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INSIDE

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Young entrepreneurs will have wider role in the economy -> 30 Emad Al Khaja, executive director of Injaz Qatar, speaks about the organisation’s involvement with the youth, and what he feels are prerequisites to developing a more broadbased entrepreneurial culture in the country.

INSIGHTS

Showcasing successful entrepreneurs helps start-ups -> 14 Khalifa Saleh Al Haroon, CEO and founder of Haroon United Group and iLoveQatar Network, in an exclusive conversation with The Edge SME Impact, speaks about what more needs to be done to ensure that young Qataris pursue entrepreneurship as a career.

ENTREPRENEURSHIP BRINGS INVESTMENT TO THE COUNTRY -> 18 Stefan Lindberg-Jones, managing director of Ginger Camel, gives his take on the entrepreneurial climate of Qatar. INTERVIEWs Family-owned businesses look for corporate governance structures -> 32 Serge Besanger, academic director, Executive Education, Custom Programs, HEC Paris, and Raja Assili, chief operating officer of HEC Paris in Qatar, on why they launched a course for Family Owned Businesses.

FEATURES

Driving Qatar’s SME matrix through e-Commerce -> 20 The growth potential of Qatar’s QAR3.71billion e-commerce market is well documented, but the sector still faces a number of challenges – a topic discussed during Qatar’s e-Commerce Forum held in Doha recently.

30 Perspectives Attracting talent for SMEs -> 10 According to the Middle East Job Index Survey released by Bayt.com in August 2015, 60 percent of SMEs across the region indicated their intention to hire new employees in the next three months, while 80 percent said they will most probably hire talent within a year’s time, writes Lama Ataya.

ictQATAR’s DIC: Catalysing entrepreneurship -> 26 The Digital Incubation Center was set up to boost ICT innovation in Qatar, particularly among young people at the critical early stages of starting or growing a technologyrelated business. The Edge SME Impact speaks to the entrepreneurs who have used the DIC to transform their innovative ideas into viable businesses. Green SMEs: Prospects and challenges -> 34 Young and small firms are emerging as main drivers of radical eco-innovation in the industrial and services sectors, writes Salman Zafar. Connect with us online www.gingercamelmedianetwork.com/edge

SME financing: What more needs to be done -> 8 One area of focus for SMEs is to broaden the uptake of the Al Dhameen programme that is spearheaded by Qatar Development Bank, writes Oliver Cornock.

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Clouds

n a country such as Qatar, where the hydrocarbon component to the gross domestic product is still an estimated 50.5 percent as per the International Monetary Fund data in early 2015, employment in the energy sector naturally comes with salaries and perks which a start-up or a small and medium enterprise cannot compete with. That said, policy makers have long argued that building the base of an economy on a finite resource, as hydrocarbons are, is not only illogical but also unsustainable in the long term SME Realising HHP.pdf the 1shortcomings 11/9/15 of depending 10:31 AM on hydrocarbons as the sole engine of

the economy, the General Secretariat of Development Planning in 2007 (then the Planning Council) had engaged the World Bank to assess and come up with their recommendations for economic diversification. In their report, Turning Qatar into a Competitive Knowledge-Based Economy, released in May 2007, the World Bank had recommended that Qatar needed to develop “an appropriate economic incentive and institutional regime that encourages the widespread and efficient use of local and global knowledge in the economy, that fosters entrepreneurship, and that permits and supports related social transformations”. If the World Bank’s report was the first open call to foster entrepreneurship, two subsequent policy announcements – Qatar National Vision 2030 and the National Development Strategy 2011-16 – continued on the theme, reiterating on human capital creation. A continuum in the series of developing and

nurturing a local talent base comes from HH The Emir Sheikh Tamim bin Hamad Al Thani, who in his latest address on the opening of the Advisory Council on November 3, pointed out that local businesses need to stop being patrons of the state, and create a more robust private sector. In conjunction with Global Entrepreneurship Week, the launch issue of The Edge SME Impact brings firsthand experience from existing entrepreneurs, and on what they feel about the larger matrix of entrepreneurship in the country. It also features the measures that the Ministry of Information and Communication Technology is taking as part of its Digital Incubation Center and its initiatives to drive SMEs through e-commerce.

APARAJITA MUKHERJEE editor

EDITOR'S LETTER

FROM THE editor

bits and bytes THE EDGE SME IMPACT’s guide to the weird world of SMEs 8 hottest start-ups in the GCC right now

BRIDG

This Dubai-based secure mobile payment app (which, significantly, can also be used offline and when your smartphone is in Flight Mode) won the first Start-up MENA GCC Pitch Challenge in 2015. bridgtheapp.com

SHOPSHOPME

A UAE-based directory of local retails stores (and their on-shelf inventory), it’s being called ‘The Google of retail’. shopshopme.com

FI TECHNOLOGIES

That’s ‘fi’ as in WiFi. This Qatar start-up provides free wireless hotspots in high foot-traffic locations, like coffee shops, airports and hotels, etc. Those hotspots are then used as a platform for advertisers to reach targeted audiences. fitech.com.qa

LOADME

This Dubai-based start-up is (for lack of a better term) the Uber of trucking. It’s a mobile search tool that lets Middle East users find transport or shipping companies, or loads that need transportation. loadme.ae

BOXIT

This Kuwaiti storage service gives users free boxes, which they can pack and store in warehouses for a monthly fee. It’s like Dropbox, but for physical storage. boxit.co

IOGROW

A Qatar-based customer relationship manager that helps sales teams generate leads from social media platforms, including LinkedIn, Twitter and Gmail. iogrow.com

FALCONVIZ

This Saudi Arabian 3D aerial surveying, mapping and modelling system offers non-obtrusive hi-res scanning of rural and urban environments. falconviz.com

CROWDANALYZER

Another Dubai-based start-up, which is the first Arabic-focused social media monitoring platform. crowdanalyzer.com

TALK THE TALK Common (and often over-used) start-up scene buzzwords, and what they mean. BOOTSTRAPPING:

No money? No problem. Like the old English saying of “pulling yourself up by the bootstraps”, this plan has you using whatever (limited) resources you have to self-fund your start-up.

GAMIFICATION:

An engagement-boosting strategy whereby users/employees/ 6

participants use virtual reality gaming concepts to earn incentives.

UNICORN:

A start-up that’s worth USD1 billion (QAR3.64 billion) or more, based on equity funding. They’re supposed to be rare (given the mythical name), but according to some estimates, there are more than 100 of them.

DECACORN:

A unicorn that’s worth USD10 billion on more, based on equity funding. Much more rare.

A/B TEST:

When a start-up has to choose between two options, they will crowdsource the solution by putting the choice to users. Half of their users will see Option A, the

other half will see Option B; and the winner is the option that gets the most traffic or social shares.

THE UBER OF...:

A quick way to pitch your startup… if, like the taxi-service-that’snot-a-taxi-service Uber, it’s a market disruptor which lets users access a service at the touch of a smartphone.

HOW SAFE IS YOUR DATA?

Not as safe as you would hope, according to Symantec’s latest Internet Security Threat Report.

312 major security breaches reported worldwide in 2014, representing a

23% increase on 2013’s total of 253. 49%of these breaches were caused by deliberate cyber attackers, while

22%were caused when secure information was accidentally made public. Top sectors breached, by the number of incidents

37% Healthcare (116 incidents) 11% Retail (34 incidents) 10% Education (31 incidents) 8% Government & Public Services (26 incidents)

6% Financial (19 incidents) Top sectors breached, by the number of identities exposed

59% Retail (205 million) 23% Financial (80 million) 10% Computer software(35 million) 2% Healthcare (7 million) 2% Government & Public Services

12 attributes that are crucial for successful SME owners 1. Resilience: This is possibly the most important characteristic for aspiring entrepreneurs – the ability to deal with setbacks and bounce back when things don’t go as per plan. 2. Grit: Successful SME owners also need to develop their perseverance – to have undeterred focus and determination in achieving long-term goals, even when things may seem very hard in the short term. 3. Self-Efficacy: The confidence and belief in yourself even when no-one else does. 4. Autonomy: Entrepreneurship can be lonely sometimes, and successful entrepreneurs need to be equally comfortable in working independently and in leading teams. 5. Will: Having a sense of drive is crucial – entrepreneurs show exceptional passion for their ideas, dreams and businesses. Staying power is crucial. 6. Energy: Being self-employed is a 24 x 7 x 365 job. Seriously. Successful entrepreneurs need to have the physical and mental energy to work tirelessly around the clock. 7. Flexibility: Things almost always don’t go as planned, and SME owners need to be flexible, willing and open to change. In fact, they need to thrive in situations of change. 8. Realism: Having a sense of realistic optimism is key. Entrepreneurs need to be brave in taking risks, be positive and hope for the best. 9. Agility: Aspiring entrepreneurs must be agile, be willing to learn from mistakes and keep up with the latest trends and developments in their sector(s) & business areas. 10. Creativity: “Innovate or be left behind” is the mantra for those looking to run successful small- and medium-sized businesses. 11. Execution: Many dream of leaving the comfort of their secure jobs behind to start their own businesses, but only a handful take the plunge. Successful entrepreneurs cannot afford to sit around and daydream, they jump right in, take risks and execute their plans. 12. Social Support: Last and definitely not least, successful entrepreneurs count on strong social support from family and friends. Many times, co-founding a business with trusted, like-mind partners makes the difference between an entrepreneur and a ‘want-to-preneur’! Radhika Punshi and David Jones are co-founders of The Talent Enterprise.

