Reach for the stars

The UAE's Arab Science and Technology Foundation is hoping to bring technological innovation back to the region.

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By  Eliot Beer Published  September 23, 2007

The Middle East has been a centre of trade, technological sophistication and advanced learning since the dawn of history - early Muslim philosophers and scientists took the learning of the Babylonians and Greeks, and transformed it into the foundations of modern mathematics, scientific method, observation and astronomy.

But the global shift of development towards Europe and, latterly, the New World, saw scientific development move away from the region. The discovery of oil in the first half of the 20th century hastened the demise of serious regional scientific advance, as Middle East states had a dependable and lucrative source of income.

Now, however, development is returning en masse to the region - governments and business leaders have realised that oil wealth is a fickle creature, and that having a diversified economy can help absorb the shocks of oil price fluctuations. This has lead to massive investment in real estate, infrastructure, hospitality and tourist-related development, and industry-specific projects around the region, such as Dubai's TECOM developments, or the Economic Cities in Saudi Arabia, or financial or energy-related sites in Bahrain and Qatar respectively.

While these developments are proving very successful at attracting outside investment and persuading multinational companies to set up in the region, the emphasis has been on these external players - what has been missing is home-grown talent.

In recent years, a number of initiatives have sprung up to address this issue - among them projects such as Dubai Silicon Oasis. One leading initiative has been the Arab Science and Technology Foundation's (ASTF) programme to encourage regional technology start-ups.

For the second year, the Foundation has teamed up with Intel to offer a prize to Middle Eastern technology entrepreneurs, with the aim of encouraging more regional businesses to develop tech-based business plans.

The Arab Technology Business Plan Competition is a development of the ASTF's abiding efforts to encourage regional technology R&D. Since its foundation in 2000, the ASTF has worked to drive up interest in tech-related businesses in the region - culminating in its first Investing in Technology forum in 2004.

"When we had the first forum in Beirut, we called for ideas to be presented, and I can tell you that we received hundreds of suggestions. We only managed to get 40 that could be dealt with, and we only presented four," says Dr Abdullah Alnajjar, president of ASTF. "Four years ago this was new to the region, but now people are starting to open up - we need to create this culture of innovation, and put it in a language that is understood by the investors, so they'll come forward."

Things have come on in leaps and bounds since then - last year's business plan competition attracted a large number of high-quality entries, according to Farhan Kaladeh, the programme manager for Investing In Technology at ASTF.

"We were really impressed with the overall quality of the entries last year. This is something new in the Arab region - you're talking about establishing a company that has global market potential," says Kaladeh.

He explains that the majority of Middle Eastern entrepreneurs plan to limit their targets to specific countries in the region - he says ASTF looks for business plans with a global reach. Kaladeh adds that he was impressed so many of last year's entrants fulfilled this objective.

"They wanted to build a global company, not a local or regional market. We believe this year that we will have more entries targeting the global market - this is our target for the competition: think big," he adds.

Last year's winner, Astroleap from Jordan, is a good example of the global reach ASTF is looking for. Although the company originated in Jordan, and still maintains an office there, most of its R&D is done in California - the state is also the firm's initial market for its location-based mobile commerce systems.

Husam Saqallah, managing director of Astroleap, sees no issues with operating in the US and being a Middle Eastern startup at the same time. He says it is inevitable that technology entrepreneurs will seek the largest market for their products or services - in this case the US, and specifically southern California.

Saqallah is also very vocal on the need for greater investment in these projects. He says regional investors are often not interested, or else have unrealistic expectations.

"What is missing is, there is no clear process of what you need to do - in some cases I didn't find they had any clear goals of what they wanted to get out of the investment," he explains. "It seemed like some of them wanted to be like the pure American VC, which cares only about the ROI - but this doesn't work in the region because we're not at that stage yet. Initially you have to recognise that there are steps you need to do before you get to that level."

The ASTF representatives also acknowledge that there is limited interest from regional organisations in learning how to approach technology investments - but the Foundation sees this as a long-term process of education. In the immediate future, ASTF will be looking to companies such as Intel for support. Intel, clearly, are happy to give it - both in financial and publicity terms - but the vendor would also like to see more private companies getting involved in programmes such as the ASTF Business Plan Competition.

"I think there's a vested interest in all private companies - not just technology companies - to support initiatives for business and economic development. At the end of the day you're talking about economy stimulation - when you stimulate the economy in technology, it stimulates other areas as well," says Bassem Nasir, higher education manager at Intel Middle East, Turkey and Africa.

"Dubai is rife with investment bankers, even with venture capitalists - supporting such initiatives would represent such a minimal percentage of their funds. I think the return on investment on things like this would be tremendous," he adds.

Saqallah concurs, but adds a note of caution. "Others will follow - that's a no-brainer - but we have to prove it works first of all," he concludes.

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