1st Working Group Meeting of the ARAB-EU Business Facilitation Network Marrakech, 16th of February 2014 1
Agenda 16. Feb. 14 Time Subject Presenter Welcome by CGEM & Information about the Maghreb Entrepreneurs 10.00-10.45 Forum CGEM Welcome by DI DI Round the table on latest news: economics and politics 10.45-11.15 Update and discussion of the creation of the B2B platform UTICA 11.15-11.25 Update on the SME conference JCI 11.25-11.45 Coffee 11.45-11.50 Presentation and adoption of the 2013 annual report DI 11.50-12.00 Presentation on rationale behind 2014 cooperation DI 12.00-14.00 Selection of policy issues for 2014 DI 14.00-15.00 Lunch 15.00-16.00 Policy issues cont. DI 16.00-17.00 Future formalization of the AE-Network: presentation & discussion DI 20.30 Network dinner at the hotel All
Welcome by CGEM Update on the conference 3
Welcome by DI 4
16 Feb. 14 Maghreb Initiative of Commerce and Investment (IMCI) A Private Sector Initiative by the Union Maghrébine des Employeurs (UME)
Purpose with the IMCI Regional trade integration in the Maghreb! Because: Absence of regional integration is costly: 530 billion USD is lost each year due to trade restrictions and legislative barriers Bilateral trade with the EU is much larger than regional trade A private sector initiative is imperative! 6
Drivers of opportunity Regional integration will strengthen global competitiveness through better use of comparative advantages. Comparative advantages - Natural resources - Critical mass of consumers - Young and skilled human capital - Geostrategic position - Cultural heritage and biodiversity Tangible gains - Reduction of transaction costs - Economies of scale - Resistance to external shocks - Generate innovation - Competitive goods and services Global visibility - Regional value chains - Global diversified markets - Attraction of FDI - Trade negotiations - Benchmarking 7
Challenges Current state: Very limited intra-regional trade: tariff barriers and customs, nontariff barriers, infrastructure Lack of international attractiveness: little diversification in products and services, little diversification in external trade, little FDI Unemployment and brain drain: limited mobility, non-flexible job market, non-adapted education Current context: Formation of regional blocs, climate changes, food security, population growth, social instability, urbanisation 8
Action plan 2 dimensions short term, medium term, long term. Trade and finance Policy action UME Organisation UME Permanent Secretariat Customs Sectorial committees and expert groups Infrastructure Strengthen UME-UMA partnership Business climate Business roundtables Markets and jobs International liaison offices Education and training Annual report and forum 9
News & Updates from around the table 10
Update and discussion of the creation of the B2B platform - UTICA 11
Update on the SME Regional Conference 28th- 29th of April - JCI 12
Coffee Break 13
Annual Report of the Arab-EU Business Facilitation Network 14
Selected achievements: Entrepreneurship & SMEs SME Seminar in Egypt Lobbying for the establishment of a General Authority for SME development, the idea being a one-stop-shop for SMEs SME Technical Support Unit of JCI Enhancing the business environment for SMEs Increasing the level of self-sufficient SMEs Supporting the financial institutions programs directed to SMEs Conducting research and analysis for serving the SME sector 15
Selected achievements: Competitiveness & Investment Red Carpet Program Simplified Danish Schengen procedures Egyptian Food Catalogue 16
Selected achievements: Social Dialogue CGEM: Signing of a social pact with three trade unions in order to enhance and increase the cooperation Three workshops have been conducted in anticipation of reaching consensus regarding a future education system A common workshop has been conducted about conflict resolution and mediation with participation from international experts Libya Social dialogue conference has been conducted, brining together the social partners in Libya, the relevant political stakeholders, the World Bank, ILO and labor markets experts from Tunisia and Denmark Report has been written about the impediments for social dialogue in Libya 17
Rationale of 2014 cooperation 18
Project partners & Scope ARAB-EU network Regional Integration, Trade Policy, Trade promotion and Internationalization Bilateral projects Morocco Libya Tunisia Egypt Jordan Organisational development (business services, communication, strategy, labour market, finance, boardtraining, export promotion, sector development, policy advocacy etc.)
