Posted on 2/11/2016
Tech has grown in prominence as a key sector in global economic health. It is now commonly accepted that an economy in which entrepreneurs have the freedom and resources to create and innovate tend to perform much more robustly. Intriguingly, one study on the effect of tech on a country’s economy has said that there is a much greater positive spillover effect than has been widely thought1.
The world has entered the new dawn of the technology era. Sure, we’ve had major waves of technological advances since the start of the Industrial Revolution in the late 18th century4. But nothing like this.
Artificial Intelligence, the Internet of Things, Robotics and Automation are set to disrupt the entire world, with virtually every major sector already recently disrupted by technological innovation. It is a safe bet to assume that global tech is set to grow exponentially. The bottom line is that tech has already demonstrated its crucial importance to economic health, which is only set to increase.
What this means is that more than ever, tech entrepreneurs will be needed in this new tech-driven world to power economic growth.
Tech entrepreneurship in Iraq: Breaking the country’s dependence on oil
The oil sector has not been reliable since 2014, with prices fluctuating wildly. So long core for the Iraqi economy, the country can no longer depend exclusively on the fuel. What has occurred in global oil markets in the last few years is a warning that Iraq must pay attention to.
Iraq is so dependent on the fuel that the government, recently asked for the country to be exempt from the OPEC production cut agreement5, as it is desperate to produce as many barrels of oil as it can.
Tech entrepreneurship can break this dependence and help the economy to grow in ways that the oil sector, crucial as it has been for Iraq for so long, can never achieve.
How have other countries benefited from a booming tech sector?
In the U.S, the tech sector accounts for 7% of GDP and employs almost 7 million people2. In the UK, tech accounts for 8% of British GDP3. In these countries and indeed around the globe it is set to grow further, both in developed and developing economies.
For countries with struggling economies that are eager to grow, let’s take Ireland as an example. Before the Celtic Tiger years of the mid-90s to mid-2000s, Ireland was a relatively poor country marked by its mass emigration and poor economic performance.
It transformed itself into a high-tech economy in a mere matter of years, and with this change, its entire economy benefitted as a result. A side effect of its tech sector has been the creation of a strong entrepreneurial spirit at home, and Dublin is well on its way to recovery from the effects of the Global Financial Crisis. It is difficult to imagine that this recovery would have occurred were it not for Ireland’s tech sector strength.
Frontier markets that have benefited from a growing tech sector
There are many examples of developing countries that have developed flourishing tech sectors, which have in turn galvanised their economies. Perhaps the most striking example is Lebanon. In 2010, starting a tech startup there was unheard of, but they are now the hottest companies in the country.
Lebanon has had to develop its tech sector in spite of challenging circumstances, including woefully inadequate infrastructure as well as funding issues and political instability. Incredibly, it was recently named as one of the world’s top 20 countries for entrepreneurship6. There are now over 300 tech startups in Lebanon, creating thousands of jobs and positioning the country to become a regional tech entrepreneurial leader in coming years.
Other Middle Eastern countries to benefit from a growing tech sector include Jordan and Iran. Saudi Arabia is turning its attention to developing its own tech sector and moving away from its own dependence on oil. In Jordan, the tech sector has truly rejuvenated the economy, making giant strides forward regarding employment, economic growth and helping the country to realise its growth potential7.
Much of Sub-Saharan Africa has also become known for its tech credentials. Kenya stands out. The African nation is now recognised as an authentic tech hub.
How will Iraq benefit from a strong tech sector?
Essentially, what a tech sector does for an economy is create jobs and opportunities, build a reputation for innovation for its host cities and countries, and attract foreign investment as well as foreigners with elusive skill sets.
Entrepreneurship breeds more entrepreneurship. Not only does it attract entrepreneurs and investment from foreign countries, it breeds an infectious business mind-set at home. Innovating takes on a snowball effect and business idea generation leads to further ideas. Tech has already demonstrated that it is the sector that best facilitates this progression and it will provide the key for a new Iraq that can flourish economically.
The Iraqi economy would benefit from a strong tech sector by:
- Creating jobs
- Attracting foreign investment to the country
- Building a reputation for innovation
- Creating a demand for digital technology skills and therefore education programmes that can equip Iraqi people for the new tech-driven world
- Encourage an entrepreneurial spirit in tech and other sectors across the country
What type of jobs can a tech sector create?
Tech companies need an array of highly skilled and educated workers. First, they need people to perform tech-related roles. These include programmers, coders, developers, engineers and systems analysts.
Later on, they need employees or freelancers for various roles in sales and marketing. Marketing now includes various tech-related roles. A company’s marketing strategy needs skilled workers specialised in search engine optimisation, analytics, designers, copywriters and so forth. As a tech company grows, they will require workers for human resources needs as well as finance and perhaps a few other departments depending on the specific tech sector.
The potential for job creation is simply enormous. Moreover, it helps young, recent graduates to get on the job ladder. Startups often recruit interns and younger workers as well as more seasoned professionals. It gives young professionals the opportunity to gain experience and learn valuable skills in the real working world.
Egypt is another Middle Eastern country whose flourishing tech sector is driving economic growth. In 2014-15 the Egyptian tech sector created more than 100,000 tech sector jobs. The government expects the sector to employ another 250,000 workers over the next six years8.
How can the Iraqi government help to develop a tech sector?
The Iraqi government is largely occupied with national security problems as well as navigating the fluctuating prices of oil. But, if it were to turn some of its attention to helping an Iraqi tech sector to develop, it would help the country in a holistic way.
It can help by looking into ways to introduce training programmes to equip the unemployed with the skills that a tech sector would need (and which the modern working world needs). It could reach out to international partners for assistance in research and development as well as for investment loans.
Let’s take the Egyptian government as an example. It has committed to on-going investment in growing its tech sector. It has devised an extensive strategy to advance tech growth, including nationwide training programmes, improving infrastructure and business needs such as internet access, as well as raising funds to invest directly in the sector.
Government involvement is so important for a nascent tech sector to take form. And right now, a growing tech sector is precisely what Iraq needs.
3 – We are the 8%