The workshop organizers (JCI Lebanon, EIB, CMI) & collaborators (AUB & JCI Syria) – scope and focus
Entrepreneurship (definition and characteristics)
Innovation (what is it, why do we need it)
The Mediterranean region & the entrepreneurial ecosystem (and its players) 19 The challenges & opportunities
Acknowledgments ”Many great ideas go unexecuted, and many great executioners are without ideas. One without the other is worthless.” Tim Blixseth
This booklet is the result of the cooperation between JCI Lebanon, the European Investment Bank and the Marseille Center for Mediterranean Integration in collaboration with the American University of Beirut “Darwazah Center for Innovation Management and Entrepreneurship” and JCI Syria
www.jci.cc/local/lebanon www.eib.org www.cmimarseille.org
We would like to especially thank the following contributors without which, this booklet would not have seen the light:
Sharbel Maroun, JCI Lebanon Nadyne Ghannoum El Hage, JCI Lebanon Tarek Matar, JCI Lebanon Joelle Atallah, JCI Lebanon â€“ creative designer Firas Deeb, European Investment Bank, JCI Aleppo (Syria) Farah Ahmad, JCI Aleppo (Syria) Salam Yamout, Presidency of the Council of Ministers, Lebanon Ilyas Azzioui, ingenieur dĂŠtat, Morroco Imar AlNaeb, JCI Aleppo (Syria) Berytech, Lebanon JCI Aleppo JCI Beirut
Background “It may be a dream, but this is the core of entrepreneurship; at the very beginning an endeavor is always a dream. An innovative dream. A gateway to a new perspective.” Emil Abirascid
The Arab Spring has brought to light key challenges of job creation as a top priority in the Mediterranean region, more specifically, the Southern part of the Mediterranean. It is safe to estimate that over 60 percent of the overall populations in that region are under the age of 24 and jobless rates among youth are well over twice the regional average in some countries.
Disadvantaged youth and the resulting lack of employment have a direct impact on the absence of this important segment of the population and their engagement in socioeconomic development. They then develop feelings of marginalization, exclusion, frustration and low self-esteem which propel them into a self-defeating vicious circle.
Yet another important challenge facing the region is the low level of enterprise creation. According to a World Bank Group Entrepreneurship Survey (WBGES), data shows that MENA economies need to step up their efforts to provide a more enabling business environment and to promote entrepreneurship and the development of small and medium enterprises (SMEs)—with a particular focus on gender-specific barriers to entrepreneurship.
It therefore ensues that the creation of meaningful employment and enterprise opportunities for young people is one of the most critical sustainable development challenges currently facing this region. The private business sector – together with government and civil society - has a vital role to play in delivering innovate solutions to the growing youth unemployment problem.
Workshop Organizers & Collaborators “Coming together is a beginning; keeping together is progress; working together is success.” Henry Ford
The Organizers Junior Chamber International (JCI) is a world federation of young leaders and entrepreneurs with more than 200,000 active members and one million alumni all over the world. It is a non-profit organization represented in more than 115 countries. JCI is a network where young people from 18 to 40 all over the world learn to take on responsibilities and develop managerial skills through active hands on work on projects. This structure forms an international grassroots movement creating global impact through local action. JCI activities ranges from business, entrepreneurship to sustainable development projects; JCI members are young active citizens taking responsibility for their communities while improving themselves through participation, leadership and action in order to create positive change. The purpose of Junior Chamber is to contribute to the advancement of the community by providing the opportunity for young people to develop their leadership skills, social responsibility, entrepreneurship and fellowship necessary to create positive changes. It is attained through the following four areas of opportunity: · Individual Opportunities: Through various leadership training programs. · Community Opportunities: Through various community development programs, members identify social needs and issues, and develop projects to sustainably improve the well-being of the community. · International Opportunities: Through the capitalization of a network of 200,000 Jaycees in more than 1150 countries around the world.
Business Opportunities: Through the enhancement of the economics of the community by conducting projects and training sessions to increase business productivity. Junior Chamber International has a formal agreement with the International Chamber of Commerce- World Chambers Federation (ICC-WCF). Through these partnerships, JCI Local Organizations collaborate with local chambers of commerce on projects to advance global economic progress and encourage entrepreneurship. Junior Chamber International has been an official partner of the UN since 1954. Every year JCI holds a UN Leadership Summit in collaboration with the UN, where delegates team up with representatives from key partners to focus on a current international issue and seek workable solutions for members to enact locally.
