IT1_InnovationEntrepreneurship_EN

Acknowledgments 3

Background 5

The workshop organizers (JCI Lebanon, EIB, CMI) 6

& collaborators (AUB & JCI Syria) – scope and focus

Entrepreneurship (definition and characteristics) 12

Innovation (what is it, why do we need it) 16

The Mediterranean region & the entrepreneurial ecosystem (and its players) 19

The challenges & opportunities 24

Conclusions 29

Recommendations 36

3

Acknowledgments

”Many great ideas go unexecuted, and many great executioners are without

ideas. One without the other is worthless.” Tim Blixseth

This booklet is the result of the cooperation between JCI Lebanon, the

European Investment Bank and the Marseille Center for Mediterranean

Integration in collaboration with the American University of Beirut

“Darwazah Center for Innovation Management and Entrepreneurship” and

JCI Syria

www.jci.cc/local/lebanon

www.eib.org

www.cmimarseille.org

4

We would like to especially thank the following contributors without which,

this booklet would not have seen the light:

Sharbel Maroun, JCI Lebanon

Nadyne Ghannoum El Hage, JCI Lebanon

Tarek Matar, JCI Lebanon

Joelle Atallah, JCI Lebanon – creative designer

Firas Deeb, European Investment Bank, JCI Aleppo (Syria)

Farah Ahmad, JCI Aleppo (Syria)

Salam Yamout, Presidency of the Council of Ministers, Lebanon

Ilyas Azzioui, ingenieur détat, Morroco

Imar AlNaeb, JCI Aleppo (Syria)

Berytech, Lebanon

JCI Aleppo

JCI Beirut

5

Background

“It may be a dream, but this is the core of entrepreneurship; at the very

beginning an endeavor is always a dream. An innovative dream. A gateway to

a new perspective.” Emil Abirascid

The Arab Spring has brought to light key challenges of job creation as a top

priority in the Mediterranean region, more specifically, the Southern part of

the Mediterranean. It is safe to estimate that over 60 percent of the overall

populations in that region are under the age of 24 and jobless rates among

youth are well over twice the regional average in some countries.

Disadvantaged youth and the resulting lack of employment have a direct

impact on the absence of this important segment of the population and their

engagement in socioeconomic development. They then develop feelings of

marginalization, exclusion, frustration and low self-esteem which propel them

into a self-defeating vicious circle.

Yet another important challenge facing the region is the low level of

enterprise creation. According to a World Bank Group Entrepreneurship

Survey (WBGES), data shows that MENA economies need to step up their

efforts to provide a more enabling business environment and to promote

entrepreneurship and the development of small and medium enterprises

(SMEs)—with a particular focus on gender-specific barriers to

entrepreneurship.

It therefore ensues that the creation of meaningful employment and enterprise

opportunities for young people is one of the most critical sustainable

development challenges currently facing this region. The private business

sector – together with government and civil society - has a vital role to play in

delivering innovate solutions to the growing youth unemployment problem.

6

Workshop Organizers & Collaborators

“Coming together is a beginning; keeping together is progress; working

together is success.” Henry Ford

The Organizers

Junior Chamber International (JCI) is a world

federation of young leaders and entrepreneurs with

more than 200,000 active members and one million

alumni all over the world. It is a non-profit

organization represented in more than 115

countries.

JCI is a network where young people from 18 to 40 all over the world learn to take

on responsibilities and develop managerial skills through active hands on work on

projects. This structure forms an international grassroots movement creating

global impact through local action. JCI activities ranges from business,

entrepreneurship to sustainable development projects; JCI members are young

active citizens taking responsibility for their communities while improving

themselves through participation, leadership and action in order to create positive

change.

The purpose of Junior Chamber is to contribute to the advancement of the

community by providing the opportunity for young people to develop their

leadership skills, social responsibility, entrepreneurship and fellowship necessary to

create positive changes. It is attained through the following four areas of

opportunity:

· Individual Opportunities: Through various leadership training programs.

· Community Opportunities: Through various community development programs,

members identify social needs and issues, and develop projects to sustainably

improve the well-being of the community.

· International Opportunities: Through the capitalization of a network of 200,000

Jaycees in more than 1150 countries around the world.

7

Business Opportunities: Through the enhancement of the economics of the

community by conducting projects and training sessions to increase business

productivity.

Junior Chamber International has a formal agreement with the International

Chamber of Commerce- World Chambers Federation (ICC-WCF). Through these

partnerships, JCI Local Organizations collaborate with local chambers of commerce

on projects to advance global economic progress and encourage entrepreneurship.

Junior Chamber International has been an official partner of the UN since 1954.

Every year JCI holds a UN Leadership Summit in collaboration with the UN,

where delegates team up with representatives from key partners to focus on a

current international issue and seek workable solutions for members to enact

locally.

The European Investment Bank (EIB) is the

European Union’s financing institution. Its

shareholders are the 27 Member States of the

Union, which have jointly subscribed its capital.

The EIB’s Board of Governors is composed of the

Finance Ministers of these States. The EIB’s role is to provide long-term finance in

support of investment projects.

