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Potential Opportunities for Entrepreneurs and Startups in Mena Region

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The MENA region’s entrepreneurial ecosystem, which has been developing significantly over the years is set to rapidly flourish. With key investments from major international players, the region is positioned to diversify product offerings and propel entrepreneurship. The UAE government has always shown full support by encouraging the rise of start-ups and promoting new ideas and concepts, which can be utilized to enhance the economy at large.

Development of a sustainable start-up ecosystem can help the region create a system which is valuable to entrepreneurs and investors alike. The ecosystem itself needs to ensure that entrepreneurs and start-up companies can get the help they need to build scalable businesses. According to the Global Entrepreneurship Monitor Report 2017, 73% of the population of Egypt find entrepreneurship as a key career choice. It has also been reported that there have been 3000 start-ups in the region and over $870 million in investments for start-ups within the last year.

The UAE has also been noted to be the forerunner as an entrepreneurial hub, being at the top of the MENA region’s top funded start-ups, equating to 50 percent. The world’s most notable entrepreneurial ecosystem venues are the California-based Silicon Valley. MENA has the opportunity to follow a similar path and challenge the status quo by utilizing three main concepts for becoming an entrepreneurial hub and that is connecting all the field’s regional experts.

The MIT Enterprise Forum Arab Startup Competition, which was held in May 2017 recognizes talent in innovation and entrepreneurship and identified key start-ups from the MENA region, who are paving the way using technology and other innovative means to change the world. Technology has a major role in MENA especially in Egypt and the UAE to further enhance the landscape for new start-up product developments and networking with global investors. Due to the fact that we live in a competitive, global economic environment, the MENA region has to compete with other global entrepreneurial hubs such as global technology headquarter Silicon Valley.

However, the region is positively positioned to thrive in nurturing new talent, training, and education and can diversify investments that can spearhead start-ups into a prosperous future for the flourishing economy in the Middle East. Following are fields technology-related that can be a potential opportunity for MENA entrepreneurs and startups:

3D printing:

Researchers estimate that the 3D printing market will reach $7.3 billion in 2016. The primary market – including 3D printing systems, materials, supplies, and service – has grown at least 30% each year from 2012 to 2014. The rest of the growth comes from the secondary market, including tooling, molding, and castings. Western countries (North America and Europe) account for more than two-thirds (68%) of the 3D printing market revenue and the Asia Pacific accounts for 27%.

The consumer electronics and automotive industries each contribute 20% of the total 3D printing revenue. These early-adopter industries use the technology primarily during the prototyping stage of production. For example, smartphone manufacturers are slowly using 3D printing for more than just prototyping—some component parts are now manufactured with 3D methods.

The medical device industry (15%) is the third largest 3D printing market and uses 3D printing for mass customized finished goods such as hearing aids.

Interesting fact: 98% of hearing aids worldwide are manufactured using 3D printing.

3D printing adoption Current Users: Two-thirds of manufacturers already use 3D printing in some way, and 25% plan to adopt the technology in the future. Despite these numbers, the full potential of 3D printing is far from tapped.

Intenders: Thirty-two percent of current users don’t believe their company is fully leveraging the advantages of 3D printing while 45% of intenders would use the technology more if benefits were better understood by their company.

Influencers: The primary influencers driving companies’ 3D printing strategy are managers in R&D, engineering and or manufacturing. Demonstrating the benefits of 3D printing to these audiences is crucial for driving increased adoption.

Drones:

Like the internet and GPS before them, drones are evolving beyond their military origin to become powerful business tools. They’ve already made the leap to the consumer market, and now they’re being put to work in commercial and civil government applications from firefighting to farming. That’s creating a market opportunity that’s too large to ignore.

The opportunity ahead

Between now and 2020, we forecast a $100 billion market opportunity for drones—helped by growing demand from the commercial and civil government sectors.

Military

Drones got their start as safer, cheaper and often more capable alternatives to manned military aircraft. The defense will remain the largest market for the foreseeable future as global competition heats up and technology continues to improve.

Consumer

The consumer drone market was the first to develop outside the military. Demand has taken off in the last two years and hobbyist drones have become a familiar sight, but there is plenty of room for growth.

Over the next few years, it’s expected that consumer demand will continue to build. By 2020, we expect 7.8 million consumer drone shipments and $3.3 billion in revenue, versus only 450,000 shipments and $700 million in revenue in 2014.

Commercial/civil

The fastest growth opportunity comes from businesses and city governments. They’re just beginning to explore the possibilities, but we expect they’ll spend $13 billion on drones between now and 2020, putting thousands of them in the sky. Here’s where you might see them.

