We look at what sectors are ripe for new businesses in the Middle East!
It’s not premature to talk about a new Middle East. A young population, hungry for education and new opportunities, the realities of the post-oil economy, and the end of the artificial wealth of the real estate boom have combined to create a landscape rich in potential – and ripe for innovative ideas and bold thinking. Here is our list of potentially the profitable business sectors in the Middle East.
1. Information and Communication Technology
Current government and private sector support already offers ICT start-ups an ample boost, especially in energy-poor Jordan and Egypt. This general trend will only increase as investors, including substantial funds from the US, seek to maximize growth and minimize risk by seeking out companies that can reach a global market and scale quickly, with minimal overhead. Maktoob is the obvious example, but the recent acquisition of group saving site GoNabit by LiveSocial is one of countless others.
2. Human Resources
Given that almost every small business cites hiring and retaining talent as a central challenge, it comes as no surprise that the Hay Group ranked human resources as the sector with the highest growth in compensation in its 2011 report on Middle East Labour Trends. Outsourcing in this sector in the region is certainly on the rise, with functions such as recruitment, healthcare management and training increasingly offered to external vendors – all helping to drive cost-savings and standardization.
Yes, still. Despite the delayed fallout from the global crisis, which slowed construction in the UAE, projects are again accelerating in Saudi Arabia. Eight of the Allworld’s 44 Saudi Fast Growth companies last year worked in the construction and engineering sector, and there are still the need for housing and leisure facilities in the GCC and Egypt – as long as they’re of sensible proportions.
4. Healthcare and medicine
Demand dictates that there is always a regional market for pharmaceutical goods and healthcare services, making it a consistently desirable sector for investors, as Walid Bakr of Abraaj Capital stated in his assessment of Egypt’s economy last year. Medical tourism is also a boom sector for countries like Jordan, whose first-rate facilities can offer some elective treatments at 10 per cent of prices in the US. They currently attract patients from Libya, Iraq, Sudan and the Gulf States.
5. Renewable energy
As non-oil-rich countries seek solutions for increasing energy needs, alternative energy solutions – like that provided by quickly rising MENA Geothermal – are in hot demand. Jordan’s National Energy Strategy calls for renewable energy to account for 10 per cent of the energy mix within a decade.
6. Public Relations and Advertising
Even as new opportunities emerge in online advertising, traditional advertising is still in high demand in the region, as evidenced by the rise of several of the AllWorld Network’s Fast Growth companies in the region in PR and advertising – with the large wealth of Dubai and Abu Dhabi natural targets for luxury consumer spend.
7. Manufacturing for export
Manufacturing for export has been the engine of China’s growth in the last ten years, and there is ample reason to suggest that light industry, particularly in technical components, can become a driver of the region’s economy. In Bahrain, for instance, where industry accounts form 16 per cent of GDP, the Salman Industrial City project was launched, providing facilities for such development.