In addition to supporting the EU's policy objectives inside the European Union, the

EIB is active in over 150 countries outside the EU (the pre-accession countries of

South-East Europe, the Mediterranean partner countries, the African, Caribbean

and Pacific countries, Asia and Latin America, Central Asia, Russia and other

neighbours to the East), working to implement the financial pillar of EU external

cooperation and development policies (private sector development, infrastructure

development, security of energy supply, and environmental sustainability).

The EIB, the largest international non-sovereign lender and borrower, raises the

resources it needs to finance its lending activities by borrowing on the capital

markets, mainly through public bond issues. Its AAA credit rating enables it to

obtain the best terms on the market. As a not-for-profit institution, the EIB passes

on this advantage in the terms it offers to the beneficiaries of its loans in both the

public and private sectors.

8

The EIB works closely with the other EU institutions, especially the European

Parliament, the European Council and the European Commission. The European

Investment Fund is a subsidiary of the EIB.

The Marseille Center for Mediterranean Integration (CMI)

was launched in 2009 with the mandate of creating a platform

for integration in the Mediterranean through high-level policy

dialogue and the sharing of knowledge in key development

areas that are of primary importance for the region: urban and

spatial development; skills, employment and labour mobility;

the environment and water; transport and logistics; the knowledge economy and

innovation. The founding members are Egypt, France, Jordan, Lebanon Morocco

and Tunisia, together with the World Bank (WB) and the European Investment

Bank (EIB).

Workshop Collaborators

American University of Beirut, the Samih Darwazah Center

for Innovation Management and Entrepreneurship at the

Olayan School of Business of the American University of

Beirut is dedicated to the study of innovation and

entrepreneurship in the region with a view to documenting and enhancing

innovative practices in the business community. It seeks to generate reliable

information to guide evidence-based decision making in this key sector that holds

strategic importance in a knowledge economy. Its scope includes research, field

studies, benchmarking, seminars and workshops as well as conferences all focused

on the pivotal domain of organizational renewal and wealth creation through

creative enterprise.

JCI Syria is part of the International JCI network and

collaborated in the workshop with a participative delegation

of highly qualified members as well as providing a team to

assist with research and the collation of results for this

booklet.

9

The Innovation and Entrepreneurship

workshop

The IT1 Program

The IT1 Program is an initiative of the Marseille Centre for Mediterranean

Integration (CMI) and coordinated by the European Investment Bank (EIB).

Its objective is to help increase the flow of innovative projects in the region

and further strengthen the innovation chain.

“Innovation and Entrepreneurship workshop” is the third workshop organized

in the framework of the IT1 Program “Fostering Innovation, Supporting the

Promotion and Financing of Innovation in the Mediterranean”. The IT1

Program proved particularly useful in providing a creative, interactive and

immersive environment that encourages mutual learning among

entrepreneurs and fosters open developmental dialogue and cooperation with

one of the main international non-governmental organization for young active

citizens with a strong presence in Mediterranean countries, Junior Chamber

International.

For the 2012-2015 phase of the CMI, the IT1 program will be expanded by a

program named « Innovation Systems »: this program will focus on the

fundamentals of creating innovative jobs, in the Southern Mediterranean,

which can be generated by strengthening regional integration, developing

trade exchanges and know-how and increasing the environmental component

of investments in the Southern Mediterranean.

10

The Innovation and Entrepreneurship Workshop –

Scope & Focus

“Ideas can be life-changing. Sometimes all you need to open the door is just

one more good idea.” Jim Rohn

Entrepreneurs are one of the main actors responsible for the high growth

start-ups in the South of the Mediterranean, providing the opportunity to

generate jobs needed in the area. These entrepreneurs are a crucial element for

the economic development of the region with their capability to manage

complex business relationships across cultural and linguistic boundaries.

Science parks, innovation centers and business incubators are the natural

playgrounds of supporting innovation and entrepreneurship activities. The

workshop aimed at enhancing collaboration and the transfer of knowledge and

best practices among innovation stakeholders and entrepreneurs in the

Mediterranean. The project brought together the various stakeholders in the

entrepreneurial ecosystems of the countries represented through the

participants. Young, highly skilled entrepreneurs from JCI partner

organizations based in Lebanon, Syria, Jordan, Egypt, Morocco, Algeria &

Tunisia joined the 4 day program in order to discuss entrepreneurs’

perspective on Mediterranean innovation, to share knowledge and to provide

answers to common problems.

The main goals of the workshop were:

1. To foster mutual learning and harness best practices among Mediterranean

entrepreneurs.

2. To enhance collaboration and transfer of knowledge and best practices

among innovation stakeholders and entrepreneurs around the Mediterranean.

3. To provide the participants with a comprehensive overview of what it takes

to be an “innovation” entrepreneur in the Mediterranean region.

The participants’ backgrounds ranged from academic students to professionals

with either an idea for an innovative venture or a newly established startup.

The ideas and concepts discussed covered a wide spectrum of market sectors

such as industry, banking, trade, education, services, information,

environment, energy, and others.