Artificial Intelligence:

The market for artificial intelligence (AI) technologies is flourishing. Beyond the hype and the heightened media attention, the numerous startups and the internet giants racing to acquire them, there is a significant increase in investment and adoption by enterprises. A Narrative Science survey found last year that 38% of enterprises are already using AI, growing to 62% by 2018. Forrester Research predicted a greater than 300% increase in investment in artificial intelligence in 2017 compared with 2016. IDC estimated that the AI market will grow from $8 billion in 2016 to more than $47 billion in 2020.

Coined in 1955 to describe a new computer science sub-discipline, “Artificial Intelligence” today includes a variety of technologies and tools, some time-tested, others relatively new. To help make sense of what’s hot and what’s not, Forrester just published a TechRadar report on Artificial Intelligence (for application development professionals), a detailed analysis of 13 technologies enterprises should consider adopting to support human decision-making.

Based on Forrester’s analysis, here’s a list of the 10 hottest AI technologies:

  1. Natural Language Generation: Producing text from computer data. Currently used in customer service, report generation, and summarizing business intelligence insights. Sample vendors: Attivio, Automated Insights, Cambridge Semantics, Digital Reasoning, Lucidworks, Narrative Science, SAS, Yseop.
  2. Speech Recognition: Transcribe and transform human speech into a format useful for computer applications. Currently used in interactive voice response systems and mobile applications. Sample vendors: NICE, Nuance Communications, OpenText, Verint Systems.
  3. Virtual Agents: “The current darling of the media,” says Forrester (I believe they refer to my evolving relationships with Alexa), from simple chatbots to advanced systems that can network with humans. Currently used in customer service and support and as a smart home manager. Sample vendors: Amazon, Apple, Artificial Solutions, Assist AI, Creative Virtual, Google, IBM, IPsoft, Microsoft, Satisfy.
  4. Machine Learning Platforms: Providing algorithms, APIs, development and training toolkits, data, as well as computing power to design, train, and deploy models into applications, processes, and other machines. Currently used in a wide range of enterprise applications, mostly `involving prediction or classification. Sample vendors: Amazon, Fractal Analytics, Google, H2O.ai, Microsoft, SAS, Skytree.
  5. AI-optimized Hardware: Graphics processing units (GPU) and appliances specifically designed and architected to efficiently run AI-oriented computational jobs. Currently primarily making a difference in deep learning applications. Sample vendors: Alluvial, Cray, Google, IBM, Intel, Nvidia.
  6. Decision Management: Engines that insert rules and logic into AI systems and used for initial setup/training and ongoing maintenance and tuning. A mature technology, it is used in a wide variety of enterprise applications, assisting in or performing automated decision-making. Sample vendors: Advanced Systems Concepts, Informatica, Maana, Pegasystems, UiPath.
  7. Deep Learning Platforms: A special type of machine learning consisting of artificial neural networks with multiple abstraction layers. Currently primarily used in pattern recognition and classification applications supported by very large data sets. Sample vendors: Deep Instinct, Ersatz Labs, Fluid AI, MathWorks, Peltarion, Saffron Technology, Sentient Technologies.
  8. Biometrics: Enable more natural interactions between humans and machines, including but not limited to image and touch recognition, speech, and body language. Currently used primarily in market research. Sample vendors: 3VR, Affectiva, Agnitio, FaceFirst, Sensory, Synqera, Tahzoo.
  9. Robotic Process Automation: Using scripts and other methods to automate human action to support efficient business processes. Currently used where it’s too expensive or inefficient for humans to execute a task or a process. Sample vendors: Advanced Systems Concepts, Automation Anywhere, Blue Prism, UiPath, WorkFusion.
  10. Text Analytics and NLP: Natural language processing (NLP) uses and supports text analytics by facilitating the understanding of sentence structure and meaning, sentiment, and intent through statistical and machine learning methods. Currently used in fraud detection and security, a wide range of automated assistants, and applications for mining unstructured data. Sample vendors: Basis Technology, Coveo, Expert System, Indico, Knime, Lexalytics, Linguamatics, Mindbreeze, Sinequa, Stratified, Synapsify.

There are certainly many business benefits gained from AI technologies today, but according to a survey Forrester conducted last year, there are also obstacles to AI adoption as expressed by companies with no plans of investing in AI:

  • There is no defined business case 42%
  • Not clear what AI can be used for 39%
  • Don’t have the required skills 33%
  • Need first to invest in modernizing data mgt platform 29%
  • Don’t have the budget 23%
  • Not certain what is needed for implementing an AI system 19%
  • AI systems are not proven 14%
  • Do not have the right processes or governance 13%
  • AI is a lot of hype with little substance 11%
  • Don’t own or have access to the required data 8%
  • Not sure what AI means 3%

Once enterprises overcome these obstacles, Forrester concludes, they stand to gain from AI driving accelerated transformation in customer-facing applications and developing an interconnected web of enterprise intelligence.

