PITAPOLICY is live-blogging “Role of Entrepreneurship in Egypt” event hosted by the Middle East Institute… (Note the focus on technology entrepreneurship discussion, which is more focused on the Information Communication Technology sector.)
In Egypt, innovative enterprise development has taken off in the wake of the 2011 protests with thousands of youth turning to entrepreneurship as a means of creating economic opportunity as well as addressing social challenges.
The Middle East Institute is proud to host a discussion about Egypt’s burgeoning start-up sector with entrepreneurs Yumna Madi (KarmSolar), Mona Mowafi (Rise Egypt), and Dina Sherif (Ahead of the Curve, Silatech), who will discuss their companies’ innovative ideas, the opportunities and challenges they face as entrepreneurs, and their hopes to see greater development and job creation in Egypt through the support of more innovators and start-ups. James A. Harmon, chairman of the Egyptian-American Enterprise Fund, will discuss U.S. and international support for emerging business initiatives in the country. Christopher M. Schroeder, author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, will lead the discussion. Bios here.
Big institutions (top down) think of people as problems, bottom up institutions think about people as assets-paraphrasing Dina Sherif by Schroeder in opening up discussion.
Schroeder: What are big institutions, who are doing good things in places like Egypt, missing most?
Dina Sherif: Many Egyptian youth are serving as assets. Look at all the incubators and accelerators, like Flat6 Labs and Silatech. Ahmed Alfi founded Flat6, a technology park on the AUC campus to create a “mini-Silicon Valley”. Focus should be on young people to create the businesses. (Alfi’s shared workspace is the largest in the Middle East).
Schroeder: What’s the story of RISE Egypt?
Mona Mowafi: People are still fighting for economic justice–keeping a “laser focus on the social and economic justice” of the country. For example, many Egyptian diaspora from Harvard and Yale wanted to make an impact, so founded RISE Egypt. Realizing impact for Social Entrepreneurship will be incorporated later this summer.
Schroeder: What’s the difference between entrepreneurship and social entrepreneurship?
Mona Mowafi: Social entrepreneurship is focused on business development considering the community’s social and cultural environment while utilizing private sector for development outcomes. Our needs assessment showed that “access to capital” ranked need number 2. Financial return is a bottomline for many businesses, but social entrepreneurship is
Schroeder: “We hear that it seems like an elite phenomena–those students coming from Harvard and such–having a warm and fuzzy feeling?”
Mowafi: It may be true for some. But there are many examples of projects going out to areas that do not reflect the environments that these people (Diaspora who are alumni from elite institutions) come from.
Schroeder: What’s the backstory of the Frontier Fund?
James Harmon, Chairman, Egyptian-American Enterprise Fund (used to be an investment banker): I am an optimist and a hopeful. My former life comes from running the Export-Import Bank in the US and makes a distinction between the “frontier” developing world, where the risks are much higher, to set up a separate fund. We invested in Pakistan and Lebanon, with an average return on our fund of an average of 17% per annum. The Frontier world fund covers all of the Middle East.
Where there is political stability, we see economic stability.
6 Egyptian citizens and 3 Egyptian-Americans are part of this Egyptian-American Enterprise Fund. Initially the fund had 300 million dollar fund was to be a partnership between public sector and private sector.
Egypt’s stock market has gone up 45% since “Egypt’s coup”. Yet so little investment made in infrastructure. Investors will get good returns. 50 percent of Egypt population is under 30…but I think the unemployed is even more: one-third!
This isn’t rocket science: once there’s a parliament and president, private investment will grow–as we’ve seen in frontier markets. If it’s Sisi, he has the critical leadership skills and can address the subsidy issues.
Schroeder: People think of investment and rebuilding but say that there’s not enough money in Egypt.
Harmon: Five years from now, people will be saying “Why didn’t we invest in Egypt when Chris Schroeder” first told us?” Look at the automobile market–we can improve the traffic flow and reduce accidents in Cairo if we introduce new forms of transportation. At the same time we can recycling…and same for healthcare. My one message–especially to those who say there’s no money like we see in Japan– there is money available…look at how people invested in the stock market I described earlier. It’s not impossible.
Schroeder: How do you think about confluence of opportunities down the road for education?
Mona Mowafi: We should see the areas of recycling, alternative energy like solar, healthcare, and education. Look at “Educate Me” a program that is the equivalent of a charter school system for experiential learning.
We see actors on the ground like Injaaz, Endeavor, Ashoka, and others, which create a pipeline of support to get people to think about innovation before they enter the programs.
- Dina Sherif: I’m going to differ a bit from Mona. Not enough schools exist and not enough teacher training, yes, but it’s more about the way teachers teach. I love EducateMe, and other NGOs that started the one-classroom school. But these are small initiatives that will never go to scale because they are dependent on donor funding. Nafhem, another organization, provides accessibility to those families who want tutors. But it’s not solving the problem of education scope.
Harmon & Schroeder: Banks don’t fund startups. Silicon Valley wasn’t build because of banks–need angel investing in Egypt, like any other country.
Sherif: We NEED education on investor culture and what their potential impact can be rather than having a dependence on other countries like the US and UK because we can bring money from within.
Schroeder: We discussed other sectors that will help build a better Egypt, like alternative energy. Thanks for joining us, Yumna to describe Karm Solar…your presence here is a testament to infrastructure development making attendance possible. (Madi was able to take a train to get over to DC even though many flights were canceled due to US winter storm Janus.)
Yumna Madi: Karm Solar est. 20011: wanted to pump water in deep wells and are very from electiricty grid. We wanted to offer a solution with a partner in US to compete widisel generators, which is subsidized. We didn’t want to rely on the government. Karm Solar developed the first high-capacity water pump solution in Middle East.
In terms of hard to reach locations, we have a site in Sudan. Why is this better for a farmer. won an innovation award. took 2 yrs. 50 kilowatt solution for a 30 kw pump. Signed a contract for one well…and are now doing 7 wells. It’s not about cost, but about reliability. If they don’t get supply for 1 day they lose their entire season of crops. Built our office in the western desert by using natural earth material. Client saw it and asked for a structure like that for a site they had for farming.
Sherif: Collaborating with USAID is too complicated, so many walk away from seeking them out for Egypt projects. (Harmon added that 40 pages long used to be a form at the Ex-Im Bank–which hasn’t done enough in Egypt.)
Madi: Starting a business in Egypt is easy: only 5 days. But it’s the knowledge needed for permits. Her response to “Does Government Hate Entrepreneurs” by Mohammed Eldahshan