11

The topics covered were varied in nature and scope and discussed the

mechanisms of promoting and developing entrepreneurial capabilities through

a thriving small and medium-sized enterprise sector, developing a business

plan and the basics of company setup and structure, strategy and alternatives

for financing.

Outcomes of the workshop focused on giving the participants a comprehensive

view of the environment in which they would be expected to succeed while

highlighting the following issues:

Risk factors involved in innovation and entrepreneurship

Know-how to organize the critical tests for evaluating probability of success at

each stage of development of the innovation process

Identification of ways to promote and develop entrepreneurial capabilities

through a thriving small and medium-sized enterprise (SME) sector.

Mastering the marketing and financial aspects of innovation and

entrepreneurship in order to reduce the risk of failure

Understanding the major barriers to innovation in the region, such as: legal

frameworks, academic-industry relations, the financing of innovation,

intellectual property rights and restrictions on foreign investments

The methodology adopted during the workshop centered around several

presentations, interactive workshops, discussion sessions, in addition to a site

visit to Berytech where a panel of entrepreneurs took place and the

participants learned from innovative entrepreneurs. Towards the end of the

workshop, panels of entrepreneurs and testimonials of innovative and

successful entrepreneurs were organized, a case study was discussed in depth

with the relative entrepreneur on hand to interactively answer questions and

address concerns, all concluded with a useful wrap-up session.

The training and workshop curriculum was determined in collaboration

between JCI Lebanon and EIB based on JCI Lebanon’s existing partnerships

with top trainers and successful entrepreneurs in the relevant fields explored.

12

Entrepreneurship

“Entrepreneurship is neither a science nor an art. It is a practice.” Peter Drucker

“The ones who are crazy enough to think that they can change the world, are

the ones who do.” Steve Jobs

Entrepreneurship: a definition

Entrepreneurship is a mindset; it’s not a job or a company that someone has

built. Entrepreneurs are people with a vision and a dream; they are agents of

change who want to make things happen innovatively, in a new and different

way. In short, they want to change the world.

13

Entrepreneurship is therefore the mindset that allows an ordinary person to

look at the usual world around them and find unusual alternatives and

possibilities for solving problems and finding solutions that others could not

see.

Being that lone person that needs to steadfastly believe in their vision against

all odds and most specifically defend it against the negativity that will

accompany the introduction of a new idea, concept or product; they will also

need to come up against the rejection of the change they propose and the

upheaval of the status quo while trying again and again to make their vision a

viable reality. Obviously, it would take a special kind of personality to

accomplish all of that.

Entrepreneurs: the profile

“All people are entrepreneurs, but many don’t have the opportunity to find

that out.” Muhammad Yunus

During a highly interactive session, the participants of the workshop

generated a list of characteristics of a successful entrepreneur based on their

personality traits and the characteristics they used to accomplish their

‘entrepreneurial’ activities. An entrepreneur:

1. Has courage

2. Has passion

3. Embraces challenges

4. Succeeds with the business

5. Is adaptable to change

6. Is a risk taker

7. Is resourceful

8. Is collaborative

9. Is open to partnership

10. Is an initiator

11. Is a problem solver

12. Has a vision

14

13. Accepts failure

14. Is a fighter

15. Has good communication skills

16. Has integrity

17. Is proactive

18. Is street smart

19. Is patient

20. Is open to criticism

21. Is creative

22. Is a leader

23. Is knowledgeable

24. Is a coach

25. Is up to date

26. Is smart

27. Is optimistic and a positive thinker

Further discussions and research yielded these insights into the characteristics

of successful entrepreneurs. An entrepreneur is also:

1- A person who needs to achieve

2- Tolerant of ambiguity

3- Self- confident

4- Innovative

5- Aware of opportunities

6- Competitive

7- Able to know when to stop

Additionally, the entrepreneur has a strong desire to realize his vision and will

persevere to see it through. He is a self-motivated, highly energetic go getter

who has ambition and understands markets through his developed commercial

awareness. He thrives on uncertainty, is persuasive, self-disciplined and a

problem solver that is mission driven.

15

Innovation

“You can’t ask customers what they want and then try to give that to them. By

the time you get it built, they’ll want something new.” Steve Jobs

What is innovation?

Innovation in its simplest definition is doing new things, doing things

differently. It covers the full spectrum of the value chain from Product

Innovation to Process Innovation to Organization Innovation to Marketing

Innovation.

According to US – National Innovation Initiative, the intersection of

innovation and insight leads to the creation of social and economic value.

16

« An innovation is the implementation of a new or significantly improved

Product (Good or Service), or Process, a new Marketing method, or a new

Organizational method in business practices, workplace organization or

external relations» OECD – Oslo manual third edition.

Innovation is transforming all businesses as it can even be applied outside

management and technology in such diverse fields as arts and economics.

Anything markedly different can be said innovative. More firms are realizing

the importance of innovation to gain competitive advantage. “The goal of

innovation is positive change, to make someone or something better.

Innovation leading to increased productivity is the fundamental source of

increasing wealth in an economy.”1

Within this definition, innovation can happen in many ways. The result of

innovation is producing value added. Whether it is increases productivity,

lowers costs, finds new markets, or increases market share, innovation leads to

exponential growth. The value chain producing the new product or service is

more compelling than that of a value chain that produces margins generated

by commercial value. Only innovative businesses will be able to grow

exponentially and generate substantial value and new jobs.

