Why the Next Silicon Valley Will Be in the Middle East - page 3 | Innovation | Smithsonian
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Why the Next Silicon Valley Will Be in the Middle East

Venture capitalist Christopher Schroeder sees the Arab Spring giving rise to a new innovative center in Egypt and beyond

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(Continued from page 2)

It ranges. Mobile penetration almost in every country certainly exceeds 50 percent. In many of these countries, like Egypt for example, it is literally over 100 percent, which means that people have more than one mobile phone. What’s exciting is that in many respects the Middle East, like other great emerging markets, has never known a world of landlines. So, they are native mobile users and thinking about how to use technology in a mobile environment.

Smartphone penetration in the [Persian] Gulf region is quite high. It is over 50 or 60 percent in some countries and probably less in a place like Egypt, where the proportion is more like 20 percent. But almost everyone I spoke to in the mobile community expects smartphones to have 50 percent penetration in Egypt in the next three years. As Marc Andreessen wrote in the foreword of my book, the world will have 5 billion smartphones in the next eight to ten years. I think in the Middle East you are going to see 50, 60 or 70 percent smartphone penetration within that time.

Is that 50 percent smartphone penetration a number that you’ve seen to be an indicator in other parts of the world? Once you hit and surpass 50 percent, is there a guaranteed spike in innovation?

I don’t think there is any question that if you look at Asia, if you look at parts of Latin America and Eastern Europe, that as greater and greater technology is available not only did you see a rise in middle class and economic output, but more and more companies that are being driven by and innovated around technology. I think there is definitely precedent for it. 

When you dug into specific statistics about Internet use, what were the biggest surprises?

I would not have told you before I got into the data that the number one per capita YouTube consumer on Earth is Saudi Arabia, that the largest plurality of people watching video on YouTube in Saudi Arabia is women and the largest category of videos that they are watching is education. You stop to think about it and it makes perfect sense. If you are in a society where it isn’t easy to get an education in certain areas or the quality of education may not be everything that it could be, and at your fingertips is the ability to be able to get access to any class anywhere in the world, as more of that is starting to get translated into Arabic, it all really kind of fits. It doesn’t seem that surprising anymore.

You have interviewed hundreds of entrepreneurs in the Middle East. How would you describe them? What are the demographics of this population?

The younger generation, 20s, early 30s, has never not known technology and therefore is very comfortable using it and being mobile first in terms of its innovation. A lot of the young people I met had exposure at some point to western education or the West, but hardly a majority of them. 

Probably the biggest thing that hit me like a two-by-four, and in hindsight should have seemed obvious, is that at every event I went to anywhere between 35 and 40 percent of the participants were women. Again, I think a lot of the narrative in the West is to think, well, how can women be participating in this in the Middle East? The fact of the matter is I saw more women on average at a Middle East gathering than I would see on average at a Silicon Valley gathering.

You divide the entrepreneurs into three types: the Improvisers, the Problem Solvers and the Global Players. Can you explain what you mean by each?

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