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 / Winter 2013 / Issue 73(originally published by Booz & Company)

Business Literature: Best Business Books 2013

Best Business Books 2013: Globalization

We are seeing hotbeds of entrepreneurial activity in emerging economies throughout the world. It is highly likely that this is where many of the great global competitors of the future are being incubated right now. One of these hotbeds is the Middle East. It’s easy to forget that, like China and India, the Middle East was once one of the most technologically advanced and economically powerful regions in the world, with a leadership position in science, math, and philosophy, and a long tradition of entrepreneurship. Today, even as the region is experiencing wrenching political upheavals, Christopher M. Schroeder, a venture capitalist and former e-commerce CEO, points to another revolution—a less-heralded entrepreneurial one—that is unfolding with far fewer headlines.

In Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, Schroeder reminds us that the collective GDP of the Arab world is larger than Russia’s and India’s and nearly twice that of China on a per capita basis. The Middle East also has more than 350 million people whose disposable income has grown by 50 percent over the last three years and whose Internet appetite has been expanding at a speed that rivals that of any other region in the world. And more than 40 percent of those online denizens say that they would like to start their own businesses.

Schroeder categorizes the startups that are being launched in the Middle East into three buckets: improvisers, problem solvers, and global players.

Improvisers are businesses that adopt proven models from other markets and “Arabize” them in both language and cultural sensibility. For example, is reminiscent of WebMD, but adds the anonymity of message boards to protect female users. Egypt’s Nezal Entertainment created a Facebook game based on its founders’ experiences in Tahrir Square, using those 18 days of protest as a backdrop.

Problem solvers are businesses that take on local and regional challenges that were once relegated to governments to solve. In Egypt, RecycloBekia has developed a successful business around the recycling of computer components, which the company plans to introduce throughout the Middle East.

But it’s the global players that should be of most interest to established MNCs trying to understand the fast-changing competitive lineup. In the healthcare arena, for example, Lebanon’s Cardio Diagnostics has designed a lightweight device with heart-monitoring sensors that regularly send signals to a dedicated monitoring center. In contrast to the cumbersome, wired devices that are usually used for one or two days in the United States, Cardio Diagnostics’ devices are used for six weeks or more, and they offer improved monitoring via intelligent algorithms.

Schroeder thinks that we will see Middle East startups offering similarly innovative solutions that could be scaled throughout the region and beyond in at least three other areas: mobile communications, on the basis of the nearly 100 percent mobile penetration and rapid adoption of smartphones in the region; solar-powered electricity, which, for example, could be used to cost-effectively tap into the world’s largest untapped body of fresh water, which lies beneath the Egyptian–Libyan desert; and social networking, through these entrepreneurs’ intimate knowledge of their local markets and the consumer-facing platforms that would work best in the region.

Unlike the authors of the other best business books on globalization, Schroeder makes little attempt to provide a diagnostic framework to explain what he sees on the ground. Instead, he provides a highly engaging account of his encounters with one Middle East entrepreneur after another, and, in doing so, is convincing in his argument that we should not overlook the entrepreneurial spirit of the Middle East, and other emerging economies, as we try to anticipate where the competitive thrusts of tomorrow may originate.

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