Project partners & Scope II 2014 Regional integration Social dialogue Organisational development 2015 Regional integration Organisational development Social dialogue Start-up MENA 2016 To be define
Start Up MENA The leading initiative to foster innovation and entrepreneurship in the MENA region
There is a great entrepreneurial drive in MENA more than any other emerging economy Opportunity driven entrepreneurship 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Asia Hi. Inc Europe N. America, Oceania MENA Asia Lo. Inc Latin America Africa *Based on young enterprises that are between 4 months & 2,5 years Source: Reynolds, 2013 (forthcoming)
And there is a large well educated (unemployed) workforce ready to build startups 35% Unemployment rates in 2000 and 2009 Most among youth, women and educated 30% 25% 20% 15% 10% 2000 2009 5% 0% Source: World Bank 2011
The MENA region also benefits from low costs of operation and a huge Arabic home market Large home market approx. 400 M Access to affordable housing Highly skilled and low cost workforce
The MENA region therefore posses many of the right ingredients to drive innovation through entrepreneurship
However, the MENA region is starting from a relative low starting point Percentage of newly registered Limited Liability firms relative to the countries working population (2004-2009 averages) Sub-Saharan Africa Middle East & North Africa East Asia & Oacific South Asia Latin America & the Caribbean europe & Central Asia High income 0 1 2 3 4 5 Source: World Bank 2010, Clapper and Love 2010
Compared to the leading startup ecosystems in the world, many MENA countries still has potential to improve Mature NYC / Silicon Valley / London Semi mature Barcelona / Berlin Less developed Most of MENA Vibrant startup scene Tens of startup events every day, many international events Several events per week. Also international events Some events, but not widely devoloped, mostly local Role models and mentors Many people with big exits, many mentors who advice startups for free Some role models and some access to experienced entrepreneurs Few role models and not widely access to experienced entrepreneurs as mentors Easy access to seed and venture funding Many educated angels and many VC s, many international Some angels and VC s, but mostly local Few angels and VC s, almost all local Exit opportunities Easy access to IPO and corporate buyers Some but not easy Not easy Co-working spaces Many Some Some, but not many Accelerators 25 + per city and leading brands like Techstars and Startupbootcamp 10+, mostly local, but also some international Few, mostly local
We are therefore creating Startup MENA as the leading initiative to foster innovation and entrepreneurship in the MENA region by building on the strong local heritage and adding best practice from EU and US
The ambition is to create an integrated startup ecosystem across the region with strong local presence and a regional hub in Dubai Casablanca Tunis Beirut Amman Cairo Dubai Riyadh
In each country we will build a startup ecosystem based on a proven model and combining best practice from EU/US with local needs Phase 1 Phase 2 Phase 3 Building the basics of the eco-system Examples: Pitch events Hackathons Mini bootcamps Term sheet battles Match making events between startups and corporates Creating the components to help startups grow Examples: Co-working space 1000 m2 International accelerator Angel training Securing follow on funding to help the startups scale Examples: Seed fund Growth fund
Example of plan for Egypt What Events and eco-system building Accelerator Seed funding VCs Purpose Create startups/jobs and foster entrepreneurship Bring startups from MVP to product and first revenue Achieve seed capital and grow sales Growth capital and scaling Details Hackathons Pitch events Mini-bootcamps FoundersFair Corporate meet Startups Tech events Open Office Hours Angel roundtable 10 startups/program EUR 15K pre-seed investment per startup 3-6 months program Free office space Mentoring Access to investors Open doors to customers EUR 50-200K investments per startups 12 months postaccelerator program Focus on sales and growth 10 investments p.a. Syndicate with angels/vcs EUR 500K-2m investments per startup 5-10 investments p.a. Focus on scaling and internationalisation Partner VentureScout Startupbootcamp Arabreneur VCs Budget EUR 600K/year 20% private money EUR 750K/year 33% private money EUR 1.25m/year 80% private money EUR 10-15m p.a. 100% private money Where? 1,500 m2 shared facility with event space, accelerator and co-working space at 50% discounted rate to support startups (budget: EUR 200-250K/year)
Dubai is going to be the regional hub for later stage startups and growth funding 5,000 m2 co-working space and shared office space for startups > 10 people EUR 100m Growth Fund
The initiatives will be funded through a combination of government support and private funding and shall gradually ensure a self-sustained system Government funding Private funding 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% year 1 year 2 year 3 year 4 year 5
We will build a web-platform to consolidate and communicate all initiatives
Who is Behind?