Basic Pillars for Innovation (figure 1) – Presidency of the Council of Ministers, Lebanon

1 SAXENA, Rajan, (2002); Marketing Management, New Delhi, Tata McGraw-Hill P.429

17

Why innovation?

The present economic transition and increased competitiveness of the

southern and eastern countries of the Mediterranean are key issues regarding

sustainable development, faced with the challenges of job creation, sector

diversification and adaptation to change.

During the financial crisis, most Mediterranean countries showed remarkable

resilience. They now have to seize all available opportunities to stimulate new

growth, modernize their economies and create jobs because of the high level of

unemployment in skilled people and because a great number of young people

will enter the labor market of these countries in the coming years (60 million

up to 2030).

The IT1 program is particularly useful in those circumstances. Indeed, it can

help Mediterranean partner countries get a better leverage on long term credit

for the Knowledge Economy and take better advantage of the technical

assistance that could be provided through a transfer of know-how.

18

Mediterranean region

“If you always do what you’ve always done, you’ll always get what you’ve

always got!” Alan Scott

“In the modern world of business, it is useless to be a creative, original thinker

unless you can also sell what you create.” David Ogilvy

The southern and eastern Mediterranean market has a GDP of US $1 trillion

and a population of 270 million. The economic mood is improving, with

investor confidence on the rise despite the global crisis that started in 2008.

The region’s strong points are taken into account by European partners: major

infrastructure projects are under way in all countries, stable currencies

support growing markets, the banking system avoided toxic investments in

19

some countries and a well-educated middle class is emerging with a highly

promising 20-to-35-year-old population. All this makes Mediterranean

countries a potential source of growth and competitiveness, owing to their

(still) relatively lower-cost skilled workforce.

However, the Mediterranean countries’ economic situation remains a

challenge. In most countries, the productive system is mainly populated by

small enterprises with a strong specialization in low- and medium-technology

sectors. With few exceptions, industry lacks depth and an international

dimension. Most domestic companies do not meet international standards.

Because small and medium enterprises (SMEs) face obstacles to development

(infrastructure, financing, trade barriers, red tape, weak internet service), they

cannot easily contribute to growth and job creation.

Entrepreneurship, innovation and university-industry relationships are

limited. This explains the relatively weak position of Mediterranean countries

in world trade. Southern Mediterranean countries do not have major

comparative advantages.

To increase their productivity and efficiency, companies need to increase their

interaction with innovators, technology experts, management and funding

advisors. In recent years, innovation poles have appeared throughout the

Mediterranean region. The issue now is to transform these initiatives so that

they benefit the countries’ economy sustainably.

20

Entrepreneurship: the ecosystem

For entrepreneurs to succeed and focus on their vision, people are needed to

help them along the way. People are needed to believe in them, mentor them,

finance them, and make it possible for them to work and dream. This is where

the entrepreneurship ecosystem comes into play.

The components of a sample entrepreneurial ecosystem that is present to some

extent in all the countries that participated in the workshop can be broken

down to main players or stakeholders. For the sake of illustration, we will

focus on the Lebanese entrepreneurial ecosystem and its players which

interact through a grass root, demand driven approach.

On the financing side, it is worth mentioning that in 2000, the Lebanese

government established Kafalat, a loan guarantee private company that has a

loan specifically tailored for innovation businesses. The private sector and

NGOs have since moved to populate this ecosystem. This process is unique in

the Middle East region. The figure below depicts the main players of the

Lebanese entrepreneurial ecosystem.

The Entrepreneurial Ecosystem (Figure 2) – Presidency of the Council of Ministers,

Lebanon

21

In subsequent sections of this booklet, we will focus on some of the players

deemed critical as identified in the exercise of defining the challenges that

entrepreneurs face in the Mediterranean region.

For now, we will highlight the role that incubators play in providing general

support services: mentoring, training, consultations, networking, promotion

and information:

Training: Concepts of Strategic Management, Projects Management, How to

build Business Plans, Feasibility Studies, Marketing and Market analysis,

Legal aspects for establishing companies, Other subjects like intellectual

property, and legal issues related to ICT projects specifically.

Advisory, and consultancy experts and consultants play the role of mentors.

Linking incubates to sources of funding.

Networking

Incubators and incubation services enable the transition of innovative ideas

into competitive products and services. In Lebanon, Berytech plays a

determining role in the entrepreneurship ecosystem:

- Inspire entrepreneurs in technology and offer innovative solutions (through:

communication campaigns, universities roadshow, and participation in local

regional and international events).

- Support technopreneurs, startups and SMEs in an environment conducive to

the creation and development of enterprises, through incubation, business

support, counseling, funding, networking, mentoring, and company hosting,

hence taking part in the economic revival of the country, participating in

wealth and job creation, and retaining graduates and high-level skills in

Lebanon.

