What It Takes to Build a Resilient Startup Ecosystem in Palestine

11, Jan 2021
What It Takes to Build a Resilient Startup Ecosystem in Palestine

On October 2020, the Representative Office of Switzerland in Ramallah released an in-depth report exploring "The Innovation and Entrepreneurial Ecosystem in the OPT: Main Challenges and Proposed Solutions". The purpose of the report was to delve into the intricacies of the Palestinian entrepreneurial scene, why entrepreneurship is gaining popularity amongst young Palestinians, and the challenges and solutions that can help consolidate a resilient ecosystem.


The report begins by introducing the meaning behind the terms entrepreneurial mindset and path and posits that both terms reflect on the required skills and motivation needed by enterprising self-starters to follow-through on their project ideas and create viable business ventures.


However, for Palestinians launching and scaling an entrepreneurial project is anything but straightforward, especially when it comes to technological shortcomings, donor aid dependency, and “macroeconomic development outcomes,” which focuses more on the economy at large rather than on individual SMEs that are essential for creating jobs and a resilient economy.


In terms of funding, diaspora remittances and donor fueled seed-funding was also discussed at length by the report. Unfortunately, startup funding is limited, especially with the slow-down in remittances and availability of donor aid. This situation has been further exacerbated by COVID-19, which has caused a severe economic downturn on a global scale. As such, startups that rely on NGO programs for seed-funding, acceleration and incubation services, and access to new markets and networks of support struggle to succeed in markets inside and outside of Palestine.


While the report focuses on seed-funding for startup success, access to training services, networks of support, and industry partners are equally important to the success of any entrepreneurial venture. Focusing on specific support services without addressing the bigger picture entails that long-term market potential for up-and-coming startups will remain tenuous at best.


Another major issue impacting the growth of the startup ecosystem is the Palestinian educational system. Palestinian education is wrought with traditional curricula and teaching methods that value rote learning rather than creative approaches that engage students rather than dictate to them. This issue also carries on to the quality of STEM subject which is outdated and not providing students with the tools and skills needed to compete on a global scale. As a result, the educational ecosystem is responsible for perpetuating the status quo and bringing forth an endless generation of docile learners.


The role of government is then explored. The report unequivocally states that governments are critical actors in fostering innovation, creating legal frameworks to set up and maintain innovation ecosystems, and bringing together key stakeholders across the public and private sectors for impactful collaborations. 


Responding the Palestine’s nascent startup ecosystem: MENACatalyst’s approach

MENACatalyst, a regional based organization with offices in Palestine, recognizes the constraints faced by local Palestinian startups and is working on complementary strategies that collectively address their needs. This includes interventions that target the country’s up and coming generation of innovators, emerging self-starters learning to navigate the local ecosystem, and more established entrepreneurs with startups ready to scale.


As such, MENACatalyst offers emerging self-starters as well as more firmly established startups with a series of support services that range from training and capacity building opportunities, one-on-one and group mentorship with international-based industry experts, access to expansive networks of support essential for securing capital and learning how to integrate into global markets.


For Palestine, the role of the diaspora cannot be overstated. Although they provide remittances, which is essential to the local ecosystem as it is, they have the potential to provide so much more. This is why MENACatalyst leverages diaspora-based business and industry experts, corporate leaders, and changemakers to step-up and share their skills and open up networks of support for young Palestinians eager to set-up viable startups with scaling potential. 


With regards to the educational ecosystem, literacy rates in Palestine are well over 97% and are amongst the highest in the Middle East. PCBS also reports that more than a million students are enrolled in both primary and secondary schools in Palestine. However, when it comes to STEM education, the system leaves much to be desired. According to the report, academic studies at the undergraduate level predominately relies on “skills that are essential for performing a set task, and neglect introducing new approaches and teaches methods in order to develop critical thinking abilities among students that will drive entrepreneurial activity.” 


MENACatalyst’s flagship digital and innovation literacy program MENACodes fills in the gap by offering supplementary digital learning opportunities for young students. The program offers the region’s youth, particularly in Palestine, the opportunity to embrace the digital world and learn the latest and most in-demand coding languages gaining traction in a variety of sectors and markets across the globe.


MENACodes includes afterschool programs, hackathons, and summer courses to help young people across the region keep up with the latest trends dominating the global coding scene. However, the program is also designed to help the youth learn how to think creatively, acquire versatile problem-solving skills, get introduced to the world of innovation and entrepreneurship, and learn what it takes to succeed in a fast-paced digital world.


We understand the importance of advocacy and campaigning, which is why we continue to call for strengthened public and private sector collaboration on policies, initiatives, and projects conducive to creating a resilient startup ecosystem. To this effect, we provide insightful reports on the growing needs of the country’s entrepreneurs, the state of Palestinian entrepreneurship, how to build a resilient ecosystem, and weekly features to help some of the country’s latest game-changing startups increase their outreach.


Our latest efforts culminated in an exclusive meeting with the Prime Minister H.E Mohammad Shtayyeh, in which an array of leading public officials and a group of over 40 early and growth-stage startups attended. The meeting allowed stakeholders to explore possible solutions to marketplace barriers, limited access to resources and investment opportunities, and the lack of government-supported entrepreneurial platforms.


Ultimately, our goal at MENACatalyst is to create a more resilient, diverse, and expansive startup ecosystem fueled by market demand and social impact. An ecosystem not defined by limitations, but one motivated by embracing change and adapting to the ever-evolving needs of markets and community development across the MENA region.