Wednesday
April 6
2016

Nathan Rauh-Bieri

Tunisia’s Entrepreneurial Ecosystem – Why Youth and Tech are Vital Elements

In February, The New York Times reported on the state of joblessness and resulting desperation among educated young people in rural Tunisia. This was the same demographic that protested in 2010, overthrowing the Ben Ali regime and sparking the Arab Spring. Five years on, an arid employment landscape (62.3 percent of college graduates are without work, as are 37.6 percent of young people) have fueled renewed protests. And yet, despite promises from the current government, jobs have not arrived. The article ends with the mayor of provincial Kasserine lamenting silence from the capital: “No one comes here to trace a vision for the region.” It evokes the old proverb, where there is no vision, the people perish. The Tunisian people are withering – indeed perishing – for want of a vision.

Entrepreneurship as Solution?

The economic landscape in Kasserine raises pointed questions about the limits and promises of entrepreneurship training as a tool for economic growth – in Tunisia and beyond. At the same time, failure to take account of Tunisia’s history and context can encourage orientalist tropes of the region as stubbornly undeveloped, unstable or needing x or y development strategy. That’s why it’s critical to delve into the particularities at play.

First, unemployment’s suffocating effect on the young is not unique to Kasserine, or to Tunisia. It is a challenge shared by countries throughout the Middle East and North Africa (MENA), whose youth bulge is well-documented.

Second, entrepreneurship has been heralded as a solution to this population shift. Just a week before the Kasserine article, a Devex article asserted that entrepreneurship could help drive Middle East revitalization. And a new report from the Atlantic Council argues that creating entrepreneurial culture is the only viable economic strategy for the MENA region. Entrepreneurial development training is seen as offering an opportunity to harness the region’s human resources and diversify its oil-dependent economies.

Third, however, Tunisia has received government-funded entrepreneurship training. To further complicate the picture, the Times article notes that many of those unemployed already hold advanced degrees. From abroad, USAID has launched a variety of measures to support SME growth. Yet in spite of efforts to create jobs through training, there remain obstacles to growth that training alone has not removed.

What are we to make of the fact that despite a new government and training efforts, the frustrations of 2010 persist? Is entrepreneurship not the panacea it is often made out to be?

 

Environmental Factors

The issue, some experts suggest, lies neither with entrepreneurship per se, nor efforts to instill it through training, but rather the environment in which it is practiced. Ask anyone who tries to grow their own food: climate and soil quality matter. It’s not enough to laud the idea of entrepreneurship if there’s a failure to nurture an entrepreneurship-friendly ecosystem.

The Atlantic Council asserts that for entrepreneurship to succeed in the MENA region, the youth segment must be integrated into new, tech-enabled industries. The Arab Spring and today’s protests signal that we’ve entered what its authors call the “Participation Revolution,” a rising generation’s demand for roles and use of tools to build their own futures. This cohort, come of age in an economic pressure-cooker, is ready for innovation and hungry for opportunity – ideal candidates to launch a start-up-friendly culture. (Or, as we’ve seen, to protest unmet needs.)

Youth participation makes sense, but why the focus on technology? The argument is that tech midwifes entrepreneurship, even in industries not directly tech-related; and entrepreneurship midwifes growth. Enabling entrepreneurs technologically, therefore, will result in much more than tech start-ups, for entrepreneurs drive economic regeneration and create employment. “What is good for start-ups,” the report concludes, “is good for the economy as a whole.”

Not all will accept technology-based, private-sector solutions uncritically. For one, the exhortation to embrace technology, when coming from a U.S.-based advisory group, may sound like a call to “develop” according to a Western paradigm. Anticipating this rebuttal, the report notes that the Internet is, statistically speaking, already in the hands of the people; its utility was proven in the Arab Spring. The Participation Revolution is here; now it is simply a matter of how proactively actors private and public harness its potential for economy-building activities. In this view, a move toward tech-based private enterprise is irreversible. But how efficiently various players adopt it in the face of the enormous economic challenges besetting a generation, is an open question with profound costs.

The more significant challenges to private-sector growth are political. The Times’ article highlights the ineffectiveness of training programs to promote private-sector growth apart from larger public interventions. Even government backing for training programs can come up short when government rules, banking practices and legal culture do not encourage initiative and risk-taking. Lacking longevity and public trust, the temporary government of the past three years has offered only short-term solutions. With a more stable government, some believe that today there is enough pressure on policy-makers to make reforms such as simplifying regulations, building sound competition policy and incentivizing innovation.