The European Investment Bank (EIB) is the European Union’s financing institution. Its shareholders are the 27 Member States of the Union, which have jointly subscribed its capital. The EIB’s Board of Governors is composed of the Finance Ministers of these States. The EIB’s role is to provide long-term finance in support of investment projects. In addition to supporting the EU's policy objectives inside the European Union, the EIB is active in over 150 countries outside the EU (the pre-accession countries of South-East Europe, the Mediterranean partner countries, the African, Caribbean and Pacific countries, Asia and Latin America, Central Asia, Russia and other neighbours to the East), working to implement the financial pillar of EU external cooperation and development policies (private sector development, infrastructure development, security of energy supply, and environmental sustainability). The EIB, the largest international non-sovereign lender and borrower, raises the resources it needs to finance its lending activities by borrowing on the capital markets, mainly through public bond issues. Its AAA credit rating enables it to obtain the best terms on the market. As a not-for-profit institution, the EIB passes on this advantage in the terms it offers to the beneficiaries of its loans in both the public and private sectors.
The EIB works closely with the other EU institutions, especially the European Parliament, the European Council and the European Commission. The European Investment Fund is a subsidiary of the EIB.
The Marseille Center for Mediterranean Integration (CMI) was launched in 2009 with the mandate of creating a platform for integration in the Mediterranean through high-level policy dialogue and the sharing of knowledge in key development areas that are of primary importance for the region: urban and spatial development; skills, employment and labour mobility; the environment and water; transport and logistics; the knowledge economy and innovation. The founding members are Egypt, France, Jordan, Lebanon Morocco and Tunisia, together with the World Bank (WB) and the European Investment Bank (EIB).
Workshop Collaborators American University of Beirut, the Samih Darwazah Center for Innovation Management and Entrepreneurship at the Olayan School of Business of the American University of Beirut is dedicated to the study of innovation and entrepreneurship in the region with a view to documenting and enhancing innovative practices in the business community. It seeks to generate reliable information to guide evidence-based decision making in this key sector that holds strategic importance in a knowledge economy. Its scope includes research, field studies, benchmarking, seminars and workshops as well as conferences all focused on the pivotal domain of organizational renewal and wealth creation through creative enterprise.
JCI Syria is part of the International JCI network and collaborated in the workshop with a participative delegation of highly qualified members as well as providing a team to assist with research and the collation of results for this booklet.
The Innovation and Entrepreneurship workshop The IT1 Program The IT1 Program is an initiative of the Marseille Centre for Mediterranean Integration (CMI) and coordinated by the European Investment Bank (EIB). Its objective is to help increase the flow of innovative projects in the region and further strengthen the innovation chain. “Innovation and Entrepreneurship workshop” is the third workshop organized in the framework of the IT1 Program “Fostering Innovation, Supporting the Promotion and Financing of Innovation in the Mediterranean”. The IT1 Program proved particularly useful in providing a creative, interactive and immersive environment that encourages mutual learning among entrepreneurs and fosters open developmental dialogue and cooperation with one of the main international non-governmental organization for young active citizens with a strong presence in Mediterranean countries, Junior Chamber International. For the 2012-2015 phase of the CMI, the IT1 program will be expanded by a program named « Innovation Systems »: this program will focus on the fundamentals of creating innovative jobs, in the Southern Mediterranean, which can be generated by strengthening regional integration, developing trade exchanges and know-how and increasing the environmental component of investments in the Southern Mediterranean.
The Innovation and Entrepreneurship Workshop – Scope & Focus “Ideas can be life-changing. Sometimes all you need to open the door is just one more good idea.” Jim Rohn
Entrepreneurs are one of the main actors responsible for the high growth start-ups in the South of the Mediterranean, providing the opportunity to generate jobs needed in the area. These entrepreneurs are a crucial element for the economic development of the region with their capability to manage complex business relationships across cultural and linguistic boundaries. Science parks, innovation centers and business incubators are the natural playgrounds of supporting innovation and entrepreneurship activities. The workshop aimed at enhancing collaboration and the transfer of knowledge and best practices among innovation stakeholders and entrepreneurs in the Mediterranean. The project brought together the various stakeholders in the entrepreneurial ecosystems of the countries represented through the participants. Young, highly skilled entrepreneurs from JCI partner organizations based in Lebanon, Syria, Jordan, Egypt, Morocco, Algeria & Tunisia joined the 4 day program in order to discuss entrepreneurs’ perspective on Mediterranean innovation, to share knowledge and to provide answers to common problems. The main goals of the workshop were: 1. To foster mutual learning and harness best practices among Mediterranean entrepreneurs. 2. To enhance collaboration and transfer of knowledge and best practices among innovation stakeholders and entrepreneurs around the Mediterranean. 3. To provide the participants with a comprehensive overview of what it takes to be an “innovation” entrepreneur in the Mediterranean region. The participants’ backgrounds ranged from academic students to professionals with either an idea for an innovative venture or a newly established startup. The ideas and concepts discussed covered a wide spectrum of market sectors such as industry, banking, trade, education, services, information, environment, energy, and others. 10
The topics covered were varied in nature and scope and discussed the mechanisms of promoting and developing entrepreneurial capabilities through a thriving small and medium-sized enterprise sector, developing a business plan and the basics of company setup and structure, strategy and alternatives for financing. Outcomes of the workshop focused on giving the participants a comprehensive view of the environment in which they would be expected to succeed while highlighting the following issues: Risk factors involved in innovation and entrepreneurship Know-how to organize the critical tests for evaluating probability of success at each stage of development of the innovation process Identification of ways to promote and develop entrepreneurial capabilities through a thriving small and medium-sized enterprise (SME) sector. Mastering the marketing and financial aspects of innovation and entrepreneurship in order to reduce the risk of failure Understanding the major barriers to innovation in the region, such as: legal frameworks, academic-industry relations, the financing of innovation, intellectual property rights and restrictions on foreign investments
The methodology adopted during the workshop centered around several presentations, interactive workshops, discussion sessions, in addition to a site visit to Berytech where a panel of entrepreneurs took place and the participants learned from innovative entrepreneurs. Towards the end of the workshop, panels of entrepreneurs and testimonials of innovative and successful entrepreneurs were organized, a case study was discussed in depth with the relative entrepreneur on hand to interactively answer questions and address concerns, all concluded with a useful wrap-up session.