(7 million)

SOURCE: Symantec Internet Security Threat Report Volume 20

Compiled by Mark van Dijk 7

PERSPECTIVE

SME financing: What more needs to be done? While there are a host of initiatives to catalyse the development of small and medium enterprises (SMEs), financing them needs more attention. One area of focus is to broaden the uptake of the Al Dhameen programme that is spearheaded by Qatar Development Bank (QDB), writes Oliver Cornock.

Oliver Cornock is the regional editor, Middle East, of Oxford Business Group.

ften the unsung heroes of the Qatari economy, SMEs currently account for around 80 percent of all companies registered in the state. Helping develop them also means facilitating expansion of the wider economy, particularly in the non-oil and gas sector. A range of government-backed bodies and programmes, such as those offered by QDB, which now includes Enterprise Qatar (EQ), the Qatar Business Incubation Centre, the Silatech initiative and the Social Development Centre (SDC), are all working to help local SMEs. Meanwhile, a series of special economic zones, targeted specifically at SMEs, is also being developed around Doha. One area, though, in which more work may need to be done, is that of financing. This has long been a particularly problematic area for many SMEs. Often these companies are family businesses unused to formal bookkeeping and business plans. They may also lack credit history or experience in approaching banks and other financial institutions when seeking loans, preferring family, friends and even unregistered lenders to fund their activities. This necessarily limits the scope of their ambitions. In the current, more straightened climate of continued global economic slowdown, finance can be even more difficult to find, with lenders more risk conscious and unknown SMEs less likely to be received well. Indeed, recent reports from the United Arab Emirates show that a major credit squeeze is currently impacting the sector there. A recent report by the Arab-EU Business Facilitation Group also showed that SMEs took just 0.5 percent of total lending in Qatar in 2013, a figure below the

Gulf Cooperation Council average. Qatar does run several programmes to help SMEs in this regard though. QDB’s Al Dhameen programme connects SMEs with partner banks to offer loan guarantees of up to 85 percent of the project’s value, while SDC runs Rasameel, which gives zero-interest loans of up to QAR250,000 to Qatari nationals. EQ has also launched a private equity fund to help finance SME development. Al Dhameen has certainly proved popular, too, with Commercial Bank, QIIB and QNB announcing earlier this year that they had signed up to a new portfolio of offerings under the scheme. From its launch in 2010 to early 2015, Al Dhameen has provided around QAR573 million in bank guarantees to some 212 SMEs. Expanding the take-up of Al Dhameen and other such programmes is now a major focus. In this, the new portfolio risk package being offered under the scheme recognises and attempts to tackle some of the past challenges. The package allows, for example, partner banks to assess the viability of loans without recourse to the QDB, thus speeding up the process. However, this requires the setting of more clearly defined criteria, however – not only in determining what constitutes a bankable idea, but also overall credit worthiness, and even what constitutes an SME, which has long been unclear in Qatar. And, given the current economic climate, such programmes will likely provide an even more crucial lifeline to many SMEs. If the sector is to continue developing, there will need to be an ongoing commitment to fund such schemes, despite short-term ups and downs in the economy.

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PERSPECTIVE

Attracting talent for SMEs

It is only fair to say that the past year has been a strong one for small and medium enterprises (SMEs) in the Middle East. According to the Middle East Job Index Survey released by Bayt.com in August 2015, 60 percent of SMEs across the region indicated their intention to hire new employees in the next three months, while 80 percent said they will most probably hire talent within a yearâ&#x20AC;&#x2122;s time, writes Lama Ataya.

rrespective of how profitable they are, SMEs always seem to be in a challenging position when it comes to hiring top talent. Actually, simply hiring talent can be tricky for smaller, already-stretched companies who are competing against bigger ones. One way out for SMEs is to find costeffective ways to hire talent when they do not have substantial budgets. So, as an SME, how can you approach recruitment effectively and efficiently? The hiring process is not an easy one! It is always an exhilarating feeling when you realise that you have found the perfect candidate for your SME. However, before you start celebrating, the last and sometimes trickiest hurdle to pass is, in fact, salary negotiation. Salary negotiation means getting the candidate to agree on a figure that is within your budget. Here is a checklist that might help you carry out a successful salary negotiation with a candidate and convince them to accept your job offer. 1. Set expectations from the beginning: Try to be as clear in your job description as possible, and mention the target figure so that the candidate has a clear understanding of what the company expects. With these key deliverables and targets clearly mentioned, the candidate would have a general idea of the salary figure even before you approach the subject. 2. Decide on a salary range in advance: Determine the salary range and know your

Lama Ataya heads the marketing department at Bayt.com

The last and sometimes trickiest hurdle to pass is, in fact, salary negotiation, which means getting the candidate to agree on a figure that is within your budget.

negotiation limits. When setting the salary range, consider your internal salary levels, market salary for similar positions, the state of the job market, and the profitability of your company. 3. Be armed with other benefits: Even if your basic salary figure is non-negotiable, seasoned candidates will negotiate with you in other areas that may be negotiable. These include benefits, bonus payout, sales commissions, car allowance, paid cellphone, and relocation expenses, etcetera. Explain the career growth plan clearly to the candidate and let them know how much they will be making in bonus pay and overtime as they progress. 4. Position your company as an employer of choice: Many employees prioritise the work environment and comfort over a salary. Make sure the candidate feels welcomed and at home. Apart from welcoming them during the previous phases of the hiring process, you can introduce them to the team they will be working with and to their manager and colleagues. 5. Know when to let go: Just as there are some candidates that negotiate for valid reasons, some candidates are just not interested enough in the job. At some point, you will need to evaluate the situation and determine whether the candidate will be a good addition to the company or not. You have to remember that if the candidate is not interested in the job itself, they will probably not perform well when hired.

PERSPECTIVE

Establishing the businessacademia link In September 2013, the College of Business and Economics (CBE) at Qatar University launched its Center for Entrepreneurship. This unit in Qatar is working to link academic life with business reality through training, incubation, research and consultation, writes Dr. Mahmoud Abdellatif.

he centre’s services are not limited to CBE or Qatar University (QU) students, alumni and staff, but they extend to cover private sectors, business communities, associations and government agencies. It serves all colleges of Qatar University through organising joint events and activities and running contests to create awareness about the importance of entrepreneurship, and delivering specific training programmes to develop students’ and faculty members’ skills to become potential entrepreneurs. Furthermore, the centre supports our students and QU community to develop their own business ideas, and transform them into good business plans, which they can then bring to reality through the business incubation unit. In this context, the centre delivers a pre-incubation training programme to select good business ideas to be incubated. Furthermore, there are a number of incubation services which are provided by the centre, such as one-to-one coaching, preparing feasibility studies, and financial plans, etcetera. Academic research is an integral part of the centre’s activities. In this context, the centre is keen to benefit from the efforts of CBE, faculty members through carrying out specific research projects which cover various

The Center for Entrepreneurship delivers pre-incubation training programme to select good business ideas to be incubated.

issues related to entrepreneurial activities and small and medium enterprises (SMEs) in Qatar, the Gulf Cooperation Council (GCC) region and globally. This will strengthen the role of CBE and QU worldwide, and make our research activities more productive. The centre collaborates with external stakeholders such as Qatar Development Bank, Bedaya Center, Ministry of Information and Communication Technology and many others. For example, it provided the training for Qatar’s biggest business competition called Al Fikra, participated in Global Entrepreneurship Week in 2014, and supported students in various business competitions. The mission is to support students and the QU community to develop business ideas and transform them into viable start-ups. The services are tailored to QU students, alumni and staff, and also extend to the private sector, business communities, associations and government agencies. Recently, the centre organised its first international conference on Access to Financing SMEs and Entrepreneurs in the Arab World under the patronage of HE Shiekh Abdullah bin Soud Al Thani, governor of Qatar Central Bank, at the CBE. The event was jointly organised with Qatar Development Bank and the CBE. The conference’s aim was

Dr. Mahmoud Abdellatif is the director of the Center for Entrepreneurship, College of Business and Economics, Qatar University.

to stimulate the research in financing SMEs and entrepreneurship, learning from the experiences of other countries, developing the network between financial professionals, and academia and providing policy recommendations to government officials. Discussions were held on equity finance for SMEs, finance from bank, debt versus equity, and GCC and Qatar experiences. The keynote speaker of the conference was Datuk Mohamed Yonus, group manager of SMEs Bank of Malaysia who explained the experience of his institution in facilitating access to finance for SMEs. On the other hand, there were 14 speakers from Egypt, Jordan, Kuwait, Qatar, and the United States. Recommendation from the conference will be discussed with policy makers in Qatar in order to find proper measures for implementation.

