North African tech startups

7 reasons North Africa has huge tech potential

Abdellah Mallek Trends

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For many people around the world, North Africa occupies a vast desert land populated by tea drinking Bedouins traveling along the Sahara by camel caravans. This is, of course, an illusion. Far from a mirage, and in spite of the various obstacles and crises, the region could be a tech paradise. Here’s why:

 

1. Diversified economies: As we all know, oil prices are falling fast and many North African economies rely principally on oil and gas exports: Algeria, Libya, and (to a lesser extent) Egypt. As the price of this precious commodity keeps dropping, oil rich countries must think of investing important ‘Petrodollar-Funds’ in alternative energy sources in order to secure a reliable and sustainable way of growing their economies for the future. Countries like these, should invest (and quickly) in other sectors, such as IT and Renewable Energy (REn) in order to diversify their economies.

The other North African countries — Morocco &Tunisia, the oil consumers — have paid the burden of the high oil prices resulting in delaying and postponing many infrastructural projects. However, it is important to note that both Tunisia and Morocco have a vibrant tourism industry which employs millions of people. In addition; the drop in energy prices will certainly relieve these two countries, and help them invest the savings made in energy costs and commodity subsidies into new technologies to support already existing activities and create and add value (e-tourism, m-tourism).

 

2. Use of mobile devices: The proportion of people using a mobile is just huge in North Africa (Algeria: 39m, Egypt: 99m, Libya: 10.2m, Morocco: 42.4m, Tunisia: 13.9m) and it’s getting bigger by the day. This is literally a paradise for mobile developers and manufacturers.

 

3. Internet penetration rate: Even if it’s still low, it is very likely that this rate should increase very fast according to the existing market research studies (Cisco internet penetration). In reality, state authorities need to step up and take the lead to encourage and facilitate internet access for all, taking advantage of current smartphone and 3/4G trends.

 

4. First-mover advantage: North Africa is a promising market, with little or no competition, where everything has to be built: a real opportunity and a fertile ground for innovation. The tech market is really at its early days, and the one who will penetrate it first will have the biggest market share.

 

5. Diaspora: Don’t forget the hidden army of working hands and (bright) thinking brains! Due to multiple crises in North African countries, many their citizens went away looking for a better living. Now that mother countries are feeling better and are showing more and more advantages and potential, this diaspora should be incited to come back. Economic instability and market saturation in Europe and USA will push thousands of Algerian, Moroccan, Tunisian and Egyptian expatriates to innovate in their mother countries, were innovation opportunities are wider and the market unlimited (at least for now). This competencies and expertise have to be well-used and warmly welcomed by local governments.

 

6. Young tech users: The greatest resource to these countries remains the younger generation, which represents over or 60% of the population, which is mostly under 30. This generation of young users bring in vast new opportunities to the mobile market and tech sector.

 

7. Good command of foreign languages: The majority of North African people are at least bilingual: French and/or English is taught in schools and are in most cases the languages used to do business.  This is a huge advantage for foreign companies, who can hire highly qualified persons at lower salaries (than Europe/US ones), as well as an advantage to develop comprehensive business relationship with the rest of the world.

 

 

These are some of the many reasons to believe in this region. North Africa offers many advantages that will require action and hard work with the local and state authorities, universities, investors, entrepreneurs, startups, the youth and the diaspora. These collaborative efforts between all stakeholders will undoubtedly attract foreign investors to look into the North African region as a land of opportunities, sustainable growth, and innovation.

 

 

Abdellah Mallek is an Algerian entrepreneur, who’ll be blogging at LeWeb’14. Follow him on Twitter here!

Top photo via Shutterstock – xtock