Presented at the July 2012 Meeting of the OECD-MENA Initiative's Working Group on SME Policy, Entrepreneurship and Human Capital Development http://www.oecd.org/mena/investment

1. NEW ENTREPRENEURS AND HIGH GROWTH
ENTERPRISES IN THE MENA REGION
CONCLUSIONS AND POLICY IMPLICATIONS
Antonio Fanelli
OECD – Private Sector Development Division
Rome, 17 July, 2012

2. Research questions and conclusions
Where do MENA economies stand in terms of
high performance enterprises vis-à-vis
developed and other emerging economies?
 While the number of enterprises in MENA is
lower than in other emerging markets, the share
of high potential enterprises is comparable.
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3. Research questions and conclusions
 What obstacles prevent high potential
enterprises in MENA from becoming high
performance?
 A inefficient and non-transparent regulatory
environment, corruption, a lack of external
finance, and a shortage of skilled staff.
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4. Research questions and conclusions
Is there evidence of an incoming new generation
of entrepreneurs?
 A new generation is indeed emerging. Work
experience and high education are critical for
success. The gender gap persists but appears to
be narrowing. Further analysis is required.
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5. Research questions and conclusions
 Is the business environment conducive to high
performance firms? What can public policy do to
promote high performance firms and what are
MENA governments doing in this regard?
 The transition from high potential to high
growth is affected by inefficient and nontransparent regulatory environment, a lack of
external finance, a shortage of skilled staff, and
distorting competition of incumbents.
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6. Policy implications
Two sets of broad policy recommendations emerge from the
report:
1) Improvement of the business environment for all
enterprises.
Objectives: To increase the pool of formal enterprises and
develop a level playing field.
2) Measures targeted to high-growth enterprises.
Objectives: To facilitate the transition from high potential
to high growth and improve growth performance.
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7. Businesses environment - 1
Five priority areas:
1. Regulatory policy and regulatory simplification
in order to lower the administrative burden and
to increase competition;
2. Increase competition and diversification in the
banking and financial sectors;
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8. Businesses environment - 2
3. Increase women’s participation in the labour
market and in enterprise creation;
4. Legal and judiciary reform to improve contract
enforcement;
5. Human capital development to improve skills
and promote an entrepreneurial culture.
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9. High-growth enterprises - 1
Access to finance:
• External equity financing, either provided
by business angels, seed funds, venture
capital or equity funds;
• Stimulation of the eco-system for equity
financing;
• Introduction of credit guarantee facilities
for enterprises whose main assets are
intangible.
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10. High-growth enterprises - 2
Skills development
• Tailored publicly-funded training schemes;
• Voucher schemes allowing enterprises to select
the trainers or advisors;
• Internship programmes with universities and
vocational institutes;
• Hiring programmes for new graduates
supported by public funds (i.e. Tunisia).
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11. High-growth enterprises - 3
Develop linkages programmes:
• Connect high potential SMEs with large
companies and multinationals;
• Target the advanced business services sector
(ITC, consultancy and accounting services, etc),
relatively under-developed in the MENA region;
• Help SMEs in learning how to work with large
companies and multinationals and in adopting
quality standards.
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12. High-growth enterprises - 4
Three additional horizontal areas:
•Introduce an active gender policy to reduce the
gender gap;
•Ensure the provision of reliable and low cost
public services (enterprise/industrial locations,
power supply , ITC services, etc);
•Remove obstacles to business entry and
expansion through sectorial reviews of the
competitive and regulatory environment.
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13. Final policy implications
 There is no magic formula leading to an
increase in the number of high growth
enterprises;
 Policy experience is built through piloting,
testing and careful evaluation;
 Experimenting could offer new insights and
open new perspectives;
 The current context provides an opportunity for
moving towards a more inclusive and evidence
based policymaking.
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14. Antonio Fanelli
Deputy Head
OECD - Private Sector
Development Division
E-mail: antonio.fanelli@oecd.org
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