SME INSIGHT

Showcasing successful entrepreneurs helps start-ups Khalifa Saleh Al Haroon is the CEO and founder of Haroon United Group and iLoveQatar Network. In an exclusive conversation with The Edge SME Impact, he speaks about his entrepreneurial experience and what more needs to be done to ensure that young Qataris pursue entrepreneurship as a career. By Aparajita Mukherjee. “Creating something like Silicon Valley here in Qatar is not simply a case of selecting and allotting a piece of land and giving it a name. What makes places such as Silicon Valley special is the atmosphere, the people,” says Khalifa Saleh Al Haroon, CEO and founder of Haroon United Group and iLoveQatar Network

With a pronounced mindset where young Qataris are more likely to join the public sector for more job security and better pay, why do some people – like yourself – want to venture out on their own? What could be done to encourage more of a similar attitude in the local population? I have a number of motivating factors. My father is a well-known person in Qatar, and growing up, I always wanted to reach the same heights that he did. Seeing how hard he worked to take care of and raise our family was inspirational. As a Qatari, I always wanted to demonstrate to the world that we were not just importers, but could also export unique brands, create amazing products and build international organisations. Put simply, I want to change the world. I want to leave behind a legacy, something that my family and Qatar can be proud of. With regard to why young Qataris are more likely to join the public sector that can be attributed to the fact that most people would love to have a job where the work is not necessarily very intensive, the salary is good, the work hours are not long, and to top it all, it is a stable environment. For many, just being somewhere stable is good enough. For others like myself and the many other ambitious Qataris who want to make a mark, we need a bit of risk in our lives. We want to 14

“For many ambitious Qataris who want to make a mark, we need a bit of risk in our lives. We want to create. We want something more.”

create. We want something more. What we can do to encourage more people to want the same things we do is to showcase more success stories. To give people hope that they too can achieve great things. There are people such as Hani Balan, CEO of Qatar Stars League, who started off as a referree and climbed his way up to be the CEO. There is an amazing new generation of Qataris who are now a part of the Entrepreneurs Organization. There are also a number of different incubators and investment funds to help bring ideas to life. What is needed more

than anything though, is a more businessfriendly environment. Doing business in Qatar can be quite expensive, finding commercial space can be difficult, and running the process to get permits and licences can be tiring.

Do you think the economy of Qatar needs entrepreneurs? The tech sector has been outlined as one possible area, making the country the MENA’s ‘Silicon Valley’, but are aims like this realistic, both in the tech sector and across all other sectors? Or would time and effort be better spent on things such as education or growing existing private sector firms? Every economy in the world needs entrepreneurs and needs small businesses. In the United States (US), for example, a sizeable proportion of employment comes from the small and medium enterprises (SMEs), which mean that entrepreneurs not only contribute to the economy, but also drive thought leadership that leads to invention, innovation and development. Since you mentioned Silicon Valley, it’s always been a dream of mine that Qatar would have its own version. However, Silicon Valley is not something that was necessarily planned from the start – it was a group of ambitious people that co-existed in the same area, which led to its creation. Creating something like that here in Qatar is not simply a case of selecting and allotting

ictQATAR is doing its fair share in incubating entrepreneurs. What more needs to be done, across sectors, to make this more replicable across sectors? There are a number of entrepreneurs that have been incubated by different centres. To be honest, some incubators are better than others. In most cases, people who are incubated need help with setting up their business, creating milestones, and getting advice on how to operate. I have seen that some incubators (whether here or internationally) end up turning the experience into more of a training course, when to be honest, entrepreneurs just want to get on with bringing their idea to life. Part of the growing experience is also to take risks and understand that it is natural to make mistakes. Putting incubation aside, we need to think – what is next for those businesses that want to grow? Is it easy to get investment? Is the process of setting up a business simple enough? Can people find commercial spaces or offices at reasonable costs? How simple is it to find good people? Actually, how easy is it to simply hire people in Qatar? Are there any angel investors or venture capitalists in Qatar? There are some great things happening. I admire the efforts by Qatar Development Bank (QDB) and Qatar Business Incubation Center (QBIC). I appreciate the focus on digitising processes at the Ministry of Economy and Commerce. I think people, who are driven and want to bring their ideas to life as fast as possible, do get frustrated with the speed with which things get done which can be addressed with digitisation.

What is your opinion of the role that QDB plays in assisting entrepreneurs to go on their own? Are they doing enough? What are they and other organisations doing right or wrong? What exactly do you think they should be doing that they are currently not doing? QDB is a very unique institution in the world.

Not only are they a bank that has general services like every other bank (such as providing loans), but they also are responsible for QBIC and Enterprise Qatar. This means that they are almost a full-fledged entrepreneurial centre, a place where you can get incubation, loan, investment (in exchange for equity), and potentially even introduction to the right people. Quite recently they had organised a special session between an organisation that focused on connecting investors with successful startups in order to grow their businesses. The initiative did not stop there, they also invited members from the Entrepreneurs Organization in Qatar and other investors to be a part of the conversation. They are also probably one of the most transparent. On social media, their CEO had done an AMA (Ask me anything), where he let anyone ask any question they wanted and he would answer them on the spot. That was a very progressive step. Are they doing enough? I would say that there is always more that could be done, such as leading the discussion with the Ministry of Economy and Commerce, and helping to conduct studies on how easy it is to set up a business here.

“I would say that there is always more that could be done, such as leading the discussion with the Ministry of Economy and Commerce and helping to conduct studies on how easy it is to set up a business here.”

Since finance is not an issue here, what really stands in the way of budding local entrepreneurs? That is a myth. Finance is an issue. Can you let me know of any venture capitalist or angel investors in Qatar? Do you know of any advanced accelerators? When setting up the iLoveQatar network for example, before it became the biggest digital network of websites in the country, no bank would give me a loan, and no incubator would provide me with any funding. Of course, I did not let that deter me and spent every riyal I had into bringing the project to life, but funding was definitely not easy to come by. Have you heard of businesses in Qatar selling or being acquired? You do not really hear those stories that often. How many brands have gone international? What is the basic cost of setting up a business in Qatar? One needs QAR200,000 of capital, you must have an office that would cost around QAR30,000 (if in West Bay) per month for office space. You then need to cover licences and permits which works out to around QAR10,000, if we assume you need to hire four people. What Qatar does have are passionate people, people who see that there is so much opportunity in the country. My biggest concern

is that if these passionate people do not get the results they want, or if they constantly hear about the country’s commitment to entrepreneurs but then they go through so much difficulty, then it would be demotivating.

If you were to make any recommendations for the growth of entrepreneurship in Qatar, what would they be? Showcase the successful entrepreneurs and let us talk openly about issues that we are facing because whether you are a start-up or a large business, we are all facing the same problems. Sometimes, as they say, there is comfort in shared misery but we gain hope from witnessing others succeed. 15

SME INSIGHT

a piece of land and giving it a name. What makes places such as Silicon Valley special is the atmosphere, the people. I would love something similar to Katara Cultural Village, but for tech start-ups and I would be the first to move in. With regard to spending time and effort, I am often asked if it is better to spend effort on one thing or the other. I don’t think that we have to choose. These projects need to work in tandem.