Cyber Security:

Cybersecurity Ventures predicts global spending on cybersecurity products and services will exceed $1 trillion cumulatively over the next five years, from 2017 to 2021.
In 2004, the global cybersecurity market was worth $3.5 billion — and in 2017 we expect it to be worth more than $120 billion. The cybersecurity market grew by roughly 35X over 13 years.

While all other tech sectors are driven by reducing inefficiencies and increasing productivity, cybersecurity spending is driven by cybercrime. The unprecedented cybercriminal activity we are witnessing is generating so much cyber spending, it’s become nearly impossible for analysts to accurately track.

Anticipates are 12-15 percent year-over-year cybersecurity market growth through 2021, compared to the 8-10 percent projected over the next five years by several industry analysts.

IT analyst forecasts are unable to keep pace with the dramatic rise in cybercrime, the ransomware epidemic, the refocusing of malware from PCs and laptops to smartphones and mobile devices, the deployment of billions of under-protected Internet of Things (IoT) devices, the legions of hackers-for-hire, and the more sophisticated cyber-attacks launching at businesses, governments, educational institutions, and consumers globally.

It is likely that analyst firms will catch up with our projections in 2017 — and update the disproportionately low share of total IT spending which security is expected to account for (over the next 5 years) in their current reports. By 2020, we expect IT analysts covering cybersecurity will be predicting five-year spending forecasts (to 2025) at well over $1 trillion.

Market researchers size information security spending:

A Gartner report projected global spending on “IT security” products and services would top $81 billion in 2016, an increase of 7.9% over the prior year (this is not a “cybersecurity” projection that would include all aspects of cyber defense i.e. consumers, IoT devices, automobiles, etc.). The largest areas of information security spending are consulting and IT outsourcing, according to the report.

A 2016 report from BI Intelligence — Business Insider’s research service — estimated $655 billion will be spent on cybersecurity initiatives to protect PCs, mobile devices, and the Internet of Things (IoT) devices between 2015 and 2020. BI breaks down the forecasted spending as follows: $386 billion spent on securing PCs; $172 billion spent on securing IoT devices; and $113 billion spent on securing mobile devices.

A Morgan Stanley Blue Paper published this past summer — “Cybersecurity: Rethinking Security” — examines why and how digital security could evolve in the next several years—and what these changes mean for investors.. and asserts the cybersecurity market could grow by more than four times overall IT spend.

North America and Europe are the leading cybersecurity revenue contributors, according to a report from TechSci Research. Asia-Pacific is rapidly emerging as a potential market for cybersecurity solution providers, driven by emerging economies such as China, India, and South-East Asian countries, wherein, rising cyber espionage by foreign countries is inducing the need for safeguarding cyberspace.

India should see huge cybersecurity market growth over the next decade. According to the Data Security Council of India (DSCI), India’s cybersecurity market is expected to grow nine-fold to $35 billion by 2025, from about $4 billion. This would mainly be driven by an ecosystem to promote the growth of indigenous security product and services start-up companies.

According to IDC, the hot areas for growth are security analytics / SIEM (10 percent); threat intelligence (10 percent +); mobile security (18 percent); and cloud security (50 percent). A Tech Republic story states the cloud security market is expected to be worth $12 billion by 2020, according to a report from Transparency Market Research.

Government spending on cybersecurity has increased at an average annual rate of 14.5% between FY 2006 and FY 2017, outpacing procurement in every other type of major government program, according to Scott Homa, Senior Vice President for Mid-Atlantic Research at Jones Lang LaSalle IP, Inc. (JLL), a financial and professional services firm specializing in commercial real estate services and investment management with 60,000 employees across 280 corporate offices worldwide.

Demand for vendor-furnished information security products and services by the U.S. federal government will increase from $8.6 billion in FY 2015 to $11 billion in 2020 at a compound annual growth rate (CAGR) of 5.2 percent, according to “Deltek’s Federal Information Security Market Report”. Deltek states that as federal agencies struggle to stay ahead of the cybersecurity threats, more and more of their IT spend is being devoted to cybersecurity, reaching over 10 percent of IT spend by 2020.

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Potential opportunities for entrepreneurs and startups in MENA region. (2018, October 08). GradesFixer. Retrieved September 24, 2021, from https://gradesfixer.com/free-essay-examples/potential-opportunities-for-entrepreneurs-and-startups-in-mena-region/
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Potential opportunities for entrepreneurs and startups in MENA region [Internet]. GradesFixer. 2018 Oct 08 [cited 2021 Sept 24]. Available from: https://gradesfixer.com/free-essay-examples/potential-opportunities-for-entrepreneurs-and-startups-in-mena-region/
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