The startup business in the Arab world is growing at an accelerated pace, yet still remains uneven in terms of geography and industry. It is only natural for a region with a collective GDP of $2.8 trillion, surpassing that of countries like France and the United Kingdom, to elevate its investments in the startup business, especially through its local sovereign wealth funds and other public sector-led initiatives.

The second edition of the MIT Enterprise Forum Pan Arab Impact Report comes at a defining moment for the region’s entrepreneurial DNA, with an increasing number of economies in MENA putting greater efforts into building competitive startup ecosystems. This comes with a deeper understanding of the impact of startups on the local economic landscape and its competitiveness in the global playing field. Roland Berger has restated its commitment to partnering with MIT Enterprise Forum (MITEF) Pan Arab to examine the rapidly changing startup economy in the MENA region and evaluate MITEF Pan Arab’s impact on the domestic economies.
Assessment of the Arab entrepreneurship landscape

The Arab Entrepreneurship Maturity Index (AEMI) was originally created to provide a quantitative assessment of what strengths and pain points prevail across the Arab world. Henceforth, it provides insights into how the MENA region is gearing its policies and shaping its functional systems to provide a prosperous future for aspiring businesses.

The AEMI leverages information from publicly available reports published by international organizations such as the World Bank and the World Economic Forum. Collected data is compiled into an index tailored to the Arab world’s capability to foster startup businesses.

Six evaluation dimensions have been set to guide the assessment of the startup ecosystem and the potential for entrepreneurial ideas. The dimensions are evaluated according to defined metrics, which are indicators of the health of a critical function within the entrepreneurship ecosystem. Similarly, these metrics are broken down into sub-metrics, which are specific and directly indicative criteria that feed into the metric scores. Finally, each of the dimensions, metrics and sub-metrics are given a certain weighting factor that considers the extent to which each data point is prevalent in the overall assessment.

Evaluation dimensions of the Arab Entrepreneurship Maturity Index

Human capital

• Level of skills of the workforce, including the quality of education and talent management

Know-how
Distribution of information and communication technology, state of R&D and level of innovation

Financing
Availability and maturity of credit and financial products that nurture productivity of businesses

Business setup
Ease of starting a business, including time and cost to obtain required permits

Business operations
Factors necessary to operate and grow a business, including IP protection and ease of trade

Local infrastructure
Quality and extension of basic infrastructure needs of a business including internet

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Written by MITEF Arab
Image: MITEF Arab
Publication date: April 27, 2020

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