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Qatar Shell Supports Private Sector Growth in Partnership with Qatar Development Bank Initiative that provides business opportunities for Qatari SMEs growing from strength to strength Why has Qatar Shell partnered with Qatar Development Bank? ‘Qatari SME Business Opportunities’ initiative, delivered by Qatar Development Bank (QDB) and Qatar Shell, is one of Qatar Shell’s Corporate Social Responsibility partnerships aimed at delivering sustainable impact in support of the Qatar National Vision 2030. As part of a nationwide strategy to support Qatari small to medium-sized enterprises (SMEs) Qatar Shell partnered with QDB to promote and accelerate the development of the private sector in Qatar. The purpose of the agreement, signed in 2013, is to provide Qatari SMEs with access to business opportunities at the Pearl GTL plant, the largest Gas to Liquids plant delivered by Qatar Petroleum and Qatar Shell. Through its support of local SMEs, Qatar Shell aims to contribute significantly to the economic pillar of the Qatar National Vision 2030. How do the business opportunities offered by Qatar Shell aim to positively impact the private sector? Through this strategic partnership, Qatar Shell and QDB are promoting the diversification of the national economy by nurturing the growth of the private sector through the support of local entrepreneurs and SMEs. Following the launch of the first ‘Qatari SME Business Opportunities Workshop’ in 2013, three local SMEs were awarded with contracts; and in 2014 five new local companies were added to Qatar Shell’s supply chain. This year, we have offered seven new business opportunities at an estimated aggregate value of more than QR 15 million. Additionally, this year, Qatar Shell and QDB won the Social Development Center’s Reyada ‘Outstanding Entrepreneurial Support’ Award for their role in developing Qatari entrepreneurs and small and medium enterprises. The award is a clear demonstration of this successful partnership in developing Qatar’s economy and private sector, as well as delivering sustainable contributions to positively impact Qatar. Qatar Shell remains confident in the quality and the capability of local suppliers in the market, which will add value to its operations in Qatar. Through QDB mentorship and support, and by providing local SMEs with access to specific business opportunities within Qatar Shell’s supply chain, we are helping them raise their operating standards in order to fulfil global requirements. What are the business opportunities being offered this year and which SMEs have been awarded? More than 150 Qatari SMEs attended the third annual ‘Qatari SME Business Opportunities Workshop’ earlier this year, where over 60 local SMEs showed their interest to participate

and compete for the seven business opportunities on offer. Shortlisted SMEs then tendered for the following business opportunities - the manufacturing of safety boards and electric labels; cafeteria and catering services for staff and events; servicing of custody flow meter calibration; manufacturing of stud bolts; supplying onsite welding inspection services; manufacturing and maintaining fire extinguishers, and managing Qatar Shell’s social media. The successful SMEs will be awarded with contracts in a special ceremony on 13th December.

Qatar Shell and Bedaya – Committed to Nurturing Entrepreneurship Enterprise Challenge Qatar aims to nurture entrepreneurial skills among the youth Why has Qatar Shell partnered with Bedaya? ‘Enterprise Challenge Qatar’, delivered by Bedaya and Qatar Shell, is one of Qatar Shell’s Corporate Social Responsibility partnerships aimed at delivering sustainable impact in support of the Qatar National Vision 2030. Qatar Shell recognises that cultivating entrepreneurship begins by investing in young minds. By helping to increase the number of young Qataris aspiring to become entrepreneurs, the ‘Enterprise Challenge Qatar’ is contributing to both the human and economic pillars of the Qatar National Vision 2030.

How does Enterprise Challenge Qatar aim to nurture entrepreneurship among Qatar’s youth? ‘Enterprise Challenge Qatar’ is a programme that encourages young Qataris to become entrepreneurs by enhancing their business knowledge and equipping them with valuable business skills such as team work and strategic thinking. The ‘Enterprise Challenge Qatar’ programme has tiers for high school and university students, and comprises two parts; the Ethical Business Challenges - which tests participants’ ability to balance the economic, environmental, and social performance of their company; and the Business Simulation element - which familiarises students with business inception, trading, finance, sales,

marketing and production. The competition culminates in two Grand Finals that see both university and schools teams compete online to achieve a winning score by demonstrating the best business skills. How does Enterprise Challenge Qatar positively impact the community? Since its inauguration in 2012, ‘The Enterprise Challenge Qatar’ has continued to grow year on year. So far the programme has engaged more than 1,200 students from schools and universities across Qatar. In 2014, 700 students from 14 schools and nine universities across Qatar participated in the programme. More than 120 mentors, the majority of whom are Qataris, volunteered their valuable time to coach the students in 2014. Enterprise Challenge Qatar received special praise and recognition during the ‘UK Mentor of the Year Awards’ hosted by His Royal Highness, The Prince of Wales at the Sandringham Palace in the United Kingdom, in 2014. In 2015, Qatar Shell and Bedaya won SDC’s Reyada ‘Outstanding Entrepreneurial Support’ Award for their support to Qatari entrepreneurs and small and medium enterprises, including through ‘The Enterprise Challenge Qatar’. The ‘Enterprise Challenge Qatar’ 2015 programme has reached over 1200 students. This year the annual challenge has expanded and aims to reach all universities across Qatar.

SME INSIGHT

Entrepreneurship brings investment to the country and makes it self sufficient In an exclusive interview with The Edge SME Impact, Stefan Lindberg-Jones, managing director of media production company Ginger Camel, gives his take on the entrepreneurial climate of Qatar and what can be done to improve it. With a pronounced mindset where young Qataris are more likely to join the public sector for more job security and better pay, what do you think could be done to encourage more young people to take up entrepreneurship as a viable career option? Some people like to feel secure and not rock the boat of life if they can avoid it. There are also some people who want to step out of their comfort zone, experience something new and go on an adventure in life. The latter are the people who are generally entrepreneurs. This can be anyone at any age. For me, it was like an inner calling that I had never listened to until my mid-30s. To encourage the local population to step out of their comfort zone, in my opinion, one needs to have certain role models from the community/family showcasing their experiences and highlighting the satisfaction that one gets by starting and running one’s own company. It also highlights the rewards you can gain in life by pushing yourself and stepping outside the box. I feel the older generation that succeeded in building their companies from scratch have a duty to share their knowledge. Not just to their immediate family but to the community as a whole.

Do you think the economy of Qatar needs entrepreneurs? would time and effort be better spent on things like education or growing existing private sector firms? Qatar’s economy needs entrepreneurs for sure. It would help the economy and make it less reliant on the oil and gas industry. Entrepreneurship brings investment to the country from abroad and builds industries that will eventually make the country self 18

“I feel the older generation that succeeded in building their companies from scratch have a duty to share their knowledge. Not just to their immediate family but to the community as a whole,” says Stefan Lindberg-Jones, managing director of Ginger Camel.

“My recommendation for the growth of entrepreneurship in Qatar is to have some sort of national service for all college graduates who could have a year learning all about starting and running their own business.” sufficient in certain sectors and also increase the export trade. This will result in a homegrown pride and ambition within the country itself.

ictQATAR is doing its fair share in incubating entrepreneurs. What more needs to be done to make this more replicable across sectors? ictQATAR’s Digital Incubation Centre is doing a great job in helping entrepreneurs and start-up companies. It is developing its services along the way as it explores what works and does not work. This knowledge should be shared amongst all such incubation centres and facilitating bodies that are there to help entrepreneurs and start-ups.

Since finance is not an issue here, what really stands in the way of budding local entrepreneurs? Local entrepreneurs and start-ups come up against the same problems time after time. Finding small office space at a reasonable rental price is a huge problem. Sponsorship and employment laws need to be relaxed to allow talent to be hired from abroad and locally.

What are your recommendations for the growth of entrepreneurship in Qatar, what would they be? Education plays an important role in Qatar’s development, and also supports Qatar National Vision 2030. My recommendation for the growth of entrepreneurship in Qatar is to have some sort of national service for all college graduates. Graduates could have a year learning all about starting and running their own business. After serving that year, I predict that the number of graduates wanting to go into the public sector would drop considerably.

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FEATURE STORY Panelists representing Qatar’s e-commerce start-ups to discuss prospects and challenges of doing business here.

Driving Qatar’s SME matrix through e-commerce The growth potential of Qatar’s QAR3.71-billion e-commerce market is well documented, but the sector still faces a number of challenges – something that was discussed during Qatar’s e-Commerce Forum held in Doha. By Aparajita Mukherjee, with reporting by Syed Ameen Kader.

atar’s e-Commerce Forum 2015 held recently brought together businesses, policy makers and e-commerce service providers to address some of those challenges, and discuss new trends and developments in the global and Qatari e-commerce markets. Organised by ictQATAR, the event saw a large participation from e-commerce industry stakeholders, including representatives from Google, PayPal, PayFort, Qatar Development Bank, Doha Bank, Visa, Uber Technologies, Ooredoo, Aramex International and Q-Post. The event also released the Qatar National e-Commerce Roadmap 2015, which states, “In 2014, Qatar’s business-to-consumer market reached just over USD1 billion, making Qatar the seventh largest market in the Middle East and North Africa (MENA) region, with significant opportunity for growth and improvement. Qatar already has many of the key ingredients conducive to a favourable e-commerce environment – a population with high levels of disposable income, a strong and secure ICT infrastructure, and a highly connected society. In fact, Qatar has the potential to double its forecasted e-commerce market size by leveraging its large investments in both ICT and logistics as well as the growth in its SME sector. Government interventions and coordination are required to realise this potential

