Conquering the world

Along with attracting global companies, Middle East governments should encourage small, indigenous companies to grow internationally.

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By  Sathya Mithra Ashok Published  July 9, 2008

Being the best in the Middle East is almost always co-related to being the biggest.

The tallest tower, the biggest mall, the most well-established multi-national firms, the most growth – it is all about size and numbers. In its bid to catch-up with the world super-fast, the Middle East has refined a culture to harness the best and attract global businesses in restricted time periods that has arguably been never seen anywhere before.

That is a remarkable achievement. However, it does come with its disadvantages. Business is not just business in the Middle East – it is almost always show-business. Companies spend a significant part of their budgets on marketing activities, simply to put through claims and statements, than they sometimes do in creating better product and services for their customers. This is as true in the IT sector, maybe more so, than any other industry.

With those demands for a certain level of marketing strength, which often only global multi-national firms can bring to play, the entry-barriers for small, local companies have become that much higher.

There are different reasons any developing economy needs small companies. For one, niche, vertical-specific solutions are more liable to come from small firms than the larger players. Since the competitive scales are not tipped in their favour, smaller companies tend to focus on fill specific gaps in the market, which often tend to be particular solutions in different industries.

They also concentrate on developing solutions that are tuned to more local needs from the start, rather than taking the base of an international product and tweaking it to fit customer needs.

Conversely, these companies also tend to readily customise solutions for customers in order to make any solution a perfect fit for the organisation that is going to be using it. For smaller companies, almost every customer is a big customers, every account is an important source of revenue and therefore, every one of them tends to be treated the same and provided the best that they can do.

In fact, this prevailing attitude of being there every step of the way for customers can be felt across the plane from small companies – from pre-selection consultation and implementation aid, to solving post-implementation hassles and challenges.

Since they do not have the same marketing might of larger companies, small firms rely heavily on word-of-mouth to spread the knowledge of their work. For this reason, they continue to maintain really good relationships with their customer base, even beyond the confines of work done and delivered.

When you see the HPs and the IBMs of the world, it is easy to forget that these companies started as really tiny operations, sometimes working out of garages for years before moving onto bigger things. And they did grow, not only because they were good and they filled a need, but also because their ecosystem encouraged them and gave them the opportunity to spread their wings.

Such an environment – including venture capitalists, institutions that help entrepreneurs through initial stages of developing ideas and a business culture where small does not necessarily mean struggling – is lacking in the Middle East. It is about time that governments across the region started amending the lack.

It is fantastic to be able to attract international firms to the region and get them to establish huge operations. But to leave a permanent mark on the world stage of IT, you need strong local companies that are able to grow from their homeland out to conquer the world. Now that would truly be a huge achievement!

Sathya Mithra Ashok is the editor of Network Middle East.

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