Lebanon Can Become MENA Tech Gateway: UKLTH Report
A new report by UK Lebanon Tech Hub, maps out how Lebanon can become the tech gateway to the Middle East. It highlights Lebanon’s huge growth potential in FinTech, well-being (healthcare, fitness, and food lifestyle products), and Digital Visualization, and outlines a plan to create 25,000 ICT jobs by 2025.
It’s the first anniversary for UKLTH, which supports dynamic Lebanese tech entrepreneurs. One year on, new figures show that nearly $12m new revenue and investment has been secured and more than 130 new jobs created as a result.
The new report’s findings followed the examination of 339 ICT companies in Lebanon and are based on a mapping of strengths and weaknesses of the local knowledge economy, an assessment of global trends, and a comparison of ecosystem development experiences with countries of a similar profile.
Interestingly, the report, which compares Lebanon to Estonia, Latvia, Northern Ireland, and Israel in terms of the time taken to transform a knowledge economy into a more developed, innovation-harnessing and exporting economy, has identified three distinct flagship sectors for growth. These are FinTech, well-being, and creative visualization in retail. The three flagship sectors, the report states, are to be enabled by three core technological capabilities: Software as a service (SAAS), Internet of Things (IoT), and Digital Technologies.
The report recommends that Lebanon focus its human resources, investments and knowledge production capabilities around these three flagship sectors. This, the report says, will then catapult Lebanon into the Top 10 entrepreneurial countries worldwide and so create 25,000 new jobs by 2025.
The report estimates that growth in the knowledge economy in Lebanon would increase the number of employees directly related to the sector by 15% and a further 5% increase in the wider economy with spillover effects that would contribute an additional USD 7 billion to Lebanon's GDP by 2025.
The potential of Lebanese entrepreneurship to benefit the country’s economy is highlighted by the early success of the UKLTH’s accelerator program. The first cycle of the program saw 45 Lebanese companies selected by the UKLTH for support, based on their potential to expand on the global stage. Of these, 15 were chosen a year ago by the UKLTH to base themselves in London, using the UK capital as a base for attracting investment, expanding overseas and tapping into the expertise of institutions such as University College London to help them develop global expansion plans.
Figures published today show the impact that UKLTH has already made:
- 138 new jobs have been created by the companies;
- $7.4m in additional revenue for the companies has been achieved;
- $4.4m in new funding and additional investment has been secured by the companies; and
- 8 international partnerships have been secured, including STARTX Accelerator and Paris&Co
A second cycle of the program will be launched soon with 30 new places available for another wave of entrepreneurs.
Room for Improvement
Highlighting the current regional instabilities, the report recognizes the limitations facing the key stakeholders actively engaged in supporting Lebanon’s entrepreneurial ecosystem. It therefore proposes two key demand-and supply-side interventions to accelerate the growth in these flagship sectors.
(1) An international research and development hub that would act as a host for Lebanese startups, incubators and entrepreneurial initiatives, alongside multinationals, mid-sized companies, as well as students. It would offer free access to data, research material, and technical support and advisory. It would be a leader in research and would also offer support to other research institutes.
(2) A national resource center that would encourage foreign investment into Lebanon, in a non-traditional way, servicing a global demand that remains unmatched by sufficient supply.
Rankings on the International Stage
The opportunity is promising for R&D transfer from academia to industry as Lebanon is ranked 15 out of 62 countries in the Global Entrepreneurship Monitor 2015 report. The same report also highlights Lebanon as ranked of 18 out of 62 in entrepreneurialism post-school. The World Economic Forum’s Global Information Technology Report ranked Lebanon 14th out of 144 countries for its quality of education and fourth in mathematics and science.
The report also identifies Lebanon’s highly educated, skilled and successful diaspora as a key pillar of its resilience as well as a huge source of opportunity going forward as it provide strong access to several key international markets. There are 81 Lebanese in the list of the top 500 Arab influencers in the world mostly concentrated in the UAE, the US, and Europe. Lebanon’s remittances have grown steadily from USD 2.54 Billion in 2002 to USD 6.92 Billion in 2012 to USD 7.7 billion in 2014. In 2014, Lebanon ranked the 18th largest recipient of remittances globally. As a percentage of the GDP, remittances amounted to 16.2%, the 13th highest ratio in the world.
“Our ecosystem is pivoting and that is thanks to the effort of each and every stakeholder in our respective roles but more specifically thanks to the initiatives of the Central Bank of Lebanon. The UK Lebanon Tech Hub one year on achievements are yours as much as ours. I am confident that whatever value our program gave you, you will give it back to Lebanon exponentially after you make it globally” said Nicolas Sehnaoui, Chairman of the UKLTH, speaking at an event in Beirut to celebrate the one year anniversary of the UKLTH.