The training and workshop curriculum was determined in collaboration between JCI Lebanon and EIB based on JCI Lebanon’s existing partnerships with top trainers and successful entrepreneurs in the relevant fields explored.
Entrepreneurship “Entrepreneurship is neither a science nor an art. It is a practice.” Peter Drucker “The ones who are crazy enough to think that they can change the world, are the ones who do.” Steve Jobs
Entrepreneurship: a definition Entrepreneurship is a mindset; it’s not a job or a company that someone has built. Entrepreneurs are people with a vision and a dream; they are agents of change who want to make things happen innovatively, in a new and different way. In short, they want to change the world.
Entrepreneurship is therefore the mindset that allows an ordinary person to look at the usual world around them and find unusual alternatives and possibilities for solving problems and finding solutions that others could not see. Being that lone person that needs to steadfastly believe in their vision against all odds and most specifically defend it against the negativity that will accompany the introduction of a new idea, concept or product; they will also need to come up against the rejection of the change they propose and the upheaval of the status quo while trying again and again to make their vision a viable reality. Obviously, it would take a special kind of personality to accomplish all of that.
Entrepreneurs: the profile “All people are entrepreneurs, but many don’t have the opportunity to find that out.” Muhammad Yunus
During a highly interactive session, the participants of the workshop generated a list of characteristics of a successful entrepreneur based on their personality traits and the characteristics they used to accomplish their ‘entrepreneurial’ activities. An entrepreneur: 1. Has courage 2. Has passion 3. Embraces challenges 4. Succeeds with the business 5. Is adaptable to change 6. Is a risk taker 7. Is resourceful 8. Is collaborative 9. Is open to partnership 10. Is an initiator 11. Is a problem solver 12. Has a vision
13. Accepts failure 14. Is a fighter 15. Has good communication skills 16. Has integrity 17. Is proactive 18. Is street smart 19. Is patient 20. Is open to criticism 21. Is creative 22. Is a leader 23. Is knowledgeable 24. Is a coach 25. Is up to date 26. Is smart 27. Is optimistic and a positive thinker
Further discussions and research yielded these insights into the characteristics of successful entrepreneurs. An entrepreneur is also: 1- A person who needs to achieve 2- Tolerant of ambiguity 3- Self- confident 4- Innovative 5- Aware of opportunities 6- Competitive 7- Able to know when to stop
Additionally, the entrepreneur has a strong desire to realize his vision and will persevere to see it through. He is a self-motivated, highly energetic go getter who has ambition and understands markets through his developed commercial awareness. He thrives on uncertainty, is persuasive, self-disciplined and a problem solver that is mission driven.
Innovation “You can’t ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” Steve Jobs
What is innovation? Innovation in its simplest definition is doing new things, doing things differently. It covers the full spectrum of the value chain from Product Innovation to Process Innovation to Organization Innovation to Marketing Innovation. According to US – National Innovation Initiative, the intersection of innovation and insight leads to the creation of social and economic value.
« An innovation is the implementation of a new or significantly improved Product (Good or Service), or Process, a new Marketing method, or a new Organizational method in business practices, workplace organization or external relations» OECD – Oslo manual third edition.
Innovation is transforming all businesses as it can even be applied outside management and technology in such diverse fields as arts and economics. Anything markedly different can be said innovative. More firms are realizing the importance of innovation to gain competitive advantage. “The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy.”1 Within this definition, innovation can happen in many ways. The result of innovation is producing value added. Whether it is increases productivity, lowers costs, finds new markets, or increases market share, innovation leads to exponential growth. The value chain producing the new product or service is more compelling than that of a value chain that produces margins generated by commercial value. Only innovative businesses will be able to grow exponentially and generate substantial value and new jobs.