- Several pioneering activities: Incubation Awards, entrepreneurship contests,

summer schools & regional academies for entrepreneurs, "from idea to

startup" courses to engineers, Micro-Enterprise Acceleration Programs,

university roadshows, local & international exhibitions & workshops,

Entrepreneurs Forums, startup-weekends, mentoring programs, networking

events, lunch-debates, gala dinners, etc.

22

- To date, Berytech has housed more than 150 entities, assisted more than

2,000 entrepreneurs through outreach programs, disbursed more than US

$350k in grants to startups, and invested more than US $5M in Lebanese

technology companies. It was the first in the region to receive the EU

accreditation of Business Innovation Center (BIC), opening up access for its

companies to international networks.

- Berytech grew from one technology pole in 2001 to another in 2007, and

then the creation of the first venture/seed fund for technology startups in

2008. Recently, Berytech launched a media cluster in Lebanon as well as a 3rd

building entity in Beirut Digital District, supporting more entrepreneurs and

startups. In 2013, a new fund is being raised to provide financial support to

small businesses.

Other players in the Lebanese entrepreneurship ecosystem that must be

mentioned include (but are not limited to):

Bader Lebanon. Bader is a not-for-profit organization with a mission to

provide the necessary tools for the successful launching and

development of high impact entrepreneurial projects in Lebanon with

the aim to promote national economic development and job creation

through education, finance and networking.

Endeavor Lebanon. Endeavor is a not-for-profit organization leading

the global movement to catalyze long-term economic growth by

selecting, mentoring and accelerating the best high impact

entrepreneurs from around the world.

The Mowgli Foundation is a leading mentoring organization

operating across the MENA region. Its mentoring program supports

entrepreneurs’ development by providing trained mentors to inspire,

support and empower them in achieving their business and personal

potential.

The Lebanese entrepreneurship ecosystem is relatively young but is highly

active and dynamic. Every year, in November, and for a 2-week period, all the

stakeholders and entrepreneurs come together as part of the Global

Entrepreneurship Week – www.gewlebanon.org . This provides a great

opportunity for aspiring entrepreneurs to meet with all the players that can

help them and for startups to gain exposure and the possibility of obtaining

additional financing.

23

Challenges & Opportunities

During the course of the 4 day workshop, the participants, with the guidance

of their mentors and trainers uncovered several common challenges faced by

innovative entrepreneurs in Lebanon, Syria, Jordan, Egypt, Algeria, Morocco

& Tunisia.

Unfortunately and due to the makeup of the region, the challenges outweighed

the opportunities. Nevertheless, as entrepreneurship is all about beating the

odds and sticking to a vision until it materializes into concrete results, with

the help of the various stakeholders of the sample entrepreneurial ecosystem

previously discussed, the opportunities, although few, are quite worthwhile.

24

The challenges

“I can accept failure, everyone fails at something. But I can’t accept not

trying.” Michael Jordan

In addition to the risks inherent to the process of creation of innovative

companies, other factors interfere in the failures and shortcomings of such

endeavors on several levels, including:

• The lack of legal and organizational frameworks suitable for innovation

and economical technology transfer.

• Skills at the level of assessment and business assistance are insufficient in

quantity and quality.

• A very limited access to sources of financing for the initial phases of

projects.

• The dearth of autonomous incubators.

• A dominant culture in universities that is not very open towards

entrepreneurship.

Based on these observations, it is obvious that the ecosystems in question

are far from being sufficiently equipped to facilitate the dual transformation

of ideas into successful and competitive innovative businesses, and of

incubates into real entrepreneurs.

In spite of the Mediterranean region’s early contributions to science and

culture as well as the spirit of initiative and exploration, the majority of

Mediterranean countries do not currently play a leadership role in

technological innovation.

Furthermore, technology commercialization requires adequate access to

capital given the uncertainties surrounding the innovation process and the

fact that early development of new products generates few and often, no

profit.

25

Bridging the financing gap is therefore crucial for new firms and the

development of innovation projects.

As per the figure below, there exist major funding gaps pertaining to the

early stages of the innovation process when, incidentally, it is the most

crucial time to obtain funds to concretize the business or process.

A very shy pool of angel investors are attempting in some countries in the

region, through incubators and technopoles, to bridge the first gap but the

major reliance at that stage is still on family and friends’ participation.

Funding Gaps (Figure 3) – Presidency of the Council of Ministers, Lebanon

Other challenges faced by innovative entrepreneurs include the cultural

aspect of a general traditional view of self-employment as being a second

level option for professional success and prosperity and where government

employment is still considered the ‘ideal’ first choice.

Academically, this cultural challenge is felt to a lesser extent as a still

limited number of centers for entrepreneurship are emerging in universities.

Furthermore, due to its lack of visibility on the horizon of traditional

business culture, there is a massive need to support R&D initiatives whether

on the academic level – by creating awareness and research for this need, or

through government programs and incentives.

26

Legal, fiscal and intellectual property protection issues are prevalent

concerns of entrepreneurs in the region due to opaque government

structures and policies and the deficient communication of the very few

innovative initiatives available. Additionally, bureaucratic red tape and the

challenges of infrastructures and the complex processes of company setup

critically impede the speed and agility that should be the hallmark of any

innovation that plans on becoming viable commercially.

