Beirut wants to be the tech hub of the East: here's how they can do it

November 14, 2016

 

Beirut held a major event a few weeks ago sponsored by its central bank, Bank of Lebanon (Banque de Liban).  Dubbed the largest conference on the Mediterranean, the event was a resounding, immediate success.  For starters, the conference is free.  This allows anyone the opportunity to explore their business savvy anywhere from pre-ideation to series A funding.  The talks focused on coding, finance, innovation, business ecosystems, and included a keynote address from Steve Wozniak.  Yes, THAT Steve Wozniak, the Silicon Valley icon co-founder of Apple.  20,000 people attended the conference this year, such a large increase in attendance year over year that the conference had to be moved to a larger venue.  Networking opportunities were everywhere, optimism in a region that is so often lacking it was palpable, and the aim was quite clear.

 

Many of the speakers yearned for the same vision to come to fruition:  Beirut will be the new Silicon Valley.  Historically, this makes sense.  Lebanon sits at the crossroads of East and West, and the ancient Phoenicians that once occupied this land were such a successful sea-faring merchant people that they literally exported the modern ability to write.  Their ancient alphabet was spread by the sea-faring Phoenicians to Anatolia, North Africa, and ancient Greece and eventually to Rome itself.  Beirut has remained a key, vibrant city on the Eastern Mediterranean since that time.  At present, the following major cities are within a 4 hour flight from Beirut:  London, Paris, Rome, Frankfurt, Geneva, Athens, Cairo, Istanbul, Dubai, Riyadh, Abu Dhabi, and Doha, just to name a few.  Those European cities are not a 4 hour flight from Dubai, for example, and the far east markets of Tokyo, Singapore, Hong Kong, and Shanghai are not that much closer to Dubai than Beirut.  Lebanon also has a highly educated, multi-lingual, religiously pluralistic and diverse population.  Its best university, the American University of Beirut (AUB) is rated in the top 500 (number 228 to be specific) globally by the influential Quacquarelli Symonds Rankings.

 

I can hear the naysayers now.  “The country doesn’t have 24-hour electricity.”  “They seem to be constantly at war”.  “The internet is ridiculously slow”.  Ok, I get it.  Yes, the country doesn’t have 24-hour power, but it’s not for a lack of power lines, just a lack of will.  I know it’s easier said than done, and the solution seems impossible, but Lebanon, and Beirut in particular, has spent more of its history with 24-hour power than without it.  My prediction:  24-hour power will come soon enough when enough businesses either demand it or create it themselves.  Regardless, did I mention that Lebanon has 330 sunny days, on average, per year, so affordable solar power of the future may make the electricity issue moot anyway.  About those wars; this is not the Lebanon of the 1980’s.  Despite the conflagration in the region, Lebanon has remained largely untouched by the massive destruction occurring elsewhere since the Arab Spring began in 2010.  Protests have been somewhat effective but also largely non-violent and non-lethal.  The country still shows some scars by its 15 years of civil war in the 70’s and 80’s, but research also indicates that surviving this type of war 25 years ago actually has a protective effect now, lessoning the likelihood of conflict when it may seem that conflict will happen all too soon.  In short, Lebanon is not the tinderbox that many people think it to be, even if the people don’t always know it themselves.  As for the Internet being ridiculously slow, yeah, that’s my problem, and that’s not going away anytime soon.  But even this may not matter soon enough with cloud computing, distributed processing, and plans from some companies for global Internet coverage.  It’s not the infrastructure, however, that gives Lebanon an advantage and why they might actually be able to achieve the next Silicon Valley and perhaps, with time, surpass the current one. 

 

Lebanon has a major trick up its sleeve:  women.  Ever since 1921 (even before many US universities did the same), when AUB decided to be a co-educational institution, Lebanon has led the Middle East-North Africa region in terms of women’s rights.  Are there improvements to be made in equal rights?  Absolutely there are, but when it comes to equal rights to education and work, Lebanon is second to none in the region.   Numerous studies have found that the reduction in gender inequality of the work force leads to significant economic gains for the given country.  What is more, according to a study in 2014 by business consulting company McKinsey &Co. titled “Women Matter”, it turns out that economic equality is also good for business.  Companies that provide leadership opportunities for women show greater organizational effectiveness, scoring higher in all levels measured.  And what do women tend to do with this money?  It turns out that they are far more likely than male counterparts to spend money on their children, thus ensuring the opportunities they worked for will be more likely to be available to future generations. 

 

But passing Silicon Valley, is that really possible?  If we believe the report referenced above, and account for enough time to grow (which in the tech industry may not be the lengthy time horizons that people think), considering these sobering statistics about Silicon Valley might open your eyes.  At present, women make up 59% of the U.S. labor force and 51% of the U.S. population.  However, in Silicon Valley, women make up only 29% of the labor force.  I can hear it now, “But I thought tech was so dominated by men that this number actually seems ok?”  That’s where the problem is.  Consider product development jobs, and that number for women drops to 16% of positions.  Consider leadership roles, and the figure is only 22%.  This is remarkably consistent among all major tech companies in Silicon Valley from Apple to Google to Microsoft, Facebook, Twitter, Amazon, and on and on.  What this means is that an industry planning, developing, and selling products to 100% of the population has a stunningly large percentage of men making the major decisions in product development and strategy, with an equally stunning percentage of men in those same roles to provide any kind of feedback.  Additionally, that pay gap statistic everyone loves to quote:  “for every dollar a man makes a woman makes 77 cents”, it’s worse in Silicon Valley.  For equal positions there, men make 61% more money than women (that’s 62 cents for every dollar a man makes).  The issue is so ingrained now that only 18% of US university computer science graduates are women, compared with 37% in 1985.  These numbers are a little harder to find in Lebanon, but these proxies from ArabNet (e-commerce and e-industry news web site) show a glimmer of hope for tech-savvy women.  At ArabNet’s events, in 2010, only 17% of technology attendees were female, but in 2015, that number rose to 40%.  Since 2010, 21% of entrepreneurs pitching ideas were female, but 27% of all funded startups were from females.  There certainly is room for improvement in Lebanon for gender quality in technology education and career positions, especially positions of leadership.  But in Silicon Valley, only 10-15% of seed and venture capital goes to startups with a female cofounder.

 

It seems trite to say that women will be the reason for Beirut’s success or failure as a technology hub given all the advanced metrics available today, but have you ever wondered why Silicon Valley is in California and not in New York City, Washington DC, or Boston?  Essentially, it’s because a man named William Shockley left Bell Labs to move to Mountain View, California, believed that silicon was better for making transistors than germanium (which everyone else was using at the time), and started a engineering company (which he eventually left with some, shall we say, bitterness).  Gordon Moore (yes, the More of “Moore’s Law”) founded a new company out of the eight engineers that remained.  That’s the abridged story of an engineering company called Intel.  Apple, Lenovo (formerly IBM), Hewlett Packard, and Dell all run computer processors supplied by Intel.  Silicon Valley exists where it does simply because a man had a disagreement with the major physics lab of the time, which happened to be located in New Jersey, and moved across the country.  Without that disagreement, Silicon Valley as we know it might be in New Jersey.  That simple choice of living circumstance then may be the simple choice of employing or funding, or frankly allowing more women into the tech field today.

 

If Beirut really will become the next Silicon Valley, it won’t be because of infrastructure or its location on the globe.  It will be because recognizing talent means recognizing that this talent may not look exactly like you.

 

 

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