Basic Pillars for Innovation (figure 1) – Presidency of the Council of Ministers, Lebanon
SAXENA, Rajan, (2002); Marketing Management, New Delhi, Tata McGraw-Hill P.429
Why innovation? The present economic transition and increased competitiveness of the southern and eastern countries of the Mediterranean are key issues regarding sustainable development, faced with the challenges of job creation, sector diversification and adaptation to change. During the financial crisis, most Mediterranean countries showed remarkable resilience. They now have to seize all available opportunities to stimulate new growth, modernize their economies and create jobs because of the high level of unemployment in skilled people and because a great number of young people will enter the labor market of these countries in the coming years (60 million up to 2030). The IT1 program is particularly useful in those circumstances. Indeed, it can help Mediterranean partner countries get a better leverage on long term credit for the Knowledge Economy and take better advantage of the technical assistance that could be provided through a transfer of know-how.
Mediterranean region “If you always do what you’ve always done, you’ll always get what you’ve always got!” Alan Scott “In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.” David Ogilvy The southern and eastern Mediterranean market has a GDP of US $1 trillion and a population of 270 million. The economic mood is improving, with investor confidence on the rise despite the global crisis that started in 2008. The region’s strong points are taken into account by European partners: major infrastructure projects are under way in all countries, stable currencies support growing markets, the banking system avoided toxic investments in
some countries and a well-educated middle class is emerging with a highly promising 20-to-35-year-old population. All this makes Mediterranean countries a potential source of growth and competitiveness, owing to their (still) relatively lower-cost skilled workforce. However, the Mediterranean countriesâ€™ economic situation remains a challenge. In most countries, the productive system is mainly populated by small enterprises with a strong specialization in low- and medium-technology sectors. With few exceptions, industry lacks depth and an international dimension. Most domestic companies do not meet international standards. Because small and medium enterprises (SMEs) face obstacles to development (infrastructure, financing, trade barriers, red tape, weak internet service), they cannot easily contribute to growth and job creation. Entrepreneurship, innovation and university-industry relationships are limited. This explains the relatively weak position of Mediterranean countries in world trade. Southern Mediterranean countries do not have major comparative advantages. To increase their productivity and efficiency, companies need to increase their interaction with innovators, technology experts, management and funding advisors. In recent years, innovation poles have appeared throughout the Mediterranean region. The issue now is to transform these initiatives so that they benefit the countriesâ€™ economy sustainably.
Entrepreneurship: the ecosystem For entrepreneurs to succeed and focus on their vision, people are needed to help them along the way. People are needed to believe in them, mentor them, finance them, and make it possible for them to work and dream. This is where the entrepreneurship ecosystem comes into play. The components of a sample entrepreneurial ecosystem that is present to some extent in all the countries that participated in the workshop can be broken down to main players or stakeholders. For the sake of illustration, we will focus on the Lebanese entrepreneurial ecosystem and its players which interact through a grass root, demand driven approach. On the financing side, it is worth mentioning that in 2000, the Lebanese government established Kafalat, a loan guarantee private company that has a loan specifically tailored for innovation businesses. The private sector and NGOs have since moved to populate this ecosystem. This process is unique in the Middle East region. The figure below depicts the main players of the Lebanese entrepreneurial ecosystem.
The Entrepreneurial Ecosystem (Figure 2) â€“ Presidency of the Council of Ministers, Lebanon
In subsequent sections of this booklet, we will focus on some of the players deemed critical as identified in the exercise of defining the challenges that entrepreneurs face in the Mediterranean region. For now, we will highlight the role that incubators play in providing general support services: mentoring, training, consultations, networking, promotion and information: Training: Concepts of Strategic Management, Projects Management, How to build Business Plans, Feasibility Studies, Marketing and Market analysis, Legal aspects for establishing companies, Other subjects like intellectual property, and legal issues related to ICT projects specifically. Advisory, and consultancy experts and consultants play the role of mentors. Linking incubates to sources of funding. Networking
Incubators and incubation services enable the transition of innovative ideas into competitive products and services. In Lebanon, Berytech plays a determining role in the entrepreneurship ecosystem: - Inspire entrepreneurs in technology and offer innovative solutions (through: communication campaigns, universities roadshow, and participation in local regional and international events). - Support technopreneurs, startups and SMEs in an environment conducive to the creation and development of enterprises, through incubation, business support, counseling, funding, networking, mentoring, and company hosting, hence taking part in the economic revival of the country, participating in wealth and job creation, and retaining graduates and high-level skills in Lebanon. - Several pioneering activities: Incubation Awards, entrepreneurship contests, summer schools & regional academies for entrepreneurs, "from idea to startup" courses to engineers, Micro-Enterprise Acceleration Programs, university roadshows, local & international exhibitions & workshops, Entrepreneurs Forums, startup-weekends, mentoring programs, networking events, lunch-debates, gala dinners, etc.
