From South Korea to Finland, to the UK, to Chile, governments are engaging with startups.

In Finland, the government gives loans to startups, and if they fail, they don’t have to repay the total loan. In South Korea, the government pledged in 2013 to set aside over $3 billion for startups. In the UK mentoring and loans are supplied by the government, while in Chile there is the successful Start-Up Chile.  

Bureaucracy often prevents governments from matching the pace of the private sector. Thus, partnering with startups can help them get certain things off the ground.

Governments are interested in working with startups in sectors that are important to them, from healthcare to security, education to finance. Typically, things like data-driven services, such as visualisation (route planning and mapping for cities), are one popular area in which startups are enrolled to help the government.

Several governments in the region have launched different initiatives: the Kuwait National Fund, the Dubai Future Accelerator and Dubai 100, Lebanon’s Circular 331 and the UK Lebanon Tech Hub, Jordan’s Investment Council, which introduced tax incentives for the ICT sector in Jordan, and Saudi Arabia’s King Abdullah University of Science and Technology.

While some might disagree with the notion that government and startups can be intertwined, the general consensus seems to be that one needs the other to flourish.

Recently Wamda Capital’s Khaled Talhouni sat down with Najla Al Midfa, general manager of Sheraa, an initiative of Shurooq, the Sharjah development and investment authority, and Ned Jaroudi, managing director of 1776 in Dubai, a global incubator, specifically focusing on the industries government needs to tackle.

Joining in the discussion about how government and startups are well suited to working together, Jaroudi brought with him Fowzia Mahamed, founder of Educare, a learning management platform that supports students, schools and hospitals to work with students with chronic illness.

Al Midfa brought with her Hashim Al Zaabi. His startup Tayar is a hardware and software solution that allows users to monitor and control electrical devices through their smartphones, and also strategizes methods for more efficient energy consumption. He was in Sheraa’s first cohort.

The breakdown:

0.17 - The guests introduce themselves.

1.30 - Najla Al Midfa talks about Sheraa, how they came about, and what they are offering students and graduates in Sharjah.

4.32 - Khaled Talhouni asks the guests for their view on the overall university landscape in the region and how they’re fostering entrepreneurship.

5.12 - Al Midfa talks about how all universities across the region need a platform like Sheraa - graduates needing the skills to enter the labor market.

7.02 - Ned Jaroudi agrees with Al Midfa, seeing practical incubation platforms as being important for people to try out their ideas. At the other extreme, there is the longer term programs like the mandatory entrepreneurship innovation course that the UAE has put into public universities. Other countries in the region can look to the UAE as an example of what to do.

8.20 - Fawzia Mohamed says there is a need in the education space, to learn skills particularly in the fields of entrepreneurship, intrapreneurship and innovation. This would give students the skills to navigate any sector.

9.15 - Jaroudi adds that 1776 wants to help incubators and augment the training they provide and give them access to their platform Union. This would mean that at any point, whether in a program or at home, people who want to learn about something they can access modules to augment the lessons they are already receiving elsewhere.

10.11 - Al Midfa sees students getting out of their bubbles. There is an additional need for collaboration. Internally, they have a team that works on skill building. The average age of a team is about 25 years old, and she sees this as a reason why they could build their community so quickly.

11.58 - Hashem Al Zaabi says there is a problem with gaining experience so when you graduate there is a steep learning curve. It’s hard to be employed, even with one degree. Working for a  startup while studying is a great way to learn skills for the job market.

12.39 - Al Midfa mentions that their indirect effect is that their workshops are open to the community as a whole, from tech to communication skills. She also talks about how their incubator came into place - putting teams into an accelerator before they were ready made them realize they needed an incubator.

15.39 - Jaroudi talks about the benefits of their new platform Union.

16.23 - Al Midfa says that mentorship was the most valuable component for students at Sheraa. So platforms like 1776 ad Union will allow not only local, but international exposure to mentors.

16.57 - Jaroudi talks about how the partnership between 1776 and the Dubai government came about. They pivoted last year to become a software and content company supported by physical incubation spaces. The 1776 founders came from government so they have very strong ties with the government and know about government challenges and issues. Startups operating in the 1776 world are in highly regulated industries, from education to healthcare, energy and transport, and security -  which are key sectors for the government. Their point MoU? It is to help make Dubai and the UAE more startup-friendly, to look at regulations, to tap into global startup ecosystem and to bring startups over to work with the government on their challenges, in addition to help government organizations internally to think like a startup, and to help the local and the regional startup ecosystem scale up globally.

21.41 - Mohamed talks about the role startups play in solving governmental and societal challenges in general, and how being with 1776 has enabled her to access healthcare data that she needs for her startup, to pilot test her ideas, and to have access to local and global mentorship.

23.45 - Al Zaabi says that if there were testing areas for startups, they could be provided by the government and within the government. That would be beneficial for startups.

25.18 - Al Midfa comments on how she has seen the ecosystem change in the last seven years. Customers need to take a chance on startups and provide more support, whether to private companies or to the government. For different tracks, Sheraa have partnered with big companies in those sectors, such as Air Arabia for their travel track.

27.01 - Jaroudi talks of his 20 year experience. The difference in the Dubai ecosystem is like night and day. It is maturing and giving startups the opportunity to test their solutions with their best foot forward. They have 50 institutions in the US that engage with startups and test the products. He also discusses the remaining funding gaps in the Middle East.

31.22 - Al Midfa speaks about the funding that they provide to startups coming through Sheraa. She thinks it is the private sector’s role to help these startups. She has seen at Sheraa the phenomenon of second and third generations of family offices looking to deploy capital in startups.

32.37 - Talhouni and Jaroudi agree with the small trend. A lot of family offices that have grown are now finding that their position is becoming somewhat challenged because of this disruption, particularly with retail.

Feature image via Sheraa.