AMMAN — When it comes to the employment and the
economy, “Jordan is heading towards a critical transitional point,” said Laith
Al-Qasem, the CEO of the Innovative Start-Ups and SMEs Fund (ISSF), in an
interview with Jordan News.
اضافة اعلان
“When we look at the demography of Jordan, we find
that around 70 percent of the society is under the age of 35,” Qasem said. This
percentage raises the question of what sectors can accommodate employment for
Jordan’s vast amount of youth.
While the typical percentage of public employment in
most countries does not exceed 20 percent, around 52 percent of the formal
labor force in Jordan is governmental employees, Qasem said.
Since the Jordanian government is the biggest
employer in Jordan, the government in its current state lacks the capacity to
employ more, Qasem said. “Guaranteeing a job in the state after graduation is
no longer an option,” the CEO added.
According to the Civil Service Bureau, Jordan needs
eight years to employ graduates in governmental institutions, said bureau
President Sameh Nasser at a press conferences in August.
Even in the private sector, Asmaa Al-Khaledi, ISSF senior
communications and knowledge management officer, also said that there are
currently limited opportunities at government institutions.
A third door
“Usually youth say that they come to a reality where
finding a job is elusive,” Khaledi said.
“But we in ISSF say that there is always a third door to open, which is
entrepreneurship.”
Entrepreneurship is the inevitable paradigm shift
Jordan needs not only to create new opportunities for people but also to create
a new economic reality, Qasem said.
Although Jordan represents 3 percent of the Arab
World, 24 to 27 percent of the top entrepreneurial institutions are headed by
Jordanians, which accounts for eight to nine times Jordan's population, Qasem
said.
However, ISSF experts have identified some challenges
to the entrepreneurship movement in Jordan.
“With an abundance of investors in Jordan, there is a
clear scarcity in ideas,” Khaledi stated.
According to Qasem, this stems from the type of
educational patterns Jordan has adopted, which “emanated from the industrial
revolution.”
“Industrialists wanted thousands of people of the
same set of skills. However, in the modern innovative era, we rather need those
of unique qualities who will stand out with an added market value,” he
added.
Qasem, nonetheless, noted that Jordan is considered a
top country in terms of literacy and academic education rates. “Our people are
of equal qualifications and skills of any individuals in the developed world,”
he said.
“While Jordanians have high competencies and
capacities, people might ask ‘so what makes other countries more developed?’,”
the expert said.
Qasem believes the main issue lies in the lack of a
clear unified economical vision and a solid ground of regulatory laws and
legislation.
“The biggest problem we had with ride-hailing
services, such as Uber and Careem, is that we are trying to use laws from the
50s to deal with an entirely different industry,” Qasem said, using
ride-hailing services as an example (he is also a board member of Land
Transport Regulatory Commission).
The ISSF, which is the biggest private-sector managed
investment fund program in Jordan, works to not only provide direct funds to
enterprises but also to prepare individuals and set up entrepreneurial
ecosystems that accommodate promising entrepreneurs.
The program came about as a response to a Jordanian
Economic Policy Council recommendation, and it was funded by the World Bank and
the Central Bank of Jordan.
The fund helps with both investments as well as entrepreneurial
programs.
A study conducted by World Bank spotted a gap in
Jordan’s entrepreneurial situation. The gap was inadequate support for
entrepreneurs and pioneers in terms of building their administrative
capabilities and skills as well as the ability to create competitive
enterprises, Qasem said.
To fill this gap and to reach their goal of helping
875 entrepreneurs, the ISSF plans to offer 600 individuals training to grow
their innovations. The fund has trained 325 entrepreneurs so far, Qasem
said.
To support further growth, the ISSF funds two accelerators,
which are “Oasis500 and The Core (HTU)”, Qasem added.
As for direct co-investments, Qasem said that the
ISSF can contribute no more than 50 percent and no less than 30 percent of an
entire investment. And for these enterprises to be funded they must first have
sales, not profits. “Secondly, the founder should have successfully convinced
an initiative or lead investor, which is an entity from the private sector who
will be investing in them as well,” Qasem said.
In addition to creating a culture of investment,
Qasem explained how contributing with lead investors helps to minimize the risk
of an investment.
Therefore, the fund also helps build a systematic and
strategic approach to investment through encouraging supportive entities to
adapt due diligence, said Qasem.
The ISSF found that entrepreneurs struggle and waste
too much time looking for supportive entities, so they decided to work on a
platform that connects all stakeholders, according to Qasem.
“The platform stands as a network for entrepreneurs,
funding and investment programs, accounting and auditing firms, law firms, ect,
so that all players can be found in one place,” Qasem said.
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