Conference Presentation, Panel, Fireside Chat
The Economic Future of the Middle East
Milken InstituteChristopher Schroeder, Wael, Hala Fadal, Samir, Elizabeth, Amin, Al, Jack Dorsey, Mark Zuckerberg, Jack Lew, David Folio, Chris Brown, Lara Satrakhin, Sami Toukan
- Seismic shifts in capital allocation are occurring, with Western private equity and venture capital entering the region, exemplified by a rumored $200M+ acquisition of a food delivery service and a $1B+ valuation for souk.com, while investors like Dave McClure and new funds target the MENA market.
- Smartphone penetration is currently 70-80% in parts of the Gulf, with predictions that this level will be reached across the entire region by the end of the decade, creating a massive connected user base for startups.
- The demographic landscape features a youth population seeking employment and a labor force expected to grow by 27% over the next 15 years, driving a cultural shift where young people in Egypt, Saudi Arabia, the UAE, Lebanon, Tunisia, and Morocco are proactively solving problems rather than waiting for government intervention.
- Entrepreneurship is becoming highly gender-inclusive, with over 25% of regional startups founded by women, and data from the MIT Arab Startup Competition showing 69% of teams included women and 40% were led by them.
- Significant market opportunities exist in education, healthcare, traffic, and energy, with the education sector spending approximately $100 billion annually despite inefficiencies, such as Qatar's high per-capita spending yielding low international student achievement scores.
- Technology is expected to disrupt traditional models, including an anticipated move toward 50% of high school students attending online schools by the time the current cohort grows up, and specific ventures like Energy24 aiming for 12-hour battery solutions and Anahami expanding to video.
- Economic growth forecasts include Egypt potentially growing by over 4% this year, while the broader digital sector is predicted to transform society and enable leapfrogging of traditional business models.
- Investment risks are identified as macroeconomic, political, regulatory instability, and corruption, with the region potentially facing a long or violent path toward sustainability and democracy, alongside a need to avoid bottom-up change if wars or refugee crises intervene.
- The ecosystem faces structural challenges where traditional banks remain conservative, favoring government bonds over SME risk capital, and established power structures are perceived as trying to protect the past, though some leaders are expected to eventually embrace painful reforms for long-term prosperity.
- Cross-border collaboration is anticipated to expand, including potential Turkish-Arab business expansion, knowledge sharing across the region if the Israeli-Palestinian conflict is resolved, and the emergence of a regional hub that rivals Silicon Valley while leveraging a global, talent-driven approach.