THE ABRAHAM ACCORD: CREATING A VIRTUAL MENA ECOSYSTEM
Israel and the UAE may at first sight not have many things in common, but one is their small size: Israel has a population of 8.6m and the UAE 9.7m. Yet their diminutive size belies their importance in the tech world, and the recent political agreement opens up huge opportunities both within the region and globally.
There is no universally recognised set of criteria that enables one place, and not another, to develop an ecosystem that nurtures innovation and a mass of start-ups. Northern California in the 1960’s brought together technical skills nurtured in the defence industry with a culture, or rather a counterculture, that accepted individualism and risk-taking. The Bay Area has changed in the last sixty years, yet the ecosystem has remained, pulling in talent from Asia, and maintaining momentum although in a high-cost economy.
Israel has developed an equally resilient ecosystem, but it is beginning to suffer from a shortage of skilled programmers, with start-ups crowded out by global companies, and is increasingly dependent on outsourcing to India and countries of the Former Soviet Union and Eastern Europe. The country’s political isolation, despite relations with both Egypt and Jordan, has forced companies to look far afield for programming, and for markets. Israel has its strengths, (claiming to have more start-ups than all of Europe), but also its weaknesses.
Alongside the announcement of the $3bn Abraham Fund, with trilateral investing by the USA, UAE and Egypt, the economic significance of the Abraham Accord will be seen at this December’s Gitex, Dubai’s annual tech trade fair, and one of the largest such gatherings globally. Dubai has become a marketplace without parallel, with its own tech ecosystem, pulling in entrepreneurs from the region and providing access to funds. It is the hub, within affordable reach, for the Levant, North Africa, Egypt, Saudi and South Asia. For the first time, it will be possible for Israeli companies, and funds, to become directly familiar with the region’s startups, and its source of investment funds. We will be taking a group of over 20 Israeli venture capital funds for the fair.
A cynical outsider might view the biggest opportunities being in cyber, but the long-term growth may be in the two areas of greatest need for innovation in the region, healthcare and agriculture. It is here that the real significance of the Abraham Accord will be seen.
For the Mena Technology Fund, the Abraham Accord underpins the very thesis of the fund.
MENA Investment Partners LLP is an appointed representative of Midmar Capital LLP, the manager of the fund,
which is authorised and regulated by the Financial Conduct Authority.