THE NEW STAR
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
When Banque du Liban first organized Accelerate, an innovation and startup conference, back in 2014, an astonished Dr. Riad T. Salameh thanked the attendees for encouraging him to carry on with the efforts to bumper Lebanon's knowledge economy. By the time Accelerate took place for the second time in December 2015, the event had ascended to an annual gathering where discussion on the growing startup ecosystem could be efficiently channeled. A third edition of Accelerate is due to happen in December 2016, and the expectations are even higher than the last time.
Banque du Liban's Accelerate is clear proof of the momentum the startup ecosystem in Lebanon is going through. Ever since Circular 331 was put in place, the knowledge economy has flourished to become a promising driver of Lebanon's near future, with USD400 million available in investment guarantees for entrepreneurial initiatives. Currently, there are an estimate 160 startups and 300 ICT companies in Lebanon benefiting from Circular 331, and the initiative has also spurred an unparalleled interest from both the public and private sectors to create a one-stop-shop for tech startups to heal the cracks that could harm an uncoordinated ecosystem.
The emergence of an increasing number of actors involved in the ecosystem has solidified the industry's position as a flagship Lebanon; but it has also made interaction sturdier, as venture capitals, accelerators, incubators, angel fund investors, boot camps, multinationals, and the very same startups struggle to assemble linear cooperation when the components are dispersed.
The interaction among the ecosystem's components is meant to enhance the successful exit of startups to provide them with the necessary tools to become marketable. Along with the disbursement of funds, the opening of operational and workshop spaces has followed suit in an attempt to concentrate all the participants in the tech ecosystem in unified spaces. These also aim at improving business environments and the telecom infrastructure of Lebanon. According to the World Bank's Enterprise Survey, Lebanon ranks 104th out of 189 countries in terms of doing business, with a lack of protection for minority investors, weak dispute resolving regulations, and problems to start a business as the biggest roadblocks. The country does not perform much better in ICT infrastructure and internet affordability, with a poor quality of service embedded by the telecoms monopoly.
To counter the negative effect, different initiatives have spurred to offer proper offices for the ecosystem. At the center of workspaces for the tech industry is the Beirut Digital District (BDD), a communitarian space of 50,000sqm that has graduated over 50 successful startups and employs over 1,000 people. The BDD is the perfect exemplification of a top-notch knowledge economy center with facilities that range from meeting rooms to cafés and a gym. BDD General Manager Mouhamad Rabah described it as “a platform with the necessary infrastructure, high-speed internet, and a fiber-optic networks to attract the young talent that was booming in the technology-based industries.” Moreover, the BDD has a four-phase plan to expand its space availability over the next 15 years, with an upcoming 17,000sqm facility expected by 2020.
The number of co-working spaces with affordable options for startups to mix in an entrepreneurial environment has further increased with projects such as AltCity, an initiative offering workshops and networking to a series of hosted startups; Cloud5, a technology park with 500sqm dedicated to 60 entrepreneurial projects with a series of accelerators and incubators to and operated by Microsoft, Wamda, Middle East Venture Partners, and Cisco; and Coworking 961, an initiative developed by MIT Enterprise and Bader Program offering mentorship, workshops, and networking right in the heart of Beirut city
In line with this space availability, the Ministry of Telecommunications has promised to make the sector more competitive by implementing a plan that will cover all of Lebanon with functional fiber-optics by 2020 and provide full 4G internet coverage by 2018. The privatization of the telecoms sector that has been in the air for several years also promises to bump the industry's capabilities by making the service affordable and efficient for everyone. With all the components put in place and the growing number of spaces available for the players to carry the game, the Lebanese knowledge economy presents itself as the new star of the country's economic future.
THE NEW STAR
TABLE OF CONTENTS
Focus: Lebanese-French Relations
Let’s be Franc
Lebanon shares a close relationship with its former colonizer, both in terms of economic relations and cultural identity among Lebanese. In spite of hardships like the presidential power vacuum and Syrian war next door, the bond is only getting stronger.
read articleFocus: Tripoli Economic Free Zone
The Tripoli Transformation
The Tripoli Special Economic Zone (TSEZ) is one of most ambitious projects in Lebanon at the moment. With an initial cost of USD27 million, it is meant to provide an alternative to the heavily centralized economic activity in Beirut, a new gateway for investments and trade to settle in northern Lebanon, and will transform the image of a long-neglected region.
read articleInterview
Dr. Freddie Baz, Vice Chairman & Group Strategy Director, Bank Audi
TBY talks to Dr. Freddie Baz, Vice Chairman & Group Strategy Director of Bank Audi, on the bank's increase in profits, dealing with currency devaluation, and working to turn the economy into an export-driven one.
read articleReview: Insurance
Life is a Rollercoaster
Unlike many emerging markets, Lebanon enjoys a relatively high insurance penetration rate and strong life segment, buoyed by compulsory lines and bancassurance. Competition remains fierce, however, and reform aimed at encouraging consolidation looks far off.
