President Obama, King Mohammed and… Startups in Morocco
Next week, King Mohammed VI of Morocco is visiting President Obama in Washington, DC, on the heels of an announcement that his Majesty’s government will convene an entrepreneurship summit in 2014 with the U.S. Government. Morocco has much to gain from its new partnership with the United States around startups.
They say the best way to commit to a resolution for change is to make it public—making you, of course, publicly accountable to your commitment. Inviting the world to come and explore its entrepreneurship ecosystem at the end of next year is a strong demonstration that Morocco is serious about a commitment to build a more entrepreneurial economy in North Africa.
This focus on entrepreneurs comes at a time when stakeholders of the Moroccan entrepreneurship ecosystem see big opportunities to remove roadblocks despite immediate political uncertainties where the national government is in transition after one of the leading political parties left the coalition.
For example, even before a new government has taken shape, there are plans underway for a new lineup that will include a ministry dedicated to entrepreneurship. As one entrepreneur “evangelist” from Morocco, K. Jay Hokimi explained, this would be a first in the country’s history. In fact, entrepreneurship promotion now appears to be a mission the King himself is likely to oversee. He could learn a great deal from President Obama who has been one of the few heads of state to talk “startups.” King Mohammed can also rely on his biggest corporate actors. Major employers in Morocco do not appear to be threatened by upstart disruptive thinkers who birth new firms. For example, Morocco's phosphate tycoon, OCP, is, I understand, eager to play an active role in helping to build a stronger entrepreneurship ecosystem in Morocco and the region.
This all comes as good news—and not a moment too soon. Just glancing at the nation’s Doing Business indicators shows that the country must improve all aspects of its business regulatory environment, particularly in key aspects for scaling companies such as the ease of getting electricity, obtaining credit and protecting investors.
Further, despite the country’s strengths in exporting sectors such as tourism, phosphates, textiles, apparel and subcomponents, Morocco suffers from high unemployment (graduate unemployment stands currently at 30%) and an education system that is in dire need of improvement. These are the same problems that were some of the biggest factors that led to revolution in Egypt, Tunisia and Libya.
To date, pro-entrepreneurship efforts have been sporadic, short-term initiatives. For example, the Ministry of Sports and Youth recently obtained a $5 million grant from the World Bank to run an entrepreneurship education program. While positioned to create an entrepreneurial culture, or at least an entrepreneur-tolerant society, these efforts have yet to create enough impetus for any significant pro-entrepreneurship institutional reforms that would re-route the nation’s economic path.
But the potential however is enormous. To begin, Morocco startups have the advantage of proximity to Europe and relatively low labor costs. The country has also achieved a level of macroeconomic stability suitable to attract investors. King Mohammed, who took the throne in 1999 after debt-heavy decades, brought important stabilization by (with the guidance of the International Monetary Fund) lowering inflation and wading the economic difficulties arising from Europe’s economic slowdown. The King also put the country on a path to allow new players to help advance the nation’s goals, such as expanding the country’s renewable energy capacity so that 40% of electricity output will be renewable by 2020.
The country also benefits from significant international interest and support while its own support organizations are growing. Global Entrepreneurship Week, which serves as a strong foundation for bringing together the leaders in the entrepreneurial ecosystems in 140 countries, is now active in Morocco. Hubs are emerging such as Casablanca’s first coworking place, iNSANE! and you know entrepreneurs see a future in a country when you see a newly-established Endeavor office. This sixth Endeavor affiliate in the Middle East and North Africa (MENA) region follows success in promoting high-growth entrepreneurship in Turkey, Egypt, Jordan, Lebanon and Saudi Arabia. Spearheaded by a local board of leading business people, the country promises to see a new wave of scaling businesses.
Another organization having an impact is the Fondation du Jeune Entrepreneur in Morocco which offers entrepreneurship programs throughout the country. In partnership with neighboring initiatives such as the Algerian Startup Initiative, Tunisia’s Education For Employment , Wiki Start Up, Intel, the U.S.-North Africa Partnership for Economic Opportunity (PNB-NAPEO), Abraaj Capital and Gust, this civil sector organization created the first-ever Maghreb startup initiative for potential young entrepreneurs jumping at the chance to gain visibility and funding through competitions. One of those young entrepreneurs, Essaid Raoui, took first place in last year’s competition with his ERDK project that offers a new generation of solar water heater that lasts for 30 years and is 40% cheaper than the equivalent amount of energy generated by diesel. Raoui registered more than three new patents during this entrepreneurial venture.
The challenges are many, but there is more than enough motivation for all stakeholders. Morocco stands to gain much from opening its economy to the creative genius of startups. With supportive leadership in the public and civil sector, paired with an international commitment to back up progress in building an environment supportive of new business starts, the case of Morocco’s entrepreneurial vision promises to be a story of swift and decisive action and one I hope President Obama and King Mohammed discuss on November 22.