Morocco: How to promote real entrepreneurship?
19 November 2014
Read by 2446 persons
ECONOMY - Morocco is hosting the 2014 Global Entrepreneurship Summit this week. This major event deserves attention and examination of the situation of entrepreneurship in Morocco with appropriate carefulness and to launch a challenge to the country's political, economic and civic leaders.
"More money is spent talking about entrepreneurship than undertaking it"
Recent research and interviews conducted locally confirm the extreme rarity of growth entrepreneurship in Morocco, despite the commendable mobilization of a large number of public, associative and private actors around entrepreneurship. It is not to insult my native country to say that there seems to be many more promoters of entrepreneurship than entrepreneurs. Above all, I have the impression, and I am not the only one to think so, that more money is spent talking about entrepreneurship than undertaking it.
As proof, the microscopic share of seed funding in capital investments in Morocco (2% according to the AMIC study published in 2014) and the abandonment of seed funding by the Numeric fund, supposed to be the spearhead of innovative entrepreneurship in Morocco, due to too low a 'deal flow' and, it seems, following difficulties, the details of which I do not know, on an operation.
Two hypotheses
From this observation, two hypotheses are possible. The first is pessimistic: Morocco would not have a significant independent entrepreneurial potential. The fact that most recent Moroccan "success stories", excluding real estate, have been the work of the Benjelloun, Chaabi and SNI groups partially confirms this hypothesis.
If, indeed, entrepreneurship in Morocco were, for all sorts of reasons, more within the reach of established actors, who would be the only ones capable of identifying real entrepreneurial opportunities, building teams and overcoming structural obstacles, consequences should be drawn for public policies. Instead of vainly striving to encourage young people to start businesses, which they don't seem to do, it would be better to encourage, through classic public policy levers, local businesses, not just foreign ones, to do so in sectors other than real estate.
In this way, the country would give itself more chances of seeing other companies comparable to Marjane, Assouak Assalam, Nareva, Meditel or INWI emerge. Correspondingly, if entrepreneurship with growth potential can only be supported by established companies and entrepreneurs, public policies should then clearly assume that young people struggling with professional integration should be helped to create their jobs, or even a micro-business. And we must also stop calling this entrepreneurship since it is, in fact, simple and yet necessary economic inclusion.
The second hypothesis, more optimistic, is that Morocco has entrepreneurial potential but that this potential has not yet been activated. As proof of the existence of this potential, I cite the number of times I have been impressed by the innovative ideas and concepts of young Moroccans met in various environments. I also cite as proof the quality of the projects submitted to the national competition organized by the Moroccan branch of the American NGO Enactus, present on some sixty Moroccan university campuses.
Let us note and salute, in passing, that the Moroccan finalist team was declared vice-champion 2014 at the world final which took place in Beijing. Finally, I cite as proof the number of young Moroccans who start businesses in Europe or North America, no doubt by personal choice but perhaps also because, unlike their Indian or Chinese counterparts who return to start businesses in their country, they do not yet perceive Morocco as a favorable ecosystem for independent and ambitious entrepreneurs.
Local entrepreneurial potential
At a time when information technologies make it possible to deploy global economic models from anywhere equipped with high-speed internet access, it is regrettable not to be able to locate internationally-oriented start-ups in Morocco. It is unfortunate and symptomatic that Enigma, the promising start-up operating in 'data mining', which raised US$4.5 million in 2014, is located in the...United States.
It is equally regrettable to see that multinational companies choose to create centers of expertise in Morocco because they find well-trained and inexpensive engineers there, and that no local entrepreneurs have yet found a way to benefit from this human capital resource.
Structural obstacles to entrepreneurship
If Moroccan political leaders share the conviction of the existence of entrepreneurial potential in the country, beyond established businesses, they should then tackle the real structural obstacles facing independent entrepreneurs. These obstacles are well known and it is not necessary to dwell on them here. The good news is that, despite everything, there is progress, albeit slow but real.
I would like to highlight here a cultural obstacle that is little discussed in the public discourse on entrepreneurship. This concerns the difficulties related to respecting deadlines and keeping one's word in the business world. For example, young companies, which by definition lack cash flow, cannot survive in an ecosystem where non-respect of payment deadlines is commonplace, so to speak.
