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.