VentureScout is a company specialized in building startup ecosystems around the world and with aggregated knowledge from our groups of activities. DI is funding pilot project in Egypt. Europe s largest Accelerator over 125 seed investments Co-Working Space in London & Berlin 24 own startups Knowledge and Best Practice consolidated in VentureScout Advice global corporates on innovation and startups
Some of the worlds biggest brands are our clients, and use us to advice on innovation, for sourcing startups and set up innovation programs and events
Next Steps We need to secure EUR 600.000 per country We need to find local start-up partners for the first phase Phase 1 Phase 2 Phase 3 Building the basics of the eco-system Creating the components to help startups grow Securing follow on funding to help the startups scale Examples: Pitch events Hackathons Mini bootcamps Term sheet battles Match making events between startups and corporates Examples: Co-working space 1000 m2 International accelerator Angel training Examples: Seed fund Growth fund
Policy Issues for 2014 39
Advocacy Strategy for 2014 Phase 1 Phase 2 Challenges Ambitions Stakeholders Objectives Activities Morocco, February Jordan, April
Policy workshop Step 1 Step 2 Step 3 Step 4 Overview of previous policy focal points Prioritization: Two key policy focal points for 2014 Prioritization: Two recommendations for each policy focal point Policy Advocacy Strategy: Phase 1: Defining challenges & ambitions
Focal points Deliverables 2011 2012 2012 + 13 2014 Border clearance (10) Harmonization of standards (10) UME/UMA Trade Policy Agri-trade (10) Rules of origin (3) Food catalogue (Egypt) Gulfood (UAE) Visa (7) Red Carpet Program (all) Anti-corruption (5) Vocational training (4) ECO (Egypt) Trade Promotion SMEs (4) SME Technical Support Unit (Jordan) SME seminar (Egypt) StartupBootCamp (Egypt + more) Export knowledge (11) Business Salon (UAE, Sharjah) Danish Industry House (Qatar)
Lunch 43
The future of the AE-network 44
16 Feb. 14 Building an Umbrella Organization for the Arab-EU Facilitation Network
Introduction Over the past four years the Arab-EU network has proven its relevance by developing common policy positions to difficult problems. A range of policy positions targeting important and often sensitive barriers to trade with the EU have been developed by members. A feat that is considered important by all stakeholders. Not least because no other organization exists covering the same geographical and topical area that potentially could meet eye-to-eye with their European counterparts. It has, however, within the same time period proved difficult to ensure that the positions and strategies are implemented. A large and unexploited gap in the potential level of trade between the MENA region and the EU does exist. A gap that only can be closed by working diligently with the EU and the MENA governments to revise existing trade policy and incentivize more companies to start-up export to the EU. A significant commitment therefore exist among members of the Arab-EU Network to formalize the network. In order to formalize the network it is suggested to transfer the activities of the network to an umbrella body - Arab-EU Trade Organization (AETO). The members of AETO will benefit by being able to lobby more effectively, gain access to the EU, access direct services for BMOs, and business promotion for their members The network will be coordinated by a small, independent secretariat 46
No other Networks targets both MENA and EU Region and represents entire MENA Region Entire Mena region Repre senta tion Part of region: Levant and/or North Africa and/or the Gulf MENA Target- MENA and EU 47
Intra-Regional Trade: Only 1 % of Gulf countries external trade is to/from Levant and North Africa Gulf countries imports Japan 6% 7% Germany India Japan 18% Gulf countries exports 13% India 12% China 12% 14% China Other 9% US 47% 1% 13% US Other 35% 1% 12% South Korea Levant and North Africa Levant and North Africa Source:International Trade Centre 48