FEATURE STORY

In 2014, Qatar’s business-toconsumer market reached just over USD1 billion, making Qatar the seventh largest market in the MENA region, with significant opportunity for growth and improvement. HE Dr. Hessa Al Jaber, Minister of Communications and Information Technology, confirmed that the e-commerce market in Qatar is growing at a rate of 10 percent, which is higher than the global average.

and enable a robust e-commerce ecosystem.” HE Dr. Hessa Al Jaber, Minister of Communications and Information Technology, confirmed that the e-commerce market in Qatar is growing at a rate of 10 percent, which is higher than the global average. Dr. Al Jaber added, “The government is planning to take several measures, including opening up the postal service for competition, to boost the e-commerce market.” Al Jaber explained that the government has put a policy in place to liberalise the postal delivery by making suitable amendments to the Postal Law and opening up the service to other private companies in Qatar’s logistic sector. Other measures to stimulate e-commerce activity in Qatar, Dr. Al Jaber discussed, included enabling merchants, consumers, start-ups and e-commerce service providers to better service the market, and enforcing an e-transactions law. “We found that a number of inhibitors are impeding the development of a robust e-commerce ecosystem in Qatar. We are working to overcome some of those inhibitors,” continued Dr. Al Jaber. Moayed Siddiq, governance engagement specialist in the Digital Industry Development Department, ictQATAR, said, “The e-commerce forum really serves two purposes. First of all, it marks the end of the e-commerce roadmap project in which ictQatar has spent several months looking at various issues such as payments, and logistics, etcetera. And it’s a kind of announcing some of the solutions that ictQatar has come up with, and some of the steps that the ministry is taking to help

Snapshot of the Qatar e-Commerce Market Qatar is currently the 7th largest B2C Market in MENA, with tremendous uplift potential.

Segments

Market Size

Channels

22%

USD1.02 bn

Travel

2014

11%

Content

18%

Electronics

15%

Fashion

10%

Entertainment

20%

Mobile

80%

Hotels

Computer

Average transaction value

Sport

Market Size

Population 2.13 mn

Auto

Household

Waiting Time

8.8 Days

Payments

19%

Credit Cards

USD260

Per transaction

75% COD

PayPal e-Buyers 0.3 mn

Source: Qatar National e-Commerce Roadmap

FEATURE STORY

Qatar’s Average e-Commerce Spend e-Commerce Spend per User Per Year (2014) Country; (USD) Qatar

Average Value Per Transaction Country; (USD) 3.453

Kuwait

2.205

KSA

533

UAE

245 229

KSA

977

Egypt

264

Kuwait

1.069

UAE

Qatar

72%

Jordan

215 132

GCC 238

MENA Average 334 Sources: Qatar National e-Commerce Roadmap

USD

billion:

Size of Qatar’s business-to-consumer market in 2014.

solve these problems with all the other relevant government bodies and private sector entities.” He said it is the beginning of a dialogue between a number of different entities working in e-commerce in Qatar. “A lot of work happening with e-commerce in the country is in isolated silos. So the event is bringing people together to create a community, and moving forward, if we do have any issues, we can work together,” Siddiq added. Siddiq also mentioned that the work that ictQATAR is doing with other ministries for developing the consumer potential framework for online consumers will go a long way to aid in assuring online customers of protection. Commenting on the liberalisation of the postal services that was announced by Dr. Al Jaber, Siddiq said, “This will allow local entities to compete with the likes of Q-Post ,which is going to be huge because when you create competition, you create development and innovation. If it is a monopoly, most of the time, there is market stagnation.” Siddiq continued that with the new

liberalisation announcements, the local market will see new companies such as Pick & Drop, which will introduce the market to competition. “Invariably with competition, one can expect better service, lower prices,” said Siddiq.

Challenges In a market where 80 percent of online transactions are still done through a cash-on-delivery model, one bottleneck Qatar’s e-commerce industry faces is the limited number of e-payment service providers in the country. However, Qatar is addressing this issue by allowing more payment service providers to get into the market. PayFort, for instance, chose this occasion to announce their entry into the Qatari market. The Dubai-based payment service provider will start its operation shortly, the company’s CEO Omar Soudodi told The Edge SME Impact. “We are going to issue a formal press release soon.” “There is a lot of interest for Qatar, both from regional and global companies. We have a lot of international brands that we support in the United Arab Emirates, Egypt and Saudi Arabia, and they have

Q&A with

FEATURE STORY

The Edge SME Impact, in exclusive conversation with the owners of two start-ups at Qatar’s e-Commerce Forum.

Q&A with

Ahmad Nasser Al kuwari, owner of Pick & Drop Delivery Service – a B2C company

Mohammed Jassim Al Kuwari, founder and CEO of LaTehati – a B2C company

Why did you start this company?

Why did you launch this company?

In Qatar, there is no logistics company which delivers merchandise to people. We saw this gap and we tried to address it. It was hard though. We had to do a lot of paperwork through the Ministry of Economy and Commerce and the Ministry of Transport.

LaTehati literally means ‘don’t worry’. Operationally, it means that, as a company, we can bring any product that we mention as part of our website, or we can add a product to our offering. We can add and collaborate with anyone who wants to collaborate with us. We give the freedom to the collaborator to price his/her own products. We can then deliver the product as per the customer’s location and time.

“In Qatar, there is no logistic company which delivers merchandise to people. We saw this gap and we tried to address it,” says Ahmad Nasser Alkuwari, owner of Pick & Drop Delivery Service – a B2C company.

What other challenges did you face? While doing the paperwork, we realised that there was no relevant section since the ministries do not consider trade with e-companies separately. They treat it like a normal business, a brick and mortar business. In their books, the description of the field was delivery of consumable items.

Tell us about the operational aspects of Pick & Drop Delivery Service. We have our own fleet – we currently have six cars, two buses and a couple of four-wheelers. We are a B2C company that collects the merchandise, then sorts it according to delivery destinations, and distributes it based on an agreement between an online provider and us.

What hurdles do you foresee for expanding your operations? We need to increase our fleet size and that will involve cost. At this stage, we are trying to get funding from Qatar Development Bank.

Take us through the cultural nuances of your business. Familiarity with the local Qatari culture is an important success factor of our business. Many of our customers are women and they are not very comfortable with a delivery person reaching their home. They feel that the location of their house is something personal and private. We ask them to either give us their exact location or the geo location through Whatsapp. They usually tend to opt for the latter.

“The concept of service charge goes well with the local culture, unlike an unexplained add-on,” says Mohammed Jassim Al Kuwari, founder and CEO of LaTehati – a B2C company.

Explain your pricing strategy. Customers in Qatar do not like price add-on. If a product is priced at say QAR500, when we deliver, we charge the same amount, but we add a service charge which depends on the sales price and the distance. The concept of service charge goes well with the local culture, unlike an unexplained add-on.

How do you collect payments from clients? After a client receives the item, we provide him with an electronic invoice against which we collect the payment, after having paid the provider ourselves.

What are the future plans for your company? What is your target? In the future, I want to expand the business from the current B2C model to a B2B one. We hope to make this transition with more B2B collaborations to ensure that it will be more effective from a business point of view. At the end of the day, the degree of success of our collaboration with these companies will reflect on our services with the customer.

For a company such as Amazon, which has customers everywhere, if they are open to delivering through LaTehati, can you do it? Yes, if we can arrive at a partnership with Amazon, we can do it. The business model would change slightly then, and we would look at billing both on delivery and online shopping. 23

FEATURE STORY

all expressed interest in entering the Qatari market. For us, it makes complete sense to come and launch in Qatar,” said Soudodi. Another issue pertains to the reluctance of the local population to do online payments. Instead, most people prefer cash on delivery. Analysing the reasons behind this reluctance, Ahmad Nasser Ahmad Alkuwari, owner of Pick & Drop Delivery Service, said, “Because there’s no trust as yet, we are trying to build this trust. As soon as it is there, we can establish an online payment service.” Commenting on the trust deficit in the regional markets, Soudodi added that the issue of trust can be best addressed by establishing a close

relationship between the payment service and the merchants who enlist the services of these companies. Detailing the process that the payment service can utilise, Soudodi said, “First of all, we look at the terms and conditions, and we help the merchant in making sure the terms and conditions are clear for them. We work on the refund policy, the cancellation policy.” He furthered, “We work on the compliance issue with the consumer protection laws in the country that a company is serving. Do you have clear process in terms of filing a claim? Do you have contact details that people can call you? We work equally diligently with all the companies, big and small, on simplifying and making the terms

and conditions clear and concise so the users understand exactly what they are getting into.” Talking about the Qatar market, Soudodi categorised it as ‘very promising’, adding, “I think Qatar in the next few years will see a big uptake, not only in online international transactions, but also in local transactions. I think there will be a drive by multiple services that we are using on demand. Our region is growing 45 percent versus 20 percent in the Europe and 15 percent in the United States, so we are looking at that trend to continue to grow for the next few years as well.”