read articleInterview
Max R. Zaccar, Chairman of Commercial Insurance & President of the Association, Insurance Companies
TBY talks to Max R. Zaccar, Chairman of Commercial Insurance & President of the Association of Insurance Companies, on the resilience of the sector, increasing the already-high penetration rates in the country, and remaining one of the strongest insurance companies in the region.
read articleInterview
HE Arthur Nazarian, Minister, Energy and Water Resources
TBY talks to HE Arthur Nazarian, Minister of Energy and Water Resources, on the potential offshoots from oil and gas explorations, the country's National Energy Efficiency Action Plan, and attempts to increase renewable energy consumption.
read articleInterview
Wissam Zahabi, Chairman, Board of the Lebanese Petroleum Administration (LPA),
TBY talks to Wissam Zahabi, Chairman of the Board of the Lebanese Petroleum Administration (LPA), on making the investment climate attractive for foreign companies and becoming self-sufficient in energy.
read articleFocus: Sovereign Wealth Funds
Gas Pipe Dreams
Despite excitement over exploration of Lebanon's hydrocarbons, the creation of a sovereign wealth fund, which was included in legislation, has yet to take place. The country faces several obstacles in its path to creating and properly managing a fund.
read articleInterview
Pierre El Khoury, General Director, Lebanese Center for Energy Conservation (LCEC)
TBY talks to Pierre El Khoury, General Director of the Lebanese Center for Energy Conservation (LCEC), on the development of energy efficiency in Lebanon, awareness of energy conservation, and the country's 2020 renewable energy goals.
read articleInterview
Dr. Fady Gemayel, President, Association of Lebanese Industrialists (ALI)
TBY talks to Dr. Fady Gemayel, President of the Association of Lebanese Industrialists (ALI), on the group's work to promote industrialists, new developments in terms of industrial cities, and the future of industry in the country.
read articleFocus: Industrial Cities
Industrial Solution
Domestic and regional events have stifled Lebanon in building a strong national industry to protect and sustain its economy. Four proposed industrial zones throughout the country may provide it with the economic backbone it so desperately needs.
read articleInterview
Marianne Hoayek, Director of the Executive Office, Banque du Liban
TBY talks to Marianne Hoayek, Director of the Executive Office of Banque du Liban, on the roots of the Circular 331 concept, bridging funding gaps throughout the startup lifecycle, and the country's growing knowledge economy.
read articleRoundtable
Thinking It Through
On June 12, TBY and the American-Lebanese Chamber of Commerce (AmCham) organized a roundtable titled “Startup ecosystem sustainability: fostering cooperation to drive entrepreneurship." The participants discussed the impact of Circular 331, an initiative by Bank du Liban, the Lebanese central bank, to inject a potential of USD400 million into the local enterprise market and guarantee 75% of banks' investments in startups and startup support.
read articleFocus: Infrastructure for the startup ecosystem
The New Star
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
read articleFocus: Maritime Exports Bridge
Bridging The Gap
The conflict in Syria has wrought serious damage on the Lebanese economy, effectively closing off the country's trade routes through Syria. However, a new program geared at balancing the price disparities between land and sea transit is poised to help Lebanese industries.
read articleFocus: Real Estate
A Stimulus For The Rest Of Us
The real estate market in Lebanon is nothing like it used to be. The sector has slowed considerably, and demand has shifted from the traditional center, Beirut. However, stimulus packages from the central bank over the years have proven beneficial for all parties involved.
read articleInterview
Armand Pahrés, President, Lebanese Pharmaceutical Importers Association (LPIA)
TBY talks to Armand Pahrés, President of the Lebanese Pharmaceutical Importers Association (LPIA), on the development of legislation in the sector, boosting further innovation, and opportunities for Lebanon to become more self-sufficient in pharmaceuticals.
read articleFocus: Incentives for pharmaceuticals in Lebanon
Pharma Land
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
read articleInterview
HE Elias Bou Saab, Minister, Education and Higher Education
TBY talks to HE Elias Bou Saab, Minister of Education and Higher Education, on the ministry's initiatives to improve the education system, ensuring access to education for Syrian refugee children, and reversing the brain drain in the country.
read articleInterview
Mohamed Harajli, Provost, American University of Beirut (AUB)
TBY talks to Mohamed Harajli, Provost of the American University of Beirut (AUB), on his upcoming plans for the university, the key role played by the AUB alumni, and fostering an entrepreneurial spirit among students.
read articleFocus: Programs to school Syrian refugee children
High Marks
Proportional to its population, Lebanon has taken in significantly more Syrian refugees than any other country. With the country now facing the problem of placing the tens of thousands of Syrian children in school, international donors and local and foreign organizations are making educational support a priority.
read articleInterview
Joseph G. Jabbra, President, Lebanese American University (LAU)
TBY talks to Joseph G. Jabbra, President of the Lebanese American University (LAU), on embracing technology at the university, the challenges of Lebanon's brain drain, and the importance of having international links with other institutions.
read article
