The story of entrepreneurship in the twentieth century was about individuals who got access to sophisticated capital in a few advanced markets and created massive economies of scale. That’s how AT&T, Home Depot, and Microsoft swiftly made their way onto theFortune 500. But in the twenty-first century, a very different story is unfolding.
Today entrepreneurs anywhere can create value with relatively little capital. Barriers to entry in almost every industry have come crashing down, opening vast opportunities for small companies. These developments are especially apparent in emerging markets, where we’re seeing signs that an entrepreneurial economy is ready to bloom. We’ve spent the past two years studying entrepreneurship in the Middle East, Africa, and South Asia, and we’ve found hundreds of world-class ventures poised for significant growth there. Most people’s assumptions about entrepreneurship in the developing world—that entrepreneurs either don’t exist there or are microentrepreneurs—are wrong. High potential ventures are surfacing where no one is looking for them—in Beirut instead of Boston, in Cape Town instead of Silicon Valley—among people who have historically been outside the economic power structure.
What’s surprising is that so many of these companies aren’t in the fast-growing markets the world is already watching, such as India or Brazil. They’re cropping up in places like Jordan, Saudi Arabia, and Africa—whose economies have been driven by top-down government policy, large business groups, multinational corporations, and even social elites, such as local royalty. Until relatively recently, such places were thought to have a critical shortage of businesspeople who could build companies.
The ventures that we uncovered in our research generate far more jobs and wealth than typical small businesses do, and they often create new industries or open new markets. They include companies like the UAE’s Bayt.com, the leading Middle Eastern job search site, which attracts 4.5 million job seekers; Jordan’s Aramex, the FedEx of the Middle East, which has honed its edge by making deliveries to places global distribution companies avoid; Airblue of Pakistan, the first paperless airline in the world, which quickly acquired a 30% share of that country’s domestic market; and Meeting Point, launched by Christine Sfeir, who at 22 opened the first Dunkin’ Donuts store in Beirut and 10 years later runs 30 stores that, unlike any Dunkin’ Donuts you have ever seen, are elegant hot spots for young professionals. These businesses are scaling up at dramatic rates and introducing exciting new product-market combinations. A case in point is Rumman, the first events and publishing company focused on Saudi Arabia’s large youth market. Operating with a team of 30 recent college graduates, it has become so successful that brands such as MTV now work with it to market to young Saudis.
Countries that want to play in the global economy need companies like these, which are building and redefining industries that satisfy domestic demand and generate export income—not to mention create employment for the rapidly growing younger population. For multinationals, these ventures can be a path to accessing the new ideas, customers, suppliers, and talent of emerging markets. Finding and investing in them may be one key to reenergizing the global economy.