Challenges also exist for incubators in the region:

o Lack of national innovation policies

o Gaps in the regulatory and legal infrastructure to support incubation,

innovation and entrepreneurship

o Scarcity of funding sources outside traditional banking sectors

o Reliance on undependable infrastructure

The opportunities

“One doesn’t discover new lands without consenting to lose sight of the shore

for a very long time.” Andre Gide

Being an entrepreneur in the Southern Mediterranean region is definitely a

challenge but it can be met successfully by the creative and resourceful

‘innovation’ entrepreneur. Historically, the greatest asset of all the countries

involved has been and still is centered around their human capital and this is

where the focus should be. On developing the skills needed to become better

equipped entrepreneurs with workshops such as the one this booklet is

based upon.

Additionally, initiatives such as the Innovation and Entrepreneurship

Workshop can create opportunities for constructive exchanges and

productive streamlining of common issues and known solutions on a

regional basis and could ultimately provide greater exposure and market

reach for ‘innovative’ businesses.

27

From the workshop, the participants gained a wealth of connections,

assistance and knowledge:

1. The workshop successfully added much to the participants' knowledge

about innovation, financing and funding of projects.

2. The workshop highlighted the challenges faced by startups and young

entrepreneurs and offered some solutions to overcome these challenges.

3. There is a need to bridge the gap between research and industry.

4. Research, good planning and innovation are key elements for the

sustainability of any project.

5. Knowing how to invest technology saves time, effort and money.

6. The idea is not enough; taking appropriate action is needed.

7. Marketing research should be done and tools for market risk analysis

should be obtained.

Additionally, geographical and cultural proximity to Europe, the important

community of Mediterranean-born scientists based in Europe, and

migration flows of workers, tourists and students give entrepreneurs from

the region the ability to play an excellent role as adopters of technology

developed elsewhere through their absorption of technologies.

28

Conclusion

“In the realm of ideas everything depends on enthusiasm. In the real world all

rests on perseverance.” Johann Wolfgang von Goethe

The group of entrepreneurs from the Southern Mediterranean region came up with some conclusions and thoughts based on their exchange of best practices and know how while learning new concepts and refining old ones with the help of world class trainers and mentors. Some of the topics discussed and covered during the Innovation and Entrepreneurship Workshop include:

29

1. “Unleash the Innovation & Entrepreneurship in Mind”. Challenges that face entrepreneurs; probing questions and comments about innovation, success and failure highlighting the concepts of passion, determination and experience were discussed. A list of characteristics of an entrepreneur was generated by the participants (refer to the section about the characteristics of an entrepreneur). 2. “Scientific Innovation among Arab Youth” the session focused on innovation and invention. Science based innovation was stressed and one of the recommendations was that entrepreneurs should collaborate with Arab scientists and researchers as this blend makes for great success. The Stars of Science program was presented. The program phases are: a. Proof of concept: validity of the novel scientific feature b. Product engineering: functioning product prototype embedding the proven concept c. Product design: packaged prototype towards a professional product d. Business and marketing: feasibility and marketability of the packaged product based on a business plan. Also the idea of taking advantage of all the scientific research and studies by bringing them into the market through entrepreneurs was highly recommended. The importance of the role of media in the Arab world and the credibility of inventions and intellectual property were highlighted. Finally, the need for having a culture of producing in the Arab world, encouraging women working in the field of science and technology in addition to establishing a patent system were the concluding comments of this session. 3. “The importance of Innovation and how to measure it” Linking innovation and entrepreneurship policy and the need to develop entrepreneurial capabilities through a thriving small and medium-sized enterprise (SME) sector: Innovation Strategies and measurements were presented. Most importantly the Buyer Utility Map was discussed and the innovation types were presented. Any innovative project should be entertaining, user-friendly, useful, safe to use, and environmentally friendly. Also the participants learned the difference between making things better and making better things. 4. “Accelerating your innovation” entrepreneurs should think as artists and act as leaders. Also, the importance of having an innovative idea and applying it was discussed. When the idea is not launched yet, it is called creativity; once it is launched and executed into a proper business that will generate profit, it becomes innovation. The brain (represented by a quadrant) is divided into 4 parts representing people's characters as: investigators, evaluators, creators, activators.

30

Therefore, the 4 parts of the quadrant should be used in order to move from creativity to innovation. Moving to another main idea, a survey statistic showed that 80% of customers are not sole brand loyal that’s why you have to be more and more innovative to keep them. There are several types of needs: - Explicit needs: expressed needs – specified (required and desired) – tangible - Implicit needs: implied needs – (essential and taken for granted) - Basic - Latent needs: unanticipated – (surprise) – intangible Moreover, the best characteristics for innovations were listed as follows: - Sustainability of the idea - ROI and ROO - Technically friendly - Consumer target - Uniqueness - Performance - Consistency with the image and vision of the institution - Compliance - Talent What inhibits or blocks your ability to be creative or innovative: Lack of time and Lack of tools. Successful entrepreneurs have dominant characteristics:

Drive/ Passion

Thinking ability

Aptitude for human relations

Technical ability The journey of innovation goes through 4 phases: Investigating needs, creating, evaluating and activating. Finally, market research has to be done before launching an innovative idea. 5. “Intellectual property and patents & Innovation and risk” Discussion of key questions from the themes including: how do companies organize to relate to new innovation processes; how to innovate in alliances and with customers; and how entrepreneurship contributes to innovation. First a presentation about Berytech technology incubator was made. It supports technological entrepreneurs. They provide high-tech environment and the facilities to benefit from assistance in the enterprise, business plan feasibility study and expanding activities etc. Then, intellectual property treaties, laws, registration procedures of IP, patent, trademarks, and enforcement activities were presented.

