Teaching Entrepreneurship in the Arab World

Mohamad Hodeib speaks passionately about global expansion, stock options and the long, Red Bull-fueled nights spent drawing up the business plan for B-Com, his half-year-old start-up company that makes clothes with witty slogans. It's not something you'd expect to hear from a 17-year-old high-school student from Deir al-Zahrani, Lebanon, a poor village in the Hizbullah-dominated south—nor, for that matter, anywhere else in the Arab world. Hodeib says he caught the business bug from a school project run by Injaz al-Arab, an organization that sends volunteers into schools to teach kids about entrepreneurship. His regular classes are too boring, Hodeib complains: "All we ever do is memorize facts for the exams."

If the Middle East is to have any shot of making up for decades of past stagnation, it's going to need many more kids like Hodeib, eager to build new companies and create new jobs. That's the rationale behind a small but growing movement of educators and CEOs, Western aid agencies and multinationals, royals and even Islamists, who are now trying to inject the entrepreneurial virus into the region's youth. From the Maghreb to the gulf, the Arab world is abuzz with a new form of activity, taking shape in student entrepreneurship programs, business-plan competitions and brand-new engineering schools set up to teach Arab techies how to build a better start-up. These new programs have one goal in common: to improve the region's abysmal rate of business creation and diversify its economy away from oil and the public sector.

More than anything, these efforts are being driven by demographics. Up to 70 percent of the population in the Arab world is under 25 years old. Employing them will take the creation of 80 million new jobs by 2020, according to the World Bank. Getting there means achieving twice the job-creation rate the United States managed during the go-go 1990s. "The public sector isn't going to create these jobs; big companies aren't going to create these jobs," says Fadi Ghandour, CEO of the Jordan-based express courier Aramex and a leading educational philanthropist. "The stability and future of the region is going to depend on our teaching our young people how to go out and create companies."

That's a tall order anywhere, but especially here. Many Arab states still struggle with a culture that looks down on capitalism, and schools that focus on religion. With a few exceptions such as Jordan, Arab countries rank near the bottom in international student-achievement tests. At the center of the problem, says Hassan Bealawy, adviser to the Egyptian minister of Education, is the region's preference for teaching methods that emphasize mind-numbing memorization and deference. Mona Mourshed, author of a recent McKinsey report on Arab education, recalls seeing signs that read be silent, mind your work, keep tidy, don't speak up, in a gulf-region classroom. No wonder Soraya Salti, the Jordanian businesswoman running Injaz, concludes that "our schools have been producing government robots—good at following instructions but not at thinking outside the box."

Good bureaucrats, of course, aren't much use at creating jobs or competitive companies. Salti's organization hopes to change that by teaching high-school and college-age kids business, networking and start-up skills. Injaz has recruited 4,000 private-sector volunteers who teach in hundreds of schools in 10 Arab countries, including Egypt, Oman, northern Iraq, plus the West Bank. This year, 120,000 students will graduate from Injaz's programs, double the number in 2006. "These kids are more valuable than an oil well—they're the kids on whom to build an economy," says Khaled Rodan, one of the corporate volunteers in Kuwait.

A similar process is taking place in the region's universities. On the eight campuses of the Higher College of Technology in the United Arab Emirates (where more than 60 percent of engineering students are women), entrepreneurship training is now a required subject. To popularize start-up creation, MIT entrepreneurship guru Ken Morse helped set up a Pan-Arab business-plan competition, based in Lebanon. Thanks to a popular campaign by an Arab satellite-TV station, the contest drew more entries in its first year than MIT's own version. The winners, Lebanese programmers who had developed interactive math-teaching software, won a $50,000 prize and mentoring from Morse and other top U.S. professors.

Of course, turning young Arabs into budding tycoons still faces cultural hurdles. To start, there's no Arabic word for entrepreneurship—something the Washington-based Center for International Private Enterprise is working to remedy. Language also complicates things in Saudi Arabia, says Morse, where entrepreneurship promoters had to rebrand the American notion of "angel investors"—rich mentors who foster start-ups—as something less Christian (they came up with "uncles' network").

In Egypt, reformers like Bealawy have been attacked by traditionalists for "Westernizing" the curriculum. Yet he has discovered unlikely allies; some of Egypt's most prominent religious leaders have lately started preaching the entrepreneurship gospel. Amr Khaled, an Islamic "televangelist" whose Web site and TV shows have millions of young followers, now exhorts Arab youth to study hard, stop being "leeches on the blessings of Allah" and "create a job, don't wait for one."

Still, building a more business-friendly environment will take a lot more than changing attitudes and curriculums. Many Arab countries still place countless obstacles in the way of business creation, from endless red tape to punitive debt and bankruptcy laws (bounce a check in Egypt, and you can land in jail). Yet that, too, is slowly changing, thanks to reforms such as cutting the absurdly high fees many countries charge for registering a business. And groups like Injaz are working to ensure that more young Arabs are ready to take advantage of the changes when they come.