- To date, Berytech has housed more than 150 entities, assisted more than 2,000 entrepreneurs through outreach programs, disbursed more than US $350k in grants to startups, and invested more than US $5M in Lebanese technology companies. It was the first in the region to receive the EU accreditation of Business Innovation Center (BIC), opening up access for its companies to international networks. - Berytech grew from one technology pole in 2001 to another in 2007, and then the creation of the first venture/seed fund for technology startups in 2008. Recently, Berytech launched a media cluster in Lebanon as well as a 3rd building entity in Beirut Digital District, supporting more entrepreneurs and startups. In 2013, a new fund is being raised to provide financial support to small businesses. Other players in the Lebanese entrepreneurship ecosystem that must be mentioned include (but are not limited to): Bader Lebanon. Bader is a not-for-profit organization with a mission to provide the necessary tools for the successful launching and development of high impact entrepreneurial projects in Lebanon with the aim to promote national economic development and job creation through education, finance and networking. Endeavor Lebanon. Endeavor is a not-for-profit organization leading the global movement to catalyze long-term economic growth by selecting, mentoring and accelerating the best high impact entrepreneurs from around the world. The Mowgli Foundation is a leading mentoring organization operating across the MENA region. Its mentoring program supports entrepreneurs’ development by providing trained mentors to inspire, support and empower them in achieving their business and personal potential. The Lebanese entrepreneurship ecosystem is relatively young but is highly active and dynamic. Every year, in November, and for a 2-week period, all the stakeholders and entrepreneurs come together as part of the Global Entrepreneurship Week – www.gewlebanon.org . This provides a great opportunity for aspiring entrepreneurs to meet with all the players that can help them and for startups to gain exposure and the possibility of obtaining additional financing.
Challenges & Opportunities During the course of the 4 day workshop, the participants, with the guidance of their mentors and trainers uncovered several common challenges faced by innovative entrepreneurs in Lebanon, Syria, Jordan, Egypt, Algeria, Morocco & Tunisia. Unfortunately and due to the makeup of the region, the challenges outweighed the opportunities. Nevertheless, as entrepreneurship is all about beating the odds and sticking to a vision until it materializes into concrete results, with the help of the various stakeholders of the sample entrepreneurial ecosystem previously discussed, the opportunities, although few, are quite worthwhile.
The challenges “I can accept failure, everyone fails at something. But I can’t accept not trying.” Michael Jordan
In addition to the risks inherent to the process of creation of innovative companies, other factors interfere in the failures and shortcomings of such endeavors on several levels, including: • The lack of legal and organizational frameworks suitable for innovation and economical technology transfer. • Skills at the level of assessment and business assistance are insufficient in quantity and quality. • A very limited access to sources of financing for the initial phases of projects. • The dearth of autonomous incubators. • A dominant culture in universities that is not very open towards entrepreneurship.
Based on these observations, it is obvious that the ecosystems in question are far from being sufficiently equipped to facilitate the dual transformation of ideas into successful and competitive innovative businesses, and of incubates into real entrepreneurs. In spite of the Mediterranean region’s early contributions to science and culture as well as the spirit of initiative and exploration, the majority of Mediterranean countries do not currently play a leadership role in technological innovation. Furthermore, technology commercialization requires adequate access to capital given the uncertainties surrounding the innovation process and the fact that early development of new products generates few and often, no profit.
Bridging the financing gap is therefore crucial for new firms and the development of innovation projects. As per the figure below, there exist major funding gaps pertaining to the early stages of the innovation process when, incidentally, it is the most crucial time to obtain funds to concretize the business or process. A very shy pool of angel investors are attempting in some countries in the region, through incubators and technopoles, to bridge the first gap but the major reliance at that stage is still on family and friends’ participation.
Funding Gaps (Figure 3) – Presidency of the Council of Ministers, Lebanon
Other challenges faced by innovative entrepreneurs include the cultural aspect of a general traditional view of self-employment as being a second level option for professional success and prosperity and where government employment is still considered the ‘ideal’ first choice. Academically, this cultural challenge is felt to a lesser extent as a still limited number of centers for entrepreneurship are emerging in universities. Furthermore, due to its lack of visibility on the horizon of traditional business culture, there is a massive need to support R&D initiatives whether on the academic level – by creating awareness and research for this need, or through government programs and incentives.
Legal, fiscal and intellectual property protection issues are prevalent concerns of entrepreneurs in the region due to opaque government structures and policies and the deficient communication of the very few innovative initiatives available. Additionally, bureaucratic red tape and the challenges of infrastructures and the complex processes of company setup critically impede the speed and agility that should be the hallmark of any innovation that plans on becoming viable commercially.
