One young Tunisian set himself on fire because he was deprived the dignity to work.
That one man, that one act, inspired thousands to take to the streets to be heard and to demand economic democracy. The drive for economic democracy is so deep it galvanized old and young, men and women, Muslims and Christians, and different tribes. What we are seeing is a breathtaking alignment of previously opposing forces demanding economic participation and progress.
The good news is that there is a new breed of economic builders on the ground. They have the capabilities to unleash growth and innovation on a scale never before seen. The bad news is that no one knows they exist.
MEET THE ARABIA 500 Applicants
My colleagues and I have studied more than 200 entrepreneurs who applied to the AllWorld Arabia 500 ranking1 (to be announced October 2011 under the Patronage of Queen Rania of Jordan). The Arabia 500 systematically identifies fast growing private companies of the region – the next big companies generating ideas, jobs, and paving the way for new industries2.
Hundreds have applied to the Arabia 500 from MENA, Pakistan and Turkey, completing surveys and providing audited financials to confirm their revenues. Those that make the ranking have the fastest growth rates over the past three years. They are transparent and demonstrate testable fortitude. Already, 200 have been credentialed for the Arabia 500.
What we have found is amazing. The first 200 qualified applicants are growing a blistering 60% a year, growing at 10X the rate of private sector employment of the fastest growing countries. They are creating growth companies in industries ranging from IT to Eco Tourism, with IT and Telecommunications leading the way. Leading the IT charge are firms in high-tech data and facilities security, and firms providing web portals, Arabic content, and hosting services.
The companies average $22 million in revenues (median size $4 million) and 220 employees (median employees 52), with the largest companies coming from Saudi Arabia and the smallest from Jordan. In the past three years, these companies have created 15,000 jobs, and created invaluable on-the-job training.
The ventures we uncovered generate far more jobs and wealth than the typical small businesses do, and they often open up new markets. They include companies like the UAE's Bayt.com, the region's leading job search site, Rumman, founded by three women as the first events and publishing company focused on Saudi Arabia's large youth market, EcoHotels, aiming to create a Jordanian eco tourism industry starting with the no electricity Feynan Lodge, or Nayatel of Pakistan, which got the tech companies of Islamabad up an running in 48 hours after the 2008 bombing of the Marriott Hotel took out the infrastructure of tech park next door.
These men and women are educated, tech-savvy, globally connected, multi-lingual, and are passionate country builders. They have mastered challenging and uncertain circumstances, and as one entrepreneur wrote in his application, they are "unputdownable." They are on average 42 years old, and most founded their first company when they were 31, after gaining college degrees and industry experience.
They are also High-Intensity Entrepreneurs.3 Most have formed another successful company, 78% expect to start another company in the next 2 years, and as a group they have helped 104 employees spin off as entrepreneurs. World of Light & Electricity of Lebanon has already helped 10 employees launch their own start-ups. The Arabia 500 represent 553 existing companies, and 211 they will form in the near future. They are the new "incubators" and they blow away the aspirations of most actual incubators.
They are building the 21st century work environment. Fully one-third offer profit sharing plans, performance based financial bonuses, and flexible work schedules. Twenty percent even offer home ownership benefits in addition to salary. They provide considerable on the job training and encouragement to their staff, which translates into companies growing 60% a year. When asked what is their #1 constraint to growth, they say it is finding qualified managers and employees. Because of the poor education systems, many of these companies fill the gap and grow talent from inside.
A good example is Saudi-based SecuTronic, a high-tech security company that grew an amazing 2,500% in five years. It has a flat management structure, and the co-founders state "There is no boss – just 200 entrepreneurs working together. This creates an energy that benefits the entire company, as well as our clients and shareholders."
Just imagine what could be done to expand economic opportunities in the Middle East if we knew about all the companies like these? What if we had a strategy to accelerate their growth to create even more jobs? What if these companies were cultivated as the next IPOs and future global brands?
