“What if we could realize innovation through social entrepreneurship in Egypt?”
Almost 10 years ago, RISE was founded in times of political and economic uncertainty, reliant on the notion that solutions could be built from the ground up by entrepreneurs who were taking on some of the country's most vexing development challenges. A decade later, we’ve seen a visible and concrete vibrancy in the ecosystem and in the potential of solving these challenges together.
However, the current global economic situation is proving difficult to weather for an ecosystem that’s been building itself over years. We wanted to take this chance and circle back around with our partners to gain insight into what they’re seeing on the ground and put our heads together about how we can consolidate our gains, weather the storm together and move forward to support the ecosystem.
Special thanks to our partners at Athar Accelerator, Enroot and enpact for their valuable insights and continued support.
Flying Blind: Challenges Facing The Ecosystem
Ambiguity and lack of transparency
The scarcity of reliable, centralized information outlining the parameters, extent and foreseeable implications of the crisis is causing an ecosystem-wide state of unrest. The lack of information in the macro-economic environment is causing general demotivation and increased risk aversion in Entrepreneurs, hindering support organizations in the assessment of the issues at hand and formulation of the know-how needed to navigate them, and causing a heightened sense of caution and reluctance in investors.
Dispersed business support environments
Enablers within the ecosystem are working in isolation, leaving greater room for duplication of efforts, lack of cohesion in terms of shared goals, perpetuation of disparities in support opportunities and a subsequent hindrance to the cultivation of collective intelligence for community driven action.
Limited access to funding and financial management
Economic challenges have caused investment to slow down significantly across the MENA region. According to Wamda, in April 2023, startups based in the Middle East and North Africa recorded a little over $7 million raised in funds, a drop of 97 percent compared to March 2023 and a 99 percent drop compared to April 2022. There’s increased competition for funds and a simultaneous gap in the technical know-how of captivating investors’ interest, which is inherently inclined towards favoring commercial attractiveness as much as social impact. In the face of economic difficulties, there is, furthermore, dire need for optimized financial management processes, which in such unprecedented and fast-changing conditions, entrepreneurs are ill-equipped for.
Crisis Into Opportunity: Strategies for Startup Resilience
The good news is that challenges are often grist for entrepreneurs, motivating them to climb new mountains and explore new frontiers.
Limitation as a north star for innovation
Economic challenges can act as an opportunity for entrepreneurs to respond effectively by pivoting or reinventing their business models in a manner that recognises, evaluates and exploits new opportunities present in the very challenges they’re facing. An example is Sal7lyy, a startup, which connects users in Upper Egypt to technicians and repairmen. Sal7lyy effectively utilized the recent inflation of prices by crafting a business model that recognizes the subsequent increase in motivation to fix already-owned appliances instead of buying new ones.
Demystification of hardship
Given constriction of resources in the current environment, entrepreneurs have begun naturally gravitating toward sharing knowledge and material resources to bolster one another's business prospects and collectively weather financial shocks in this moment. As business support organizations, we see this as an opportunity to further invest in maximizing the visibility of resources that already exist in the ecosystem, strengthening relations with peer organizations, and generating aligned, actionable and accessible information outlets for entrepreneurs that would help decrease collective uncertainty, as well as cultivate an ecosystem-wide habit of knowledge generation, knowledge sharing and data-based decision making.
Cultivation of a culture of collaboration: Closing thoughts from us at RISE
Shared difficulties present an added incentive for collaboration. Breaking out of individual thinking into collective thinking and the subsequent creation of symbiotic relationships between actors in the ecosystem can increase the collective ability to tackle common challenges that lie beyond individual reach. This is at the core of LEEP For Collaborative Impact’s mission of creating a space that facilitates collective intelligence and shared resource exchange through visualized data, shared investment opportunities, a platform and programming for knowledge exchange between stakeholders in the ecosystem.
By Habiba Ibrahim, RISE Strategic Communications & Program Support Lead
Interviews by Fatema Mahmoud, Former RISE Communications Associate