Moayed Siddiq, governance engagement specialist, Digital Industry Development Department, ictQATAR, says, “A lot of work happening with e-commerce in the country is in isolated silos. So the event is bringing people together to create a community, and moving forward, if we do have any issues, we can work together.”

“We found that a number of inhibitors are impeding the development of a robust e-commerce ecosystem in Qatar. We are working to overcome some of those inhibitors.” – HE Dr. Hessa Al Jaber, Minister of Communications and Information Technology. 24

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FEATURE STORY

ictQATARâ&#x20AC;&#x2122;s Digital Incubation Center: Catalysing entrepreneurship The Digital Incubation Center (DIC) was set up to boost ICT innovation in Qatar, particularly among young people at the critical early stages of starting or growing a technology-related business. The Edge SME Impact spoke to entrepreneurs who have used the DIC to transform their innovative ideas into viable businesses. By Aparajita Mukherjee.

FEATURE STORY

There are two tracks to choose from at the DIC: the Idea stage programme (a six-month track that supports innovators in developing and ultimately turning their ideas into viable products or prototypes), and the Start-up track (a two-year programme that supports potential entrepreneurs and early-stage tech start-ups that have a market-ready product or prototype).

he DIC provides incubation programmes that can nurture and help grow new businesses by offering expertise, professional guidance, and services – including access to space, business planning, education and training, and legal advice, among others – throughout the phases of the start-up development. At the time of the launch of the DIC, they invited entrepreneurs who were capable of harnessing emerging technologies to create innovative products, solutions or services that will contribute to Qatar’s digital economy. “We are particularly interested in entrepreneurs who are working with emerging technologies – such as smart city solutions and applications, cloud computing, Internet of Things, drones or robotics, Machine-to-Machine (M2M), big data and analytics, predictive analysis, cyber security, mobility and wearable solutions; e-commerce; and telecommunications services,” stated the offer document when the DIC was set up in 2011. There are two tracks to choose from: the Idea stage programme (a six-month track that supports innovators in developing and ultimately turning their ideas into viable products or prototypes), and the Start-up track (a two-year programme that supports potential entrepreneurs and early-stage tech start-ups that have a marketready product or prototype). The Edge SME Impact spoke to the DIC’s start-ups on their experience and how they see the road forward.

Multifacted focus There are various categories of industries at the DIC. For instance, iRiskCorp is a technology company that provides comprehensive travel technology and consulting services to a wide spectrum of organisations. 27

FEATURE STORY To Dr. Aiman Erbad of Riyada Trading, the DIC allows “a number of like-minded individuals to develop ICT start-ups”, in addition to support services such as legal services (through Dentons) and accounting services (through KPMG).

Mufeed Ahmed of Evently, a mobile app which caters to Qatar residents by providing them updated information about events, exhibitions and exhibitions, told The Edge SME Impact, “Launched a year back, Evently has been downloaded more than 13,000 times with more than 600 events featured in the past 12 months.” Another start-up, ShababFalcon, is a fashion e-commerce start-up based out of the DIC. Meddy, run by Haris Aghadi, is an online platform that aims to help people find the best doctors in Qatar, based on patient reviews and credentials. “Our industry is the healthcare marketplace,” says Aghadi. Riyada Trading is a Qatari company operating a unique e-commerce platform, QatarBestDeals.com. Commenting on his venture, Dr. Aiman Erbad said, “Our aim is to enhance the e-commerce experience for users in Qatar and the region. We specialise in selling electronics and gifts.” FiTech, owned by Majed Lababidi, is developing a WiFi advertising platform to be part of digital marketing which is happening all over the world. “We focus on delivering a high guarantee to see advertisements whenever an Internet user tries to connect to a free public WiFi network managed by FiTech,” informed Lababidi.

Why the DIC? The DIC assists start-ups for two years. Explaining why he chose it to launch iRiskCorp, Ajith Poduval said that he wanted to “avail of the DIC’s training, development tools, environment and brand association, and to establish a positive reputation so that 28

Ajith Poduval chose the DIC to launch iRiskCorp. Explaining his reasons, Poduval told The Edge SME Impact that he wanted “to avail of DIC’s training, development tools, environment and brand association, and to establish a positive reputation so that we could speed up new product acceptance.”

The DIC encourages start-ups in smart city solutions and applications, cloud computing, Internet of Things, drones or robotics, Machine-to-Machine, big data and analytics, predictive analysis, cyber security, mobility and wearable solutions, e-commerce, and telecommunications services.

Meddy, run by Haris Aghadi, is an online platform to help people find the best doctors in Qatar based on patient reviews and credentials. “Our industry is the healthcare marketplace,” said Aghadi.

we could speed up new product acceptance.” For Ahmed of Evently, DIC provides the right environment to focus on the business and stop worrying about the facilities, legal and accounting issues, etcetera, adding, “It also provides what a start-up needs the most: mentors who can training people like us on best practices.” Aghadi of Meddy mentioned the DIC’s quick decision-making cycle as the most important factor. Citing the other advantages of being part of the DIC, Aghady said, “Office rents in Qatar are ludicrously high, so free office space from ictQATAR cuts down one of the biggest expenses for early stage startups.” Both Ahmed and Aghadi agree that being in the same premises with other startups gives an added advantage of knowledge sharing. “ictQATAR frequently host talks with domain experts and people who have run successful start-ups to give more insights to help us grow their business,” added Aghadi. To Dr. Aiman Erbad of Riyada Trading, the DIC allows “a number of like-minded individuals to develop ICT start-ups”, in addition to support services such as legal services (through Dentons) and accounting services (through KPMG). Erbad added, “Most importantly, we feel the DIC is our family with so many bright people around making it exciting to come here every day and tackle new challenges.”

The future Talking about what lies in the future, Poduval of iRiskCorp said, “During the period, we are hoping to stabilise our position in the market

To Mayouf Rouf of ShababFalcon, two years is the ultimate litmus test for a start-up’s survival. He says, “This period is a good enough time frame to figure out a stable business model that can be scaled for growth.”

and from there we are hoping to run as an independent company. If everything moves as per the business plan, we will stretch our business to the regional level as well.” To Rouf of ShababFalcon, two years is the ultimate litmus test for a start-up’s survival. He added, “This period is a good enough timeframe to figure out a stable business model, that can be scaled for growth.” Erbad of Riyada Trading informed that after the DIC support for two years, companies will be in the launchpad for six months. Commenting on his plans for the company post the two years at the DIC,

Erbad said, “We aim to become one of the key e-commerce businesses locally and regionally. We hope to become financially more stable, and expect to have gained enough funding to see our innovative ideas become realities.” Lababidi of FiTech said, that he hopes to reach out to investors after the initial two years at DIC.

Scope for improvement Suggesting improvements in the scope of services for the DIC, Poduval of iRiskCorp shared two areas: funding/investment

Qatari Idea or Start-up Non Qatari

Product Service Solution

Technologies Big Data Smart Cities Cloud Computing Drones and Robotics Internet of Things M2M e-Commerce Predictive Analytics Infotainment Digital Media

Industries Education Health Sports Retail Transport Construction Finance

Digital Cluster

FEATURE STORY

and “if possible, we would like to get a commercial registration under the Ministry of Information and Communication Technology”. Agreeing with Poduval, Rouf of ShababFalcon told The Edge SME Impact, “The greatest challenge facing the tech start-ups in Qatar, due to their novelty, is access to venture funds. Fostering of a network of venture capital firms or angel investors would be one of the areas that all incubators in the country could work towards.” For Ahmed of Evently, it is important to have more start-up people in the mentorship programmes. He elaborated, “Currently most of the mentors are people who are experts in their field of work in their corporate structure, but they do not necessarily understand a start-up. A director of marketing in a corporate company would have less to contribute as a mentor to a start-up, compared to someone who has a start-up and/or has worked in a start-up.” Lababidi of FiTech said he would prefer someone who could “point out individual weaknesses to each start-up, and handhold them to work on instilling those qualities that will allow them to succeed”.

INTERVIEW

Commenting on Injaz Qatar’s programmes, Emad Al Khaja, executive director of Injaz Qatar, states, “These programmes help students identify businesses they can start and examine the ways that entrepreneurs use to develop their business plan.”