THE VISIBILITY DEFICIT
The problem is that few will be able to get $20 million, let alone IPO, because no one knows they exist. For the entrepreneur, reaching $20 million is a terrific mark of achievement, but countries can't achieve real growth if entrepreneurial firms don't get to levels of $100 million or $1 billion.
The world is focused on romantic investments in microenterprises or business plan competitions. Few look for mid-sized growth companies, and there is no data to help find them. Contrast this to the US with abundant media coverage and informed investor networks about rising stars. The magic of US entrepreneurship is that it has better systems to find and scale entrepreneurs, not better entrepreneurs.
Lack of entrepreneurial visibility has serious consequences. Because these country builders are off the economic map, investors are not looking for them, governments and large companies don't contract with them, and talented college graduates have never heard of them. Without visibility, economic potential is artificially suppressed and few companies will get to true scale. Our conclusion working in the Middle East, Africa and Asia is that entrepreneurs are now widely distributed, and the opportunities are significant, but they face a serious "visibility deficit" to achieve scale.
In October, AllWorld will publish the first annual Arabia 500 and hold a 3-day Arabia 500 Global Summit. Simply by credentialing these companies to a global standard and putting them on the map, new investment will flow to the region, opportunities will open for the 500 so they continue to scale, and they will signal to millions of MENA youth that there is something worth working for.
We call this Visibility EconomicsTM.
As part of the Arabia 500, these top entrepreneurs will get to know their counterparts from across the region. They will open up the flow of ideas, investment and creativity between countries. They will build the next Middle East.
Its time for economic development to assume growth entrepreneurs exist and build systems to scale them.
FAST FORWARD to ENTREPRENEURAL EXPANSION
The world at large urgently needs to ramp up the pace of job creation by energizing high-growth entrepreneurship. Here are six "rapid response" strategies to move countries forward:
- create an information baseline – an annual ranking of each country's high-growth non-listed companies to catalyze investment, identify emerging industries, and diffuse new ideas,
- open up government contracting, giving small companies the opportunity to scale and to offer government innovative approaches,
- create visas for entrepreneurs with track records,
- encourage sovereign wealth funds to invest in indigenous companies,
- place college graduates with growth entrepreneurs for real training,
- begin a region wide dialog to unlock growth through coordination.
UNLEASHING THE 21ST CENTURY of ENTREPRENEURSHIP
Countries that want to play in the global economy need to nurture companies like the Arabia 500 to unleash growth an innovation – not to mention create employment and employability for the rapidly growing younger population.
For multinationals, these ventures can be a path to accessing the new ideas, customers, suppliers and talent of emerging markets. For governments seeking to generate progress and prosperity, this new breed of innovators offers the path.
The Middle East could be on the verge of a global entrepreneurial heat wave, but the current environment for entrepreneurs is unhelpful and often stifling. Real success in the Middle East will be when entrepreneurs are given the room to shine. Not bringing them to the forefront is to compromise and imperil the long-term economic and political stability of the region.
1 All non-listed companies from MENA, Pakistan and Turkey are invited to apply to the Arabia 500 at AllWorldLive.com
2 Thank you to our partners who have reached out to entrepreneurs throughout the Middle East: Potential, Endeavor Jordan, Endeavor Egypt, Yalla StartUp, Souq.com, the the Business Council for International Understanding, the National US-Arab Chamber of Commerce, the Institute for Social & Economic Development, the Business Development Center of Jordan, the Egyptian National Competitiveness Center, AMIDEAST, Bader Young Entrepreneurs Program, Berytech, Mowgli, Khalifa Fund, the Monitor Group, JEAustin & Associates. Thank you also to our academic partners, Harvard University and the Olayan School of Business of the American University of Beirut.
3 Habiby and Coyle, "The High-Intensity Entrepreneur," Harvard Business Review, September 2010. Also listen to the HBR podcast "The Global Entrepreneur."
AllWorld’s mission to make visible ALL the scalable growth entrepreneurs of the emerging world, creating the largest information system and network of growth entrepreneurs.