Challenges also exist for incubators in the region: o Lack of national innovation policies o Gaps in the regulatory and legal infrastructure to support incubation, innovation and entrepreneurship o Scarcity of funding sources outside traditional banking sectors o Reliance on undependable infrastructure
The opportunities “One doesn’t discover new lands without consenting to lose sight of the shore for a very long time.” Andre Gide
Being an entrepreneur in the Southern Mediterranean region is definitely a challenge but it can be met successfully by the creative and resourceful ‘innovation’ entrepreneur. Historically, the greatest asset of all the countries involved has been and still is centered around their human capital and this is where the focus should be. On developing the skills needed to become better equipped entrepreneurs with workshops such as the one this booklet is based upon. Additionally, initiatives such as the Innovation and Entrepreneurship Workshop can create opportunities for constructive exchanges and productive streamlining of common issues and known solutions on a regional basis and could ultimately provide greater exposure and market reach for ‘innovative’ businesses.
From the workshop, the participants gained a wealth of connections, assistance and knowledge: 1. The workshop successfully added much to the participants' knowledge about innovation, financing and funding of projects. 2. The workshop highlighted the challenges faced by startups and young entrepreneurs and offered some solutions to overcome these challenges. 3. There is a need to bridge the gap between research and industry. 4. Research, good planning and innovation are key elements for the sustainability of any project. 5. Knowing how to invest technology saves time, effort and money. 6. The idea is not enough; taking appropriate action is needed. 7. Marketing research should be done and tools for market risk analysis should be obtained.
Additionally, geographical and cultural proximity to Europe, the important community of Mediterranean-born scientists based in Europe, and migration flows of workers, tourists and students give entrepreneurs from the region the ability to play an excellent role as adopters of technology developed elsewhere through their absorption of technologies.
Conclusion â€œIn the realm of ideas everything depends on enthusiasm. In the real world all rests on perseverance.â€? Johann Wolfgang von Goethe
The group of entrepreneurs from the Southern Mediterranean region came up with some conclusions and thoughts based on their exchange of best practices and know how while learning new concepts and refining old ones with the help of world class trainers and mentors. Some of the topics discussed and covered during the Innovation and Entrepreneurship Workshop include:
1. “Unleash the Innovation & Entrepreneurship in Mind”. Challenges that face entrepreneurs; probing questions and comments about innovation, success and failure highlighting the concepts of passion, determination and experience were discussed. A list of characteristics of an entrepreneur was generated by the participants (refer to the section about the characteristics of an entrepreneur). 2. “Scientific Innovation among Arab Youth” the session focused on innovation and invention. Science based innovation was stressed and one of the recommendations was that entrepreneurs should collaborate with Arab scientists and researchers as this blend makes for great success. The Stars of Science program was presented. The program phases are: a. Proof of concept: validity of the novel scientific feature b. Product engineering: functioning product prototype embedding the proven concept c. Product design: packaged prototype towards a professional product d. Business and marketing: feasibility and marketability of the packaged product based on a business plan. Also the idea of taking advantage of all the scientific research and studies by bringing them into the market through entrepreneurs was highly recommended. The importance of the role of media in the Arab world and the credibility of inventions and intellectual property were highlighted. Finally, the need for having a culture of producing in the Arab world, encouraging women working in the field of science and technology in addition to establishing a patent system were the concluding comments of this session. 3. “The importance of Innovation and how to measure it” Linking innovation and entrepreneurship policy and the need to develop entrepreneurial capabilities through a thriving small and medium-sized enterprise (SME) sector: Innovation Strategies and measurements were presented. Most importantly the Buyer Utility Map was discussed and the innovation types were presented. Any innovative project should be entertaining, user-friendly, useful, safe to use, and environmentally friendly. Also the participants learned the difference between making things better and making better things. 4. “Accelerating your innovation” entrepreneurs should think as artists and act as leaders. Also, the importance of having an innovative idea and applying it was discussed. When the idea is not launched yet, it is called creativity; once it is launched and executed into a proper business that will generate profit, it becomes innovation. The brain (represented by a quadrant) is divided into 4 parts representing people's characters as: investigators, evaluators, creators, activators. 29
Therefore, the 4 parts of the quadrant should be used in order to move from creativity to innovation. Moving to another main idea, a survey statistic showed that 80% of customers are not sole brand loyal that’s why you have to be more and more innovative to keep them. There are several types of needs: - Explicit needs: expressed needs – specified (required and desired) – tangible - Implicit needs: implied needs – (essential and taken for granted) - Basic - Latent needs: unanticipated – (surprise) – intangible Moreover, the best characteristics for innovations were listed as follows: - Sustainability of the idea - ROI and ROO - Technically friendly - Consumer target - Uniqueness - Performance - Consistency with the image and vision of the institution - Compliance - Talent What inhibits or blocks your ability to be creative or innovative: Lack of time and Lack of tools. Successful entrepreneurs have dominant characteristics: Drive/ Passion Thinking ability Aptitude for human relations Technical ability The journey of innovation goes through 4 phases: Investigating needs, creating, evaluating and activating. Finally, market research has to be done before launching an innovative idea. 5. “Intellectual property and patents & Innovation and risk” Discussion of key questions from the themes including: how do companies organize to relate to new innovation processes; how to innovate in alliances and with customers; and how entrepreneurship contributes to innovation. First a presentation about Berytech technology incubator was made. It supports technological entrepreneurs. They provide high-tech environment and the facilities to benefit from assistance in the enterprise, business plan feasibility study and expanding activities etc. Then, intellectual property treaties, laws, registration procedures of IP, patent, trademarks, and enforcement activities were presented.