Young entrepreneurs will have wider role in economy

In conversation with The Edge SME Impact, Emad Al Khaja, executive director of Injaz Qatar, speaks about the organisation’s involvement with the youth, and what he feels are prerequisites to developing a more broad-based entrepreneurial culture in the country. By Aparajita Mukherjee. 30

Injaz Qatar inspires and prepares the youth to succeed in a global economy. This also includes training them to build up their own SMEs and start-ups. We promote this sort of activity by introducing different entrepreneurship programmes, including: It’s My Business, Be Entrepreneurial, Company Program, and Innovation Camp. These programmes help students identify businesses they can start and examine the ways that entrepreneurs use to develop their business plan. They are also provided with the unique opportunity of actually establishing and running a real company. The programmes also ensure that students learn several entrepreneurship skills and develop their team-building skills. Throughout the programmes, students are inspired and motivated to challenge themselves to be creative and consider working on an SME or a start-up.

are complete, they seek jobs where they are guaranteed a monthly payment. Once students secure a job, they find it hard to take the risk of starting their own business, especially if they were not originally exposed to the concept of entrepreneurship. It is our role to work on students’ entrepreneurial spirits by delivering motivational programmes.

Given your involvement with a large cross-section of the student community of the country, what do you feel can be done right from childhood for the youth to take entrepreneurship seriously? The concept of entrepreneurship is not something we are naturally familiar with or practise from a very young age, especially in the Arab region. Students only started

Developing people is at the very core of the Qatar National Vision 2030. The spirit of entrepreneurship is supported by this effort to develop human capital. Young entrepreneurs will play an increasingly important role in securing Qatar’s future prosperity, and Injaz Qatar is pleased to be helping prepare the youth for this challenge through our education programmes.

The MENA region is diverse. Every country has its own mindset, and every country has different business opportunities, which broadens the chances or learning from one another. Qatar’s youth and especially our students at Injaz Qatar are always in search of ideas that could be of help and support not only to Qatar, but to the whole MENA region, when they look around and see the gaps that could develop a brilliant start-up, they do not hesitate to think and deliver like entrepreneurs.

Injaz Qatar is committed to supporting the young entrepreneurs to partner in the progress of the nation, and I personally can see this happening already. We have delivered programmes to more than 19,000 students across schools and universities in Qatar, and this is because of the potential we see and believe to be available among the youth of the country. I have also noticed the change of ideas students come up with during our classes. We encourage them to think with an environmentally-friendly mind because they are well aware of the economy being hydrocarbon-driven.

I personally believe that finance is definitely not a constraint in Qatar, and that the youth are inspired and well aware of their role towards the community, but a lack of self motivation might be the obstacle in the way of thriving entrepreneurial spirit. While still in high school, students focus on pursuing a college degree, and when their diplomas

With human capital development a pillar of the Qatar National Vision 2030, do you think this will help develop the spirit of entrepreneurship in the country?

What can Qatar learn from the wider Middle East and North Africa (MENA) region in order to encourage the youth to think like entrepreneurs?

In your opinion, what policy measures are needed to encourage the youth of the country to seriously consider taking up entrepreneurship as a career option, given that the economy is largely hydrocarbon-driven?

With access to finance not a constraint in Qatar, what exactly stands in the way of a thriving entrepreneurial spirit in the country?

getting exposed to experiencing SMEs and start-ups when entrepreneurship was introduced to university courses through university programmes or through Injaz Qatar’s programmes offered by our corporate volunteers. I believe if children grew up in an environment where entrepreneurship is practised in the household, they might develop a sense of responsibility to give back to the community.

Tell us about Injaz’s experience from last year’s entrepreneur trade fair. Is there any chance of replication in the near future?

“The concept of entrepreneurship is not something we are naturally familiar with or practise from a very young age, especially in the Arab region.”

The trade fair was an excellent experience for Injaz Qatar in general and to the students in particular. The participating students from different schools and universities were given the chance to exhibit and present their actual products/services during the fair, which gave them more exposure and succeeded in selling their products/services. We have big plans for next year’s trade fair, which includes collaborating with certain authorities who showed interest to support and be part of the students’ business ideas. 31

INTERVIEW

Talk us through Injaz Qatar’s involvement in promoting small and medium enterprises (SMEs) and start-ups.

INTERVIEW

Family-owned businesses are looking for appropriate corporate governance structures

Family-owned businesses (FOB) in the Gulf Cooperation Council (GCC) represent the majority of registered companies. The active role played by FOBs is deeply rooted in entrepreneurship as they gradually become economic powerhouses, they contribute significantly to non-oil gross domestic product (GDP) throughout the region. Serge Besanger, academic director, Executive Education, Custom Programs, HEC Paris, and Raja Assili, chief operating officer of HEC Paris in Qatar, spoke exclusively to The Edge SME Impact’s Syed Ameen Kader on why they launched a course for FOBs.

Why did HEC Paris decide to launch a course on FOBs? BESANGER: We recognise that FOBs represent 90 percent of the economy for the region and their contribution to GDP is enormous. We also have a very strong experience in designing programmes for FOBs that respect the overarching aspect of family privacy, and we thought there could be a good fit between our experience in designing custom programmes that respect this aspect of family privacy, which I think is even more important in this region than elsewhere. We built that in Europe for many years, having offered it in Paris, and we thought there was a need here to design the curriculum as part of our offerings. The next destination will be the Far East, but our Qatar offering will be the second one.

Tell us about the specifics of the FOB programme. How can students enroll and how does the whole process work? ASSILI: We have customised programmes where we meet a client who discusses the issues his company is facing and asks us to develop a programme specifically to address these issues. This is what we are going to start with in this region because there is an issue of confidentiality. That is our starting point. With such customised programmes, each is different in terms of content and duration and eventually, in about a year’s time, we are going to start introducing some elements of this in our degree courses. 32

“FOBs need to have the right incentive and motivation, which can help avoid a situation wherein the non-family, yet long serving executives start developing visions that clash with those of the owners,” Serge Besanger, academic director, Executive Education, Custom Programs, HEC Paris, tells The Edge SME Impact.

INTERVIEW

“We found that there is also a need for establishing clear guidelines to segregate the family office and the corporate structure.”

“We have customised programmes where we meet a client who discusses the issues his company is facing and asks us to develop a programme specifically to address these issues,” Raja Assili, chief operating officer, HEC Paris in Qatar, tells The Edge SME Impact.

Why do you think it is important for Qatari FOBs to opt for such a course? BESANGER: They are looking for the right type of corporate governance structure, in our assessment. Some of them hesitate because they may have structures that either harm growth or impede innovation or agility. Others may have structures that prioritise this at the expense of controls. In both scenarios, HEC Paris will help them design the proper corporate governance structures. We found that there is also a need for establishing clear guidelines to segregate the family office and the corporate structure. Very often this relationship is unclear, and there is a risky relationship between the two. The other issue is that, in some cases, we have found that the advisors to the owners do not challenge or question the owners enough and they become ‘yes men’ over time. An appropriate corporate governance structure will establish mechanisms for controlling this. Another important issue in this region is for FOBs to have the right incentive and motivation, which can help avoid a situation wherein the non-family yet long serving executives start developing visions that clash with those of the owners. This is a very important factor to consider. FOBs need succession planning. We were

thinking of Islamic law, which can help to some extent to reduce conflicts.

FOBs have started becoming relatively corporatised in their hiring practices and periodic restructuring of their businesses. Is it feasible to a family to take a course covering a huge process like restructuring? BESANGER: Our idea is to give them some tools. We will have courses on business re-engineering, on innovation and disruptions. There are a lot of questions about disruptions which could stem from technological factors or operational when a disruption occurs to business models. So we have a course entitled Disruptive Business Models which is about analysing the risk and how to mitigate that.

Structurally, Qatari FOBs are expanding, which means they are also adjusting the managerial aspects related to expansion. Do you think that the launch of your course synchronises with their expansion phase? How, in your view, should FOBs approach transition? BESANGER: There is a need to expand international operations; so we will have also a course on expanding international operations, allied to which is the need to develop an apt governance structure so that they are prepared to meet challenges of both geographical and size expansions. We propose various templates and we will have case studies which we are developing with the help of Qatar Foundation. Currently, we have two case studies on FOBs and are working on a third . There may be others.

Do you foresee obstacles or challenges in selling this to the older generation as opposed to the younger people? BESANGER: The key to selling these customised programmes is to strike the right balance between traditional and modern management. A lot of these companies in the region here have been successful because they have been run in a traditional manner, because they have stuck to their family values; which has put a premium on intangibles such as reputation, and loyalty. In our view, these things are not to be touched since these are the assets of those companies. But at the same time, one needs to blend these values with modern management techniques; and this is where HEC Paris can come in and help them inject modern management techniques to help them deal with the challenges of expansion and diversification. 33

Green SMEs: Prospects and challenges

special feature

With â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; being the buzzword across all industries, greening of the business sector and development of green skills has assumed greater importance in the Middle East. Around the world, small and medium enterprises (SMEs), start-ups and entrepreneurs are playing a vital role in the transition to a low-carbon economy by developing new green business models for different industrial sectors. In fact, young and small firms are emerging as main drivers of radical ecoinnovation in the industrial and services sectors, writes Salman Zafar.

he Economic and Social Commission for Western Asia (ESCWA) defines green SMEs as those that adopt green processes and/or those producing green goods using green production inputs. A judicious exploitation of techno-commercial opportunities and redevelopment of business models, often neglected by established companies, have been the major hallmarks of green SMEs. For example, SMEs operating in eco-design, green architecture, renewable energy, energy efficiency and sustainability are spearheading the transition to green economy across a wide range of industries. The path to green economy is achieved by making use of production, technology and management practices of green SMEs.