A young entrepreneur recently told me that a client with whom they are working on a third project may not have yet paid the invoice for the first. It would seem that the entrepreneur would not be too interested in insisting if they do not want to lose the client. The slowness and opacity of purchasing decisions, frequent changes in ordered services and constant attempts to renegotiate prices create a difficult environment.
These practices are easier to overcome for established companies or groups with their own funds and easier access to credit. It is no coincidence, as I wrote above, that recent entrepreneurial achievements worthy of note have been initiated by groups.
A necessary cultural revolution
I am pleased to see that people are starting to talk in Morocco about incubators and accelerators to support the gestation and birth of innovative young companies. The country absolutely needs them. Once these tools are in place, they will only be able to produce results if the Moroccan administration, economy and society undertake a real cultural revolution to embrace entrepreneurship not only in words but also in deeds.
Let us return to payment deadlines to illustrate the necessary cultural revolution: every client of an entrepreneur should feel morally responsible for the financial health of their supplier instead of putting them in difficulty, voluntarily or not.
"Morocco needs to promote for-profit entrepreneurship"
I am also pleased with the development of social entrepreneurship schemes. In an environment where the state and the market do not allow a part of the population to meet basic needs such as food, healthcare, housing or education, it is good that national and international NGOs intervene to alleviate these shortcomings.
However, the enthusiasm for social entrepreneurship and the activism of NGOs must not end up convincing Moroccans that this is the only mode of entrepreneurship within their reach; real entrepreneurship being the prerogative of national groups or foreign companies.
It should not be forgotten that the need for social entrepreneurship is inversely proportional to the prevalence and efficiency of for-profit entrepreneurship. In an economy that normally produces for-profit companies, in number and quality, enough jobs, tax revenue and wealth are created to allow the majority to meet basic needs and access a minimum quality of life. Social entrepreneurship must mitigate the distributive imperfections of capitalism and not replace it.
For this reason, Morocco needs to promote ambitious for-profit entrepreneurship among its young talents. Imagine what the country would be like if a hundred entrepreneurs created companies each achieving a billion euros in turnover. The total volume of activity generated by this cohort of entrepreneurs would be far greater than the country's current GDP.
In a country of 33 million inhabitants, this hundred should be found. And what if the country's political, economic and civic leaders made this speculative scenario a mobilizing national objective?
Hamid Bouchikhi.
Huffpostmaghreb.com
Published November 18, 2014.
Posted online November 19, 2014.
"More money is spent talking about entrepreneurship than undertaking it"
Recent research and interviews conducted locally confirm the extreme rarity of growth entrepreneurship in Morocco, despite the commendable mobilization of a large number of public, associative and private actors around entrepreneurship. It is not to insult my native country to say that there seems to be many more promoters of entrepreneurship than entrepreneurs. Above all, I have the impression, and I am not the only one to think so, that more money is spent talking about entrepreneurship than undertaking it.
As proof, the microscopic share of seed funding in capital investments in Morocco (2% according to the AMIC study published in 2014) and the abandonment of seed funding by the Numeric fund, supposed to be the spearhead of innovative entrepreneurship in Morocco, due to too low a 'deal flow' and, it seems, following difficulties, the details of which I do not know, on an operation.
Two hypotheses
From this observation, two hypotheses are possible. The first is pessimistic: Morocco would not have a significant independent entrepreneurial potential. The fact that most recent Moroccan "success stories", excluding real estate, have been the work of the Benjelloun, Chaabi and SNI groups partially confirms this hypothesis.
If, indeed, entrepreneurship in Morocco were, for all sorts of reasons, more within the reach of established actors, who would be the only ones capable of identifying real entrepreneurial opportunities, building teams and overcoming structural obstacles, consequences should be drawn for public policies. Instead of vainly striving to encourage young people to start businesses, which they don't seem to do, it would be better to encourage, through classic public policy levers, local businesses, not just foreign ones, to do so in sectors other than real estate.
In this way, the country would give itself more chances of seeing other companies comparable to Marjane, Assouak Assalam, Nareva, Meditel or INWI emerge. Correspondingly, if entrepreneurship with growth potential can only be supported by established companies and entrepreneurs, public policies should then clearly assume that young people struggling with professional integration should be helped to create their jobs, or even a micro-business. And we must also stop calling this entrepreneurship since it is, in fact, simple and yet necessary economic inclusion.
