The Middle East might be the home of the next Silicon Valley. Why does this matter to today’s defense industry? As troops draw down from military posts overseas, fostering economic success in the region grows increasingly important. As private defense contractors take on new roles overseas, they may see technology playing a growing part of the region’s economy.

Despite the region’s turmoil, the Middle East is especially ripe for tech entrepreneurs, according to leading tech entrepreneur and investor, Christopher Schroder.  In his new book, “Startup Rising: The Entrepreneurial Revolution Remaking the Middle East,” he describes why the region’s current conditions could spawn mammoth success.

Much of the Middle East is already very tech-minded: smartphone ownership is 140 percent in some areas – meaning many have multiple phones.   Smartphones have facilitated access to learning and the global movement of ideas, especially to those without access to computers or formal education.

This technology revolution could have a transformative effect on a region whose educational system is variable, and whose population is heavily young.

The internet is famously egalitarian, offering information and opportunities to anyone with access, which facilitates a bottom-up approach of innovation.  Development in the region has historically been top-down, typical of a “who-do-you-know” society – a concept known as “wasta” in Arab, especially Lebanese, culture.

Tech entrepreneurs have lots of low-hanging fruit, Schroeder says.   While nine to ten percent of internet readers are Arabic-speaking, only one percent of the web is in Arabic.  Apart from revolutionary technology, there is room for tech “improvisers” who bring social communications and online merchants, such as  Amazon, to Middle Eastern audiences.

In addition to the challenges characteristic of emerging markets, the Middle East presents its own set of unique ones.  Weak legal and rule of law infrastructure, corruption, and a lack of reliability as basic as roads and the movement of goods, are impediments to entrepreneurs and investors alike.

Likewise, young, ambitious techies still require funding for their startup dream.  While the region is lush with wealthy, would-be financiers, investing growth capital in startups is still a nascent concept in the culture.  The possibility for exceptional success in the region has western investors curious, although many are reluctant amid the ongoing instability.  Schroeder says there has been a rise in angel investors, though, who are hopeful and willing to take the risk.

Related News