An alarming New Yorker article published last month suggests that Tunisia’s failure to make such reforms is creating dire consequences for the broader region. The piece exposes a strong jihadist movement forming in the economic vacuum of rural Tunisia, prompting young men to flock to Syria and Iraq. One young man put it starkly: “I can’t build anything in this country. But the Islamic State gives us the chance to create, to build bombs, to use technology.” Lacking jobs and disillusioned by democracy, the post-revolution young don’t just wither, they ignite, turning to radicalism.

An approach to blunting radicalism is to provide the tools needed to create jobs in neglected regions, says Barbara Peitsch, a program director at the Center for Political Studies at the University of Michigan. Having run a number of professional development programs for Tunisians, Peitsch is a strong proponent of entrepreneurial training, but sees a deep rural-urban divide forming obstacles to providing it. There is huge resource gap between Tunis and the countryside – in terms of both government programs and foreign assistance, a lack of support for education programs outside of Tunis, language differences (French, the language of higher education, is more widely spoken in Tunis), and cultural biases against entrepreneurial careers due to their instability. Despite these challenges, Peitsch believes advocating for entrepreneurship, through policy change and additional programs, particularly outside of Tunis, is perhaps the best way to create better alternatives to radicalism.

 

A Multifaceted Approach

Human capital development is clearly important. Mowgli Mentoring, an organization that works with SME owners across the MENA region, hails mentoring as a driver of economic growth; it reports an astounding 890 percent return on investment – both through safeguarding existing jobs and creating new ones. But the example of Tunisia suggests the workforce of tomorrow, even if expertly trained, won’t be successful apart from a functioning ecosystem.

For its part, Mowgli identifies three critical pieces of an entrepreneurship-friendly ecosystem in addition to human capital: 1.) Environment, 2.) Finance, and 3.) Infrastructure – each a critical factor in Tunisia.

Ali Mnif, a Tunis-based entrepreneurship expert, echoes the importance of these factors. He emphasizes the importance of investment, an influx of diverse funds to distribute the risks of entrepreneurship. But he recognizes the region’s security has bearing on whether foreign enterprises – particularly global tech companies – will come set up shop.

“Alone, we cannot solve these issues,” says Mnif. “What we need in this democratic transition [are friends] to invest in Tunisia … who consider Tunisia not as a threat, but as a sign of hope.”

In spite of the challenges facing rural regions, Mnif’s outlook from the capital is upbeat. In light of its recent political changes, he recalls former Prime Minister Medhi Jomaa’s description of Tunisia as a “start-up democracy.” For Mnif, this moniker is both descriptive and visionary. “If we consider ourselves a ‘start-up democracy,’” he says, Tunisia should prepare to take a risk when it comes to overhauling its education system, “not copying, but bringing our own system.”

What kind of educational reforms would bolster the economy? Mnif points to several: Graduates with excellent customer service and communications skills (“soft skills”). Improved international rankings for its universities, in part through partnerships with foreign institutions. Moving away from memorization and toward competencies preparing students for the job market they can expect to inherit. At the Tunis Business School, for example, students have access to a SmartCenter, which incorporates mentoring and career services into the educational experience, connects students with the entrepreneurial community, and provides opportunities to develop entrepreneurial mindset through contests. Educating for entrepreneurial skills remains a critical piece to economy-building, and good work is happening.

All of this suggests that, for entrepreneurship to take root in Tunisia, what is required is: 1) Education: investment in human capital, which prepares students for entrepreneurial futures and delivers relevant competencies; and 2) Ecosystem: a society that encourages and provides business-friendly legal and regulatory frameworks, a tech infrastructure and access to capital. Each approach must embrace tech-based fields as “an engine for economic growth or societal problem solving.”

The recent view from Kasserine demonstrates that economic interventions always have human consequences. By starting with the people, human capacity-building plays a critical role in building transferrable skills, changing/developing/forming new mindsets, and spurring economic growth through scalable self-employment. Ultimately, though, its impact is limited without multifaceted support spanning government, business and education sectors working in concert. Organizations and schools have vital work to do in sowing quality entrepreneurial training. But the soil and climate are what will stymie or support a fruitful spring.

 

Top image: A sign in French and Arabic refers to the “Street of Entrepreneur.” Image credit: David Weekly via Flickr.

Secondary image: Events like the Tunisia Investment Forum in 2011 fostered a sense of optimism out of the Arab Spring. Image credit: Magharebia via Flickr.

Carousel image: Amine GHRABI, via Flickr

 

Nathan Rauh-Bieri

 

Categories
Education, Entrepreneurship
Tags
education, employment, entrepreneurship, startup, technology