6. “How to create a successful Business Plan” The business plan: Translates the dreams of the entrepreneur into a map to follow; is not a collection of spread sheets with a financial forecast; is the tool which convinces investors to part with their money; is a selling document The key elements of a good business plan: POCD People (only if a key person make them partner) Opportunity Context (there may be things that happen out of your control) Deal Entrepreneurs should do things they know and they should know the things they do. They also have to have an idea that is faster, better and cheaper. Good entrepreneurs should calculate the risks. To start a business you should have a market. The business you have in mind must have the biggest market. If you can do your business over the internet the world is your market. 7. “Human Communication Model” Awareness while communicating is the first step to change. Communication is verbal and non- verbal so make sure you communicate using all the aspects. When you are selling, communicate successfully. If you want to change people’s minds you have to influence them. People do not like to be persuaded, they like to be convinced. 8. “A case study” entitled The Little Engineer. It covered the ideas of having the motive to start a business, the importance of having an innovative factor in a business, the procedures for implementing any business, the challenges and overcoming them and the importance of branding and having a trademark. 9. Presentation of the IT1 program “Fostering Innovation, Supporting the Promotion and Financing of Innovation in the Mediterranean” FEMIP 10. “Finding the right investor for your start-up” Developing the basics of company setup and structure, strategy and alternatives for financing. Some resources of financing were highlighted and the differences between angel investors and venture capitals were discussed. Tips on dealing with investors were offered and some mistakes were mentioned some of them are: 1. 2. 3. 4.
Complicating the formation process Failing to address founder equity Dwelling too long on valuation Failure to raise enough money 31
5. 6. 7. 8.
Spending money too quickly Failing to pick the right advisor Failing to protect intellectual property Failing to set up corporate structure
11. Marketing Strategies & Social Media; Commercialization procedures: technology marketing, technology valuation Entrepreneurs are encouraged to adopt social media because it is: 1. Measurable 2. Cost effective 3. Instantaneous 4. Adaptable 5. Always on 6. Focuses on social 7. Interactive medium Social media marketing strategy outline Step1: current assessment (online SWOT) Step2: competitive assessment Step3: strategy overview Step4: social communication plan Step5: social strategy implementation Step6: social strategy timeline Define objective and goal Identify target audience: different audience; different jargon and language Identify channels to use Define strategic approach Identify the KPI (Key Performance Indicators) Final tip: Extract the best strategies of your competitors online marketing 12. "How to Network and your 60 seconds pitch" success factors were highlighted as:
Passion: what could you do all day, every day with a big smile? Vision: what needs to be done differently in the world? People: who would you hire if you could hire anybody? Culture: how would you treat people if it was up to you? Failure: could you fail and still believe in yourself
An effective elevator pitch is characterized by the following: No more than 60 seconds Starts with a powerful first sentence Highlights your management team’s competence Contains a crisp value proposition and succinct differentiation Includes a few key numbers e.g. market size, growth, revenues Mentions investment opportunity and the exit Avoids false claims e.g. “ killer app with no competition” Avoids techno-babble and product/ service details What are investors looking for? Focus What issues/ problems you solve USP (unique selling propositions) Customer acceptance Experienced and motivated team Executive summary is KEY No complications Visibility and control Return on investment/ exit strategy Various learning points were gleaned from the several sessions: 1. An entrepreneur should share knowledge, know how to reach people, learn and know how to measure innovation. 2. Entrepreneurs should protect their intellectual property, create a successful business plans and communicate successfully with investors and clients. 3. Entrepreneurs should know their resources, find alternatives for financing, overcome challenges and keep learning. 4. Entrepreneurs should have correct marketing strategies, network with the right people and put their ideas into action.
The discussions of the different groups during the wrap-up session came with a list of reflections that they shared and will use to channel their energies and efforts into making their innovations a reality.