The second hypothesis, more optimistic, is that Morocco has entrepreneurial potential but that this potential has not yet been activated. As proof of the existence of this potential, I cite the number of times I have been impressed by the innovative ideas and concepts of young Moroccans met in various environments. I also cite as proof the quality of the projects submitted to the national competition organized by the Moroccan branch of the American NGO Enactus, present on some sixty Moroccan university campuses.
Let us note and salute, in passing, that the Moroccan finalist team was declared vice-champion 2014 at the world final which took place in Beijing. Finally, I cite as proof the number of young Moroccans who start businesses in Europe or North America, no doubt by personal choice but perhaps also because, unlike their Indian or Chinese counterparts who return to start businesses in their country, they do not yet perceive Morocco as a favorable ecosystem for independent and ambitious entrepreneurs.
Local entrepreneurial potential
At a time when information technologies make it possible to deploy global economic models from anywhere equipped with high-speed internet access, it is regrettable not to be able to locate internationally-oriented start-ups in Morocco. It is unfortunate and symptomatic that Enigma, the promising start-up operating in 'data mining', which raised US$4.5 million in 2014, is located in the...United States.
It is equally regrettable to see that multinational companies choose to create centers of expertise in Morocco because they find well-trained and inexpensive engineers there, and that no local entrepreneurs have yet found a way to benefit from this human capital resource.
Structural obstacles to entrepreneurship
If Moroccan political leaders share the conviction of the existence of entrepreneurial potential in the country, beyond established businesses, they should then tackle the real structural obstacles facing independent entrepreneurs. These obstacles are well known and it is not necessary to dwell on them here. The good news is that, despite everything, there is progress, albeit slow but real.
I would like to highlight here a cultural obstacle that is little discussed in the public discourse on entrepreneurship. This concerns the difficulties related to respecting deadlines and keeping one's word in the business world. For example, young companies, which by definition lack cash flow, cannot survive in an ecosystem where non-respect of payment deadlines is commonplace, so to speak.
A young entrepreneur recently told me that a client with whom they are working on a third project may not have yet paid the invoice for the first. It would seem that the entrepreneur would not be too interested in insisting if they do not want to lose the client. The slowness and opacity of purchasing decisions, frequent changes in ordered services and constant attempts to renegotiate prices create a difficult environment.
These practices are easier to overcome for established companies or groups with their own funds and easier access to credit. It is no coincidence, as I wrote above, that recent entrepreneurial achievements worthy of note have been initiated by groups.
A necessary cultural revolution
I am pleased to see that people are starting to talk in Morocco about incubators and accelerators to support the gestation and birth of innovative young companies. The country absolutely needs them. Once these tools are in place, they will only be able to produce results if the Moroccan administration, economy and society undertake a real cultural revolution to embrace entrepreneurship not only in words but also in deeds.
Let us return to payment deadlines to illustrate the necessary cultural revolution: every client of an entrepreneur should feel morally responsible for the financial health of their supplier instead of putting them in difficulty, voluntarily or not.
"Morocco needs to promote for-profit entrepreneurship"
I am also pleased with the development of social entrepreneurship schemes. In an environment where the state and the market do not allow a part of the population to meet basic needs such as food, healthcare, housing or education, it is good that national and international NGOs intervene to alleviate these shortcomings.
However, the enthusiasm for social entrepreneurship and the activism of NGOs must not end up convincing Moroccans that this is the only mode of entrepreneurship within their reach; real entrepreneurship being the prerogative of national groups or foreign companies.
It should not be forgotten that the need for social entrepreneurship is inversely proportional to the prevalence and efficiency of for-profit entrepreneurship. In an economy that normally produces for-profit companies, in number and quality, enough jobs, tax revenue and wealth are created to allow the majority to meet basic needs and access a minimum quality of life. Social entrepreneurship must mitigate the distributive imperfections of capitalism and not replace it.
For this reason, Morocco needs to promote ambitious for-profit entrepreneurship among its young talents. Imagine what the country would be like if a hundred entrepreneurs created companies each achieving a billion euros in turnover. The total volume of activity generated by this cohort of entrepreneurs would be far greater than the country's current GDP.
In a country of 33 million inhabitants, this hundred should be found. And what if the country's political, economic and civic leaders made this speculative scenario a mobilizing national objective?
Hamid Bouchikhi.
Huffpostmaghreb.com
Published November 18, 2014.
Posted online November 19, 2014.