31

6. “How to create a successful Business Plan” The business plan:

Translates the dreams of the entrepreneur into a map to follow;

is not a collection of spread sheets with a financial forecast;

is the tool which convinces investors to part with their money;

is a selling document The key elements of a good business plan: POCD

People (only if a key person make them partner)

Opportunity

Context (there may be things that happen out of your control)

Deal Entrepreneurs should do things they know and they should know the things they do. They also have to have an idea that is faster, better and cheaper. Good entrepreneurs should calculate the risks. To start a business you should have a market. The business you have in mind must have the biggest market. If you can do your business over the internet the world is your market. 7. “Human Communication Model” Awareness while communicating is the first step to change. Communication is verbal and non- verbal so make sure you communicate using all the aspects. When you are selling, communicate successfully. If you want to change people’s minds you have to influence them. People do not like to be persuaded, they like to be convinced. 8. “A case study” entitled The Little Engineer. It covered the ideas of having the motive to start a business, the importance of having an innovative factor in a business, the procedures for implementing any business, the challenges and overcoming them and the importance of branding and having a trademark. 9. Presentation of the IT1 program “Fostering Innovation, Supporting the Promotion and Financing of Innovation in the Mediterranean” FEMIP 10. “Finding the right investor for your start-up” Developing the basics of company setup and structure, strategy and alternatives for financing. Some resources of financing were highlighted and the differences between angel investors and venture capitals were discussed. Tips on dealing with investors were offered and some mistakes were mentioned some of them are:

1. Complicating the formation process 2. Failing to address founder equity 3. Dwelling too long on valuation 4. Failure to raise enough money

32

5. Spending money too quickly 6. Failing to pick the right advisor 7. Failing to protect intellectual property 8. Failing to set up corporate structure

11. Marketing Strategies & Social Media; Commercialization procedures: technology marketing, technology valuation Entrepreneurs are encouraged to adopt social media because it is:

1. Measurable 2. Cost effective 3. Instantaneous 4. Adaptable 5. Always on 6. Focuses on social 7. Interactive medium

Social media marketing strategy outline Step1: current assessment (online SWOT) Step2: competitive assessment Step3: strategy overview Step4: social communication plan Step5: social strategy implementation Step6: social strategy timeline Define objective and goal

Identify target audience: different audience; different jargon and language

Identify channels to use

Define strategic approach

Identify the KPI (Key Performance Indicators) Final tip: Extract the best strategies of your competitors online marketing 12. "How to Network and your 60 seconds pitch" success factors were highlighted as:

Passion: what could you do all day, every day with a big smile?

Vision: what needs to be done differently in the world?

People: who would you hire if you could hire anybody?

Culture: how would you treat people if it was up to you?

Failure: could you fail and still believe in yourself

33

An effective elevator pitch is characterized by the following:

No more than 60 seconds

Starts with a powerful first sentence

Highlights your management team’s competence

Contains a crisp value proposition and succinct differentiation

Includes a few key numbers e.g. market size, growth, revenues

Mentions investment opportunity and the exit

Avoids false claims e.g. “ killer app with no competition”

Avoids techno-babble and product/ service details What are investors looking for?

Focus

What issues/ problems you solve

USP (unique selling propositions)

Customer acceptance

Experienced and motivated team

Executive summary is KEY

No complications

Visibility and control

Return on investment/ exit strategy Various learning points were gleaned from the several sessions: 1. An entrepreneur should share knowledge, know how to reach people, learn and know how to measure innovation. 2. Entrepreneurs should protect their intellectual property, create a successful business plans and communicate successfully with investors and clients. 3. Entrepreneurs should know their resources, find alternatives for financing, overcome challenges and keep learning. 4. Entrepreneurs should have correct marketing strategies, network with the

right people and put their ideas into action.

The discussions of the different groups during the wrap-up session came

with a list of reflections that they shared and will use to channel their

energies and efforts into making their innovations a reality.

