Making the grade in the Middle East
The Middle East remains a market of huge potential for inward investors and innovators. But only if they observe protocol, localise talent and understand the importance of getting it right first time, says Hesham Wahby
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| Wahby: Protocol is also key in Middle East |
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 There are of course several obstacles that stand in the way of innovators in the Middle East, and a lot of these obstacles lie in regulations and public policy
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The world of business and industry is changing, and one of the regions where this is most evident is the Middle East. There has been a reallocation of economic assets in the world.
The Middle East is increasingly becoming a major global economic force and a fertile market for innovative products and services.
With the emerging trends and opportunities in the region, it is no longer possible nor wise to ignore the Middle East. But how should one go about doing business there?
First, there is a need for international businesses to re-assess their strategies and approach. The traditional ways of doing business by exporting professionals and expecting them to sell the same products developed at home no longer aligns with the changed marketplace.
Deeper level
Businesses need to engage the market at a deeper level, develop products specific to the Middle East and its changing trends, and take advantage of innovations that materialize locally.
The best way to do this is to recruit local talent and to integrate this talent and local experience into your global perspective and operational strategies.
Second, it is crucial to understand the local business environment and culture. To do business in the Middle East requires deeper insight into public policy, national agendas and cultural implications. This means that it is more important than ever to have close relationships with partners already in the Middle East.
Also, business leaders need to be aware of the importance of protocol. Mistakes in protocol and in understanding the market’s culture from the outset can be fatal.
Middle Eastern countries are starting to appear at the top of the list of international investors. Moreover, public and private sector leaders in the region are realizing that the natural resources on which they have traditionally depended will not last forever, and have begun to explore more innovative and sustainable ways to grow their economies.
In the last several years, for instance, the Middle East has been the second-fastest growing market for mobile phones, following closely after Africa, with a 30 per cent growth rate in 2006. Business opportunities are increasing in the region as this market accelerates, becomes more sophisticated and creates more demand.
August 2009 witnesses the 8th annual Egyptian Engineering Day (EED) held in Cairo. I delivered a workshop at the event this year about enabling the global entrepreneur, going with the theme of innovation which was the focus of this year’s national forum.
Several of the previous years’ events also had entrepreneurship as their theme, and advocated for technology professionals in the region to take responsibility for industrial development. This is just one example of how the Middle Eastern community is becoming more aware of the need to launch new initiatives and take advantage of a changing international economy.
The EED has also spawned the Made In Arabia competition, now managed by the Arab Science and Technology Foundation. The competition recognizes youth across the Middle East who are trying to solve problems in innovative ways.
And if you have missed the EED, or happen to be in other countries in the region, be sure to participate in Global Entrepreneurship Week, November 16-22, 2009.
Several Middle Eastern countries are conducting week-long programmes all designed to connect Middle East entrepreneurs and innovators to other aspiring leaders in more than 50 countries around the world.
The obstacles
However, there are, of course, several obstacles that stand in the way of innovators in the Middle East, and a lot of these obstacles lie in regulations and public policy.
For instance, an enterprising car mechanic who developed and sold a car alarm system based on GSM in Cairo was recently fined and forced to recall his products for not obtaining proper wireless communications licensing. The product actually includes a GSM phone and interfaces with it to send a text message in the event of a burglary attempt.
This same product would usually face no regulatory problems in other countries, since it simply builds on an existing licensed infrastructure, and does not introduce a new wireless communication system.
Cultural barriers
While the problem is mainly one of education on the part of the regulatory authorities concerned, it is complicated by bureaucracy and a culture that traditionally does not encourage innovative endeavors by individuals.
This combination leads many to unfortunately assume that anyone who makes an unconventional success must be doing something illegal.
Local business leaders and politicians need to be aware of how their culture and public policy environment may be hindering economic development. At the same time, foreign investors and firms wanting to do business in the region need to avoid making some common mistakes that may lead to missed opportunities. This is especially true in a market where it is important to “get it right the first time”.
My company, founded to enable clients to expand their operations to new regions and new areas of business, adopts an approach to provide relevant information about public policy, culture and other contextual factors in the markets of interest. We do this in addition to leveraging our marketplace experience to help our clients make the right choices, execute on their objectives and achieve the desired results.
The Middle East is a keen focus due to its rapid economic growth and expanding opportunities for business. Opportunity lies not only within the Middle East, but also in Africa and its increasing economic integration with the other regions of the world such as India and China.
For those willing to make the effort and understand the region, the market and its culture, opportunity awaits. But only if business leaders re-assess their strategies and approach – and understand the local drivers in the Middle East marketplace.
Hesham Wahby, is Principal, Egypt and Middle East at the US-headquartered company Mercator XXI, LLC
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