Vision for AETO The overall vision for Arab-EU Trade Organization (AETO) will be to work towards seeing a substantial increase in the level of trade between the MENA region and the European Union. The means to achieve the vision will be to: Dismantle barriers to trade by actively engaging the EU and Governments of the MENA region to address any barrier to trade. The principal means being the formulation of trade policy initiatives, harmonization, legislative intelligence and public affairs (coordinated lobby activities) Incentivize members of the individual member organizations to engage in the various types of business promotion opportunities that the members can access through AETO, i.e. Matchmaking, best practice sharing and identification of funding opportunities The work of AETO will be coordinated by a small, independent secretariat and governed by a Steering Committee and run by an executive director appointed by the committee. The cost for the BMO s will be membership fees and cost related to project activities, such as travel expenses 49
Trade policy Business Promotion 16. Feb. 14 AETO Service lines Service lines 1 Matchmaking Business processes Identify potential partner companies in key markets (EU, MENA) Disseminate information to BMOs & create contacts through online portal Conduct annual business seminars Outputs Online portal with companies information 2 Best practices Gather best-practices from BMOs on key issues for members (SMEs, entrepreneurship, etc.) Facilitate working group to draft best-practice report on key issues Facilitate peer-to-peer training on best-practices Online portal with peer-to-peer training materials and reports Online portal with reports 3 Access to funding Identify investment and funding opportunities in key markets (EU, MENA) Disseminate investment and funding opportunities to BMOs 1 Policy harmonizatio n Identify key focus sectors (e.g. agriculture, textile) Identify trade barriers (tariff and non-tariff) in key markets Facilitate BMO working groups on key issues Develop common policy positions on how to reduce trade barriers in focus sectors in key markets Working group sessions Position papers 2 Legislative intelligence Conduct research on legislation, procedures (visa, import) and standards relevant for key sectors (e.g. agriculture, textile) in key markets Disseminate knowledge and trainings materials to BMOs Conduct annual workshop Annual workshop Legislation database 3 Public affairs Identify relevant multilateral policy forums (EU) Conduct regular meetings with key actors in relevant multilateral policy forums to influence legislation Support BMOs in meeting with national governments 50
Trade policy Business Promotion 16. Feb. 14 Work sharing between AETO and Member BMOs Service lines 1 MM 2 3 1 2 3 Best practices Access to funding Policy harmonization Legislative intelligence Public affairs AETO Develop and maintain online portal for match-making Conduct annual business seminars Gather best-practices from BMOs on key issues for members (SMEs, entrepreneurship, etc.) Facilitate working group to draft annual report on bestpractices on key issues Facilitate peer-to-peer training on best-practices Online portal with peer-to-peer training materials and reports Identify investment and funding opportunities in key markets Disseminate investment and funding opportunities to BMOs Identify key focus sectors (e.g. agriculture, textile) Identify trade barriers (tariff and non-tariff) in key markets Facilitate BMO working groups on key issues Conduct research on legislation, procedures (visa, import) and standards relevant for key sectors (e.g. agriculture, textile) in key markets Disseminate knowledge and trainings materials to BMOs (Arab-EU Help Desk) Conduct annual workshop Identify relevant multilateral policy forums (eg. EU External Action Service) Conduct regular meetings with key actors in relevant multilateral policy forums to influence legislation Support BMOs in meeting with national governments Member Business processes Identify companies looking for partners Disseminate info to business members Provide inputs on best-practices to network Participate in relevant working groups Develop training materials on bestpractices Conduct /participate in trainings Disseminate info to business members Participate in relevant working groups Draft common policy position papers on key issues Facilitate research by providing inputs and information on national standards, procedures, legislation, etc. Participate in annual workshop Conduct meetings with national governments to adopt common policy positions 51
