Why Bahrain is attracting more businesses
Banking on its strong assets of innovative human capital and an attractive regulatory environment, Bahrain has emerged as the hub for tech entrepreneurs.
In recent years, tech startups – consisting of new-generation Arab entrepreneurs and immigrant business operators – have leveraged their talents and technology to gain a market foothold in the Arab Middle East in the era of digitization.
Tech startup firms have mushroomed to tap into tech-savvy, connected consumers, particularly in Dubai. Places like Dubai have attracted not only enterprising locals but immigrant entrepreneurs or global technology players such as Amazon, Facebook, Google where their expanded presence have led to brisk business.
Fertile ground for tech enterprises
Bahrain’s strength in attracting technologists and entrepreneurs is also hinged on low operating costs, a competitive taxation system, and the 100 percent foreign ownership allowed in most sectors, apart from the sound regulatory system.
Recent trade show turnouts also attest to how Bahrain has become fertile ground for financial or tech startup entrepreneurs. It helps that most Bahraini tech talents have adopted a flexible business mindset, and that there are entrepreneur-friendly economic places set in place.
Bahrain Economic Development Board (EDB) Chief Executive Khalid Al Rumaihi recently noted that more than 50 new international firms have set up business in Bahrain, creating more than 2,300 jobs. Such developments underscore how economic development continues to be robust. Since EDB’s inception in 2001, Al Rumaihi said, Bahrain’s non-oil sector has posted an average 7.5 percent annual growth.
Among the companies that have cashed in on rising new technologies and market receptivity to digitalization is telecom player Batelco Group.Batelco Bahrain CEO Muna Al Hashemi takes pride in saying that the company has kept its ear on the ground, focusing on what its target consumers want rather than merely keeping an eye on what competitors are doing.
Forward-looking stance
Batelco pioneered a series of cloud-based services, explored applications of the Internet of Things (IoT), mobile payments and other current technologies. To further stay ahead of the game, companies like Batelco have braced themselves for transformative technology that will take shape a few years from now. Partnering with Ericsson, the telecom firm successfully conducted a 5G trial in Bahrain last May. Al Hashemi said 5G will be ready to roll out for Bahrain commercial use by 2019, with a possible launch by end-2018.
It is interesting to note that more established firms in their home countries have tapped into local talents (with skill sets) in hubs for tech enterprises, notably Dubai. What entrepreneurs need to continue to work on, if you go with reports like the Global Entrepreneurship Development Institute’s rankings of countries soaring in terms of global enterprise, is to be less risk-averse and more adept in adopting technology vis-à-vis other counterparts across the world.
Despite the perceived weaknesses of some of Bahrain’s local start-ups, international firms continue to gravitate to that part of the world and ink deals with entities that show much promise. American multinational tech firm Microsoft, for instance, sealed a partnership agreement with Bahrain start-up firm CH9, that assists new small and medium-sized enterprises (SMEs) in acquiring the needed resources for business takeoff.
It can be noted that about 90 percent of Bahrain enterprises are SMEs. Their economic contribution to the Kingdom’s GDP is around 30 percent. Hence, the support for such small-scale enterprises has been forthcoming. A few months ago, Bahrain SME Fund was bolstered with a whopping $100 million, facilitated by investment bank Ibdar Bank and public-government organization Labour Fund (Tamkeen) in partnership with the Islamic Corporation for the Development of the Private Sector.
Encouraging entrepreneurship
Big companies’ investments in local startups has been driven by several key factors. Foremost among these is the Middle Eastern government’s adoption of legal and socio-economic measures to encourage entrepreneurship. Dubai, in particular, has embraced technology and is set to improve efficiency in government documentation.
Being continually exposed to best business practices, apart from hurdling obstacles like language and gender barriers, has also set the stage for entrepreneurial success. Clear-cut illustrations are the thriving companies Jamalon, which ventured into online book business; Unifonic, the cloud communications firm that introduced the innovative mobile marketing business of sending millions of messages instantaneously; BitOasis, which introduced one of the first Bitcoin wallets and exchanges in the Middle East.
Notwithstanding the geopolitical risks and fragility of the Middle East and North African region (MENA), the prospects of expanded partnerships have not dimmed. Companies like Proxera, which tailors solutions to empower businesses with tools that analyze customer behavior and measure results, have increased awareness for digital tools. Proxera was a participant at a Dubai trade show, where it highlighted trends and developments in the e-commerce and retail sector in the MENA region.