34

Reflections:

Sharing your idea; dare to share

An entrepreneur is a person who needs to achieve

Success is hard earned

This workshop provided tools to fill gaps in our projects

In addition to your business knowledge; you need communication skills

Think outside the box

Internal energy was rediscovered

I acquired skills to better approach potential investors

Acquired convincing techniques to promote my idea

Learn to earn and not learn to learn

Education is not enough, we need practical know- how

The importance of the value added in my idea

Do not depend on one revenue stream only

We better understand the value of partnership in business

Think as an artist; act as a leader

Know your industry before launching your project

We liked the innovation strategy concept

Luck does not exist in business

The importance of positioning my product or service on the innovation maker

The importance of a scientific proof of concept and its respective intellectual property

You have to be the marketer of your idea

The importance of the element of positive surprise

The importance of being able to read my financial records

Choose smart investors

The key elements of a good business plan; the team, the market and finance

The harmony of the session in the workshop

Our new project should be faster, cheaper or better

Innovate or evaporate

Having an idea is not enough; you need the skills, the support & the innovation

Not every idea is an invention; not every invention is a product

The relation between the investor & the entrepreneur should be built on trust

The most successful business is when the market needs meet your passion and desire

Hire A and A+ employees

Recommendations

“You won’t get anything unless you have the vision to imagine it.” John Lennon

Some recommendations came as a natural inference from the observations of the

participants and the activities of the workshop in addition to the expert advice and

input of the organizers and trainers:

To strengthen and consolidate ties, incubators in the different

Southern Mediterranean countries should join efforts to a form a

network that is the catalyst for mutually beneficial interactions

between their respective startups, while investors can partner to

explore cross-border &/or regional investments.

36

Setting up a Mediterranean innovation portal could lay the

foundation for a broad Mediterranean entrepreneurial ecosystem that

can build upon the programs initiated by organizations that have

regional reach such as JCI, EIB and CMI. A pre-feasibility study

could be carried out on an innovation portal to disseminate

information, support innovation, and promote collaborative projects.

From a broader perspective, facilitating international visibility and

partnership for startups in the Mediterranean region will create more

opportunities for them to locate partners who can help them

overcome local challenges.

It is important to concurrently encourage cultural exchange to

develop innovation. Stronger ties inside a collaborative

Mediterranean-wide ecosystem would also accelerate the pace of

change and jumpstart social impact and stimulate economic growth

throughout the region while creating greater overall value.

A renewed Mediterranean identity and branding could include a

combination of quality of life, cultural values, exceptional sites, and

natural products. Such a positioning implies the incorporation of more

technological and innovation content in the Mediterranean production

processes.

Given the constraints (money, availability of leaders, innovation gaps), a

Mediterranean innovation strategy needs to rely on a double effort: the

creation of a Euro-Med innovation and R&D community at an

international level, and, at a country level, innovation poles to nurture

the industrial fabric. The latter, and the private companies they support

(mostly SMEs), are the key to innovation and technological progress.

To link incubation and dissemination of entrepreneurial culture in

universities. To coordinate the incubation policy in universities with

the development of the entrepreneurial culture training.

37

More intelligent and innovative national schemes are need to promote

innovative entrepreneurship where all stakeholders (Private,

governmental and civic and academic) work together to bridge the

structural, cultural and financial gaps that impede the development of

innovation and entrepreneurship in the region.

Identification of legal and regulatory obstacles to innovation systems

to enable Mediterranean countries to pinpoint the legal, fiscal and

regulatory aspects that needs to be targeted for improvement so that

they can be included in governmental agendas. Clarify the issues

related to intellectual property management between incubates,

incubators and universities, and motivate researchers through

royalties.

To review and diversify financial resources and tools to overcome the

financing gaps at different stages of the development of young

innovative businesses. Possibilities include: the launch of a national

program for financial support in the form of grants dedicated to

technological development projects with high potential economical.

All the participants will be part of IT1 workspace on the CMI website

“The Agents of Change in Innovation” which aim to create the first

trial of IT1 online platform and make it available for the community

of agents of change in innovation in Euro-Med.

JCI will promote and advance the IT1 program goal (Supporting the

Promotion and Financing of Innovation in the Mediterranean)

through its upcoming activities in the Southern Mediterranean

region.

38

Further organization of training programs, conferences, workshops

and awareness-raising sessions, in joint collaboration between the

EIB-CMI and JCI, for supporting innovation and entrepreneurship, to

train and ensure knowledge-sharing between decision-makers and

operational managers on topics of common interest.

The positive regional impact of the Innovation end Entrepreneurship

Workshop was such that serious consideration should be given to turning it

into a yearly initiative where young innovative entrepreneurs from the

broader Mediterranean ecosystems can meet to continue bridging

knowledge and know-how gaps while solidifying a culture of exchange and

the embracing of the new and different ways of doing things. JCI Lebanon

would be a prime candidate for hosting such a yearly event.

Final thoughts

”INNOVATION is the specific tool of entrepreneurs, the means by which they

EXPLOIT CHANGE as an opportunity for a different business or a different

service.” Peter F. Drucker

“What we have before us are some BREATHTAKING OPPORTUNITIES

disguised as insoluble problems.” John W. Gardner

This booklet was produced by JCI Lebanon in collaboration with JCI

Syria. It is based on the results of a joint CMI–EIB-JCI Lebanon

Workshop on “Innovation and Entrepreneurship in the Southern

Mediterranean” which was carried out in April 2012 Beirut, Lebanon.

For further information or a more detailed insight into the challenges

and opportunities of Innovation & Entrepreneurship in the

Mediterranean, please contact JCI Lebanon at [email protected]

39