office spaces that fit their budgets, and 44 per cent expressed difficulty in attracting qualified and trained human capital.

The survey, conducted by Dubai Silicon Oasis Authority (DSOA) in collaboration with Google, and YouGov, polled 150 start-up entrepreneurs in the age group of 20-40 years across the UAE, Saudi Arabia, Egypt, Jordan, Lebanon and Morocco.

Shahla Ahmed Abdul Razak, Deputy CEO of Dubai Silicon Oasis Authority (DSOA), said: “The report identifies key challenges faced by technology start-ups and business entrepreneurs in the region. It also highlights vital needs for a nurturing and enabling ecosystem for companies to establish their businesses in this region.

“As a leading technology enabler, we will use the survey’s key findings to further drive the growth of technology start-ups as well as Islamic Economy initiatives in the digital and Arabic content domains in the Mena region. We are committed to the UAE’s vision to support SMEs. As part of this priority, we will continue offering business assistance and incubation services to emerging entrepreneurs in the region, besides attracting new tech start-ups.”

In light of these findings, Shahla said: “DSOA is set to inaugurate DTEC, technology entrepreneurship centre, in Q1 2015. DTEC has been designed to host more than 1,000 entrepreneurs in a highly motivating and efficient work environment that supports entrepreneurial activities and boosts the creativity of talented technology enthusiasts.”

Wassim Kabbara, Head of E-commerce, Retail and Local at Google in Mena, said: “Despite some of the challenges that entrepreneurs may face, they remain very optimistic about the value of the web. One of Google’s key objectives in Mena is to support and help grow technology startups and this research is the first step for us to understand how we can best support these young businesses. This is only the beginning.”

Potential in new markets

The survey also revealed that nearly 70 per cent of all technology start-up companies in the region found it challenging to access funding and talent due to the non-availability of support from banks and investors.

On the flip side, 84 per cent of the respondents see considerable potential in new markets, while 58 per cent remain optimistic about the surge in online shopping and e-commerce in the region. Additionally, 26 per cent expect an improvement in the security of online transactions.

The survey also indicated that SMEs today are better aware of the power of communication and publicity. Nearly 91 per cent of respondents confirmed using social media as their main marketing tool.

Most of the respondents stressed the vital need for a broader legal infrastructure with flexible labour laws to encourage and promote the region’s emerging start-up community.

More than 72 per cent of the companies surveyed were launched between 2012 and 2013, reiterating the impact of a resurgent regional economy following the global financial crisis.

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