AETO Governance Annual General Assembly Meets annually back to back with annual meeting All paying members Adopts By Laws, defines strategy and overall policy governing AETO Identify topical trade policy issues to be addressed Identify annual work plan Appoints members of the Steering Committee Steering Committee Elected for a period of two years Four regionally elected members One member from DI Elects its own Chairman Appoints the Executive Director Meets three times per year back to back with network meetings Adopts policy positions Financial Oversight \ rules and procedures Fund raising Secretariat Establish and facilitates working groups Maintains and updates website, online portals and legislation database Conduct research on legislations, standards, procedures Arranges workshops, trainings and seminars Arranges annual meeting Working groups Exchange information and expertise Draft policy and position papers 52
Organization chart Steering Committee Executive Director Management Business promotion division Match-making Access to funding Best practice Trade policy division Policy harmonization Public affairs Economic intelligence HR Executive committee Finance Fundraising Communication Working groups Working groups 53
Yearly project cycle Annual meeting 3rd working group session 3rd steering committee meeting 1st working group session 1st steering committee meeting 2nd working group session 2nd steering committee meeting 54
Increased access to the EU market Increased access to other MENA markets Costs and Benefits Investment of staff time and resources Access to information and training materials Policy coordination & Increased leverage in public affairs Membership fees Participation in network activities Access to database on funding opportunities Travel expenses Access to database on potential partners Access to research on best-practices on key issues 55
Budget 2015 EUR 2016 EUR 2017 EUR Salary Executive Director 52.000 53.560 55.167 Policy Officer 21.000 21.630 22.279 Marketing Officer 21.000 21.630 22.279 Admin. Officer 4.000 4.120 Total Salary 94.000 100.820 103.845 Travel Office staff - Fligths (Economy) 8.071 2.692 2.692 - Per Diem 19.821 7.433 7.433 Steering Committee - Fligths (Economy) 8.054 8.054 8.054 - Per Diem 6.194 6.194 6.194 Total Travel 42.139 24.372 24.372 Other cost - Publications/Database 6.800 6.800 6.800 - Website 6.800 6.800 Annual General Assembly 16.000 16.000 16.000 Total cost 165.739 147.992 157.817 Contingency (10%) 16.574 14.799 15.782 Total cost 182.313 162.791 173.599 56
Axis Title 16. Feb. 14 Membership fees 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Year 1 Year 2 Year 3 Axis Title Donor Funding Membership Fee DI
Suggested fee structure 2015 DI covers 100% = EUR 180.000 + Flights and hotel for WG 2016 DI cover 60% = EUR 108.000 Doners 10% = EUR 18.000 FEES 30% = EUR 54.000 FEES per member (15 members) in 2016 = EUR 3600 + Flights and Hotel for Working Groups and Annual meeting = 6000 EUR pp Total Fee per organisation + travel in 2016: EUR 10.000 58
Location Analysis Evaluation Criteria Criteria Accessibility Sub-criteria # airlines with flights Visa regulations Distance to EU and other MENA countries Weigth 25% HR capabilities Previously hosted AE-network initiatives Organizational structure and resources Share of well-educated citizens 25% Political stability Ranking on Failed States Index 25% Experience with interest representation Ranking on Economic Intelligence Units Democracy Index 25% 59
The Establishment and Expansion of the Network Initiation Development of organizational structure Supporting document: by-laws, business plan, budget Start-up Recruitment of staff Establishment of secretariat Online portals and working groups Consolidation Recruitment of additional MENA members Implementation and expansion of activities Expansion Recruitment of additional members Implementation and expansion of activities 2014 2015 2016 2017 60
Next steps in 2014 for AETO Network Meetings/ Working Groups Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Morocco Jordan Copenhagen Network Organizat ion Revie w Assess feasibility with members Develop MOUs, business plan, and final budget Trade Policy position Papers Outlin e topics Research and presentation Draft position papers Business Promotion Outlin e topics Research and presentation Draft position papers 61
Next steps 16. Feb. 14