Key drivers The key motivations for a green entrepreneur are to exploit the market opportunity and to promote environmental sustainability. A green business helps in the implementation of innovative solutions, competes with established markets, and creates new market niches. Green entrepreneurs are role models

for one and all as they combine environmental performance with market targets and profit outcomes, thus contributing to the expansion of green markets. Some of the popular areas in which small green businesses have been historically successful are renewable energy production (solar, wind and biomass), smart metering, building retrofitting, hybrid cars and waste recycling. As far as established green industries (such as waste management and wastewater treatment) are concerned, large companies tend to dominate, but SMEs and start-ups can make a mark if they can introduce innovative processes and systems. Eco-friendly transformation of existing practices is another attractive pathway for SMEs to participate in the green economy.

Major challenges The green SME sector in the Gulf Cooperation Council has been growing steadily, albeit at a slower pace than anticipated. One of the major obstacles has been poorly-designed regulation. According to Ruba A. Al Zuâ&#x20AC;&#x2122;bi, a renowned sustainable development

a world of opportunity for Green start-ups Environmental protection

Resource Management

Protection of ambient air

Water management

Protection of climate

Management of forest resources

Wastewater management

Management of flora and fauna

Waste management

Energy management

Noise and vibration abatement

Management of minerals

Protection of biodiversity and landscape

Eco-construction

Protection against radiation

Natural resource management activities

Protection of soil, groundwater and surface water

Eco-tourism

Environmental monitoring and instrumentation

Organic agriculture

Research and development

Promising initiatives Abu Dhabi has taken a great step towards consolidating its green SME sector by creating the Masdar Free Zone. As a business cluster, Masdar Free Zone endeavours to provide SMEs and start-ups with an environment that inspires innovation, offers business development opportunities and provides a living lab and test bed for new technologies. However, office rents have been a hurdle to overcome for green SMEs with limited financial capabilities. “High office rents in Masdar Free Zone have been a major deterrent for small businesses desirous of setting shop in the business cluster,” says Dubai-based sustainability consultant Sunanda Swain. In 2007, Qatar also launched a promising

initiative to promote green growth in the form of Qatar Science and Technology Park (QSTP) with core areas of focus being energy, environment, health sciences and information and communication technologies. During the initial phase, QSTP has been heavily focused on establishing infrastructure and attracting large companies. During the second phase, QSTP intends to target SMEs, and provide them support on legal matters, finance, mentoring and business planning. The GCC region is facing multiple challenges in the growth of green SME sector. As Ruba Al Zu’bi says, “The most pressing challenges are the increasing disconnect between education and market needs, and the disorientation of research and development from industry priorities and trends. Government agencies, business associations and NGOs need to play a bigger role in advocating more streamlined priorities for green growth across all industrial sectors.” Green SMEs in the region are facing significant barriers to entry despite their key role in developing locally appropriate technologies and eco-friendly business models. Policy interventions for supporting green SMEs in the GCC are urgently required to overcome major barriers in the region, including knowledgesharing, raising environmental awareness, enhancing financial support, supporting skill development and skill formation, improving market access and implementing green taxation. In recent decades, entrepreneurship in the GCC has been increasing at a rapid pace which should be channeled towards addressing water, energy, environment and waste management challenges, thereby converting environmental constraints into business opportunities.

special feature

consultant in Middle East and North Africa region, “SMEs should be the drivers of transformation towards green economy in the Middle East. Lack of clear policy direction and enablers is hindering growth and competitiveness of green SMEs.” Product market regulations, which stifle competition, pose a big hurdle to SMEs operating in renewables, energy, environment and sustainability sectors. For example, stateowned companies in GCC countries have almost complete monopoly in network industries which have large environmental impacts (electricity/energy sector) or control strategic environmental services (water and waste management sector). Restructuring of the SME sector in the GCC is essential to allow small businesses to grow and prosper, thus catalysing the region’s transition to a green economy. SMEs account for a vast majority of production units and employment across the Middle East. For example, SMEs are responsible for around 60 percent of UAE’s GDP. Needless to say, participation of SMEs is essential in the transition to a low-carbon economy, thus paving the way for greening the business sector and development of green skills across all industrial segments. Green SMEs require strong government support for growth, which is unfortunately lacking in several GCC countries. As Ruba Al Zu’bi puts it, “Despite the humongous opportunity for green growth in the Middle East, magnified by climate change, water scarcity, oil dependency and environmental footprint, green SMEs are plagued by severe challenges and competition.”

In 2007, Qatar also launched a promising initiative to promote green growth in the form of Qatar Science and Technology Park (QSTP), with core areas of focus being energy, environment, health sciences and information and communication technologies. QSTP intends to target SMEs and provide them support on legal matters, finance, mentoring and business planning.

Salman Zafar is the founder of EcoMENA.

LAST WORD

Cultivating innovation entrepreneurship through education Drawing on his experience of working in Silicon Valley, Maher Hakim asks whether a similar innovation hub could emerge in the GCC region in the near future.

efore coming to teach at Carnegie Mellon University in Qatar, I lived for nearly two decades in Silicon Valley building tech companies from the ground up in fields such as B2B e-commerce, healthcare mobile technologies, online education and crowdfunding. Silicon Valley was, and still is, the world’s most vibrant innovation hub where the greatest talent in the world comes together to create the next innovations. Would a similar innovation hub emerge in our region in the near future? Qatar in particular is starting with an advantage: Doha is a diverse community where global talent in different fields such as media, technology, finance and healthcare is collaborating with local talent. Global universities such as Carnegie Mellon and Texas A&M and world-class research organisations such as Qatar Computer Research Institute are engaged in cutting-edge scientific research. Capital is abundant for aspiring entrepreneurs, and the Qatari government shows a keen desire to provide knowledge and education. All of these elements create an environment that encourages Qatar’s youth to be creative, inventive and entrepreneurial. Innovation is a process that leads to the development of new products, services or means to change people’s lives. It is a long, grueling and unpredictable process that follows nature’s law of survival of the fittest. The fittest are the innovators who have the skills and stamina to endure the experimental nature of the process, and the ability to acquire and develop the resources needed to succeed. The innovation process starts much earlier than the first glimpse of an idea: it begins with the development of the would-be innovators themselves. One of the earliest, and most important, influencers in the innovation process is the university. Carnegie Mellon

University’s approach is to shape young people to be entrepreneurs who not only think big, but have the enthusiasm, passion and perseverance to endure the long and unpredictable process. New research in innovation has identified that true innovators are driven by a desire to change the status quo and a healthy appetite for taking calculated risks. The university has an important role, not just developing the technical abilities of their students, but also fostering the behavioural skills needed to succeed in the innovation journey. I teach my students that a key component of entrepreneurial success is the company’s founding team and the relationship among the team members. Carnegie Mellon University in Qatar requires students to collaborate on projects; and learn to work together for a common purpose. These skills are vital for the budding entrepreneur: to nurture professional relationships, pick partners very carefully; and take the time to align everyone behind a single vision and business strategy. Intellectual curiosity is a human instinct and an essential part of human development. Those of us with children know how often they ask, why. Somehow, this trait seems to fade as children grow, but innovation and entrepreneurship cannot thrive when intellectual curiosity is suppressed, left unsatisfied, or delegated to another human being. Carnegie Mellon Qatar views curiosity (questioning, observing, and experimenting, etcetera) as an essential part of innovation. An education should not be merely stuffing information into students’ heads, but teaching them how to think on their own, how to seek answers, and how to review information with critical eye. On a broader level, Qatar Foundation establishes and

supports incubation centres to educate entrepreneurs and innovators, providing them with the needed skills to succeed. These centres, including the new Al Faisal Carnegie Innovation Entrepreneurship Center, provide mentorship, training and support for innovation experiments in the start-up phase. Continuing along this path, I believe that the next decade will witness the emergence of successful ventures in the Arab world, and Qatar can and should be at the centre of these successes.

Innovation is a long, gruelling and unpredictable process that follows nature’s law of survival of the fittest.

Dr. Maher Hakim is an associate professor of entrepreneurship at Carnegie Mellon University in Qatar.

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