Reflections: Sharing your idea; dare to share An entrepreneur is a person who needs to achieve Success is hard earned This workshop provided tools to fill gaps in our projects In addition to your business knowledge; you need communication skills Think outside the box Internal energy was rediscovered I acquired skills to better approach potential investors Acquired convincing techniques to promote my idea Learn to earn and not learn to learn Education is not enough, we need practical know- how The importance of the value added in my idea Do not depend on one revenue stream only We better understand the value of partnership in business Think as an artist; act as a leader Know your industry before launching your project We liked the innovation strategy concept Luck does not exist in business The importance of positioning my product or service on the innovation maker The importance of a scientific proof of concept and its respective intellectual property You have to be the marketer of your idea The importance of the element of positive surprise The importance of being able to read my financial records Choose smart investors The key elements of a good business plan; the team, the market and finance The harmony of the session in the workshop Our new project should be faster, cheaper or better Innovate or evaporate Having an idea is not enough; you need the skills, the support & the innovation Not every idea is an invention; not every invention is a product The relation between the investor & the entrepreneur should be built on trust The most successful business is when the market needs meet your passion and desire Hire A and A+ employees
Recommendations “You won’t get anything unless you have the vision to imagine it.” John Lennon
Some recommendations came as a natural inference from the observations of the participants and the activities of the workshop in addition to the expert advice and input of the organizers and trainers:
To strengthen and consolidate ties, incubators in the different Southern Mediterranean countries should join efforts to a form a network that is the catalyst for mutually beneficial interactions between their respective startups, while investors can partner to explore cross-border &/or regional investments.
Setting up a Mediterranean innovation portal could lay the foundation for a broad Mediterranean entrepreneurial ecosystem that can build upon the programs initiated by organizations that have regional reach such as JCI, EIB and CMI. A pre-feasibility study could be carried out on an innovation portal to disseminate information, support innovation, and promote collaborative projects.
From a broader perspective, facilitating international visibility and partnership for startups in the Mediterranean region will create more opportunities for them to locate partners who can help them overcome local challenges.
It is important to concurrently encourage cultural exchange to develop innovation. Stronger ties inside a collaborative Mediterranean-wide ecosystem would also accelerate the pace of change and jumpstart social impact and stimulate economic growth throughout the region while creating greater overall value.
A renewed Mediterranean identity and branding could include a combination of quality of life, cultural values, exceptional sites, and natural products. Such a positioning implies the incorporation of more technological and innovation content in the Mediterranean production processes.
Given the constraints (money, availability of leaders, innovation gaps), a Mediterranean innovation strategy needs to rely on a double effort: the creation of a Euro-Med innovation and R&D community at an international level, and, at a country level, innovation poles to nurture the industrial fabric. The latter, and the private companies they support (mostly SMEs), are the key to innovation and technological progress.
To link incubation and dissemination of entrepreneurial culture in universities. To coordinate the incubation policy in universities with the development of the entrepreneurial culture training.
More intelligent and innovative national schemes are need to promote innovative entrepreneurship where all stakeholders (Private, governmental and civic and academic) work together to bridge the structural, cultural and financial gaps that impede the development of innovation and entrepreneurship in the region.
Identification of legal and regulatory obstacles to innovation systems to enable Mediterranean countries to pinpoint the legal, fiscal and regulatory aspects that needs to be targeted for improvement so that they can be included in governmental agendas. Clarify the issues related to intellectual property management between incubates, incubators and universities, and motivate researchers through royalties.
To review and diversify financial resources and tools to overcome the financing gaps at different stages of the development of young innovative businesses. Possibilities include: the launch of a national program for financial support in the form of grants dedicated to technological development projects with high potential economical.
All the participants will be part of IT1 workspace on the CMI website “The Agents of Change in Innovation” which aim to create the first trial of IT1 online platform and make it available for the community of agents of change in innovation in Euro-Med.
JCI will promote and advance the IT1 program goal (Supporting the Promotion and Financing of Innovation in the Mediterranean) through its upcoming activities in the Southern Mediterranean region.
Further organization of training programs, conferences, workshops and awareness-raising sessions, in joint collaboration between the EIB-CMI and JCI, for supporting innovation and entrepreneurship, to train and ensure knowledge-sharing between decision-makers and operational managers on topics of common interest.
The positive regional impact of the Innovation end Entrepreneurship Workshop was such that serious consideration should be given to turning it into a yearly initiative where young innovative entrepreneurs from the broader Mediterranean ecosystems can meet to continue bridging knowledge and know-how gaps while solidifying a culture of exchange and the embracing of the new and different ways of doing things. JCI Lebanon would be a prime candidate for hosting such a yearly event.
Final thoughts ”INNOVATION is the specific tool of entrepreneurs, the means by which they EXPLOIT CHANGE as an opportunity for a different business or a different service.” Peter F. Drucker
“What we have before us are some BREATHTAKING OPPORTUNITIES disguised as insoluble problems.” John W. Gardner
This booklet was produced by JCI Lebanon in collaboration with JCI Syria. It is based on the results of a joint CMI–EIB-JCI Lebanon Workshop on “Innovation and Entrepreneurship in the Southern Mediterranean” which was carried out in April 2012 Beirut, Lebanon. For further information or a more detailed insight into the challenges and opportunities of Innovation & Entrepreneurship in the Mediterranean, please contact JCI Lebanon at email@example.com