7 Reasons for Massive Iraq Startup Growth in 2017
The Iraq and Kurdistan startup scene is still at an early stage however we expect significant growth in 2017. Here are the 7 key reasons why the country will see massive startup growth in coming years.
- Widespread internet penetration will boost the Iraq startup scene
13% of Iraqis – around 5 million people – are connected to the internet, which is free of government censorship. This percentage has risen from just over 1% in 2010 and it is set to continue climbing.
Internet access is obviously key to startup development. A lack of web access is a red flag for entrepreneurs and startup founders. Iraq’s impressive internet penetration growth is excellent news for the country and will contribute greatly to the founding of new startups.
- Recovery from the ISIS conflict and the oil shock
Since 2014, Iraq including Kurdistan have fought the twin crises of the conflict with ISIS and the global oil shock, which saw oil prices fall drastically. Both crises hit the country hard. But with the Iraqi and Kurdistan regional governments making significant progress against ISIS and the global oil market rebalancing, the outlook is much better.
The Iraqi economy is expected to grow right through to 2020 and unemployment is predicted to reduce too.
- Iraq is an underdeveloped, untapped and potentially lucrative market
As Iraq comes out of recession, returns to growth and creates jobs, more people will have disposable income. There is a demand for services and products that is simply not met, and which will grow further with job creation in coming months and years.
This opens the door to new companies willing to meet this demand across multiple sectors by setting up in Iraq.
- Iraqi millennials are informed and tech-savvy
Many millennials in Iraq are keen on entrepreneurship. They are also aware of how other countries in the Middle East such as Iran and Jordan have grown their own tech sectors in recent years from scratch and are cultivating an entrepreneurial spirit. There is clearly a widespread interest in technology and tech startups.
Many Iraqis have emigrated in order to work abroad and improve their work experience. As Iraq improves economically and politically, the prospect of people returning in order to found a startup company will grow, as well as from young Iraqis in the country.
- Diversification and promotion of Iraqi entrepreneurship is key to survive
Iraq is heavily dependent on the oil sector. In fact, 99% of government revenue comes from this sector. The recent global oil shock proved that in order to take control of its future, Iraq must diversify into other industries.
With less than 1% of the population employed by the oil sector and a youthful population that is increasingly tech-savvy, there is a clear opportunity to grow a tech startup sector and create numerous services that people are crying out for.
The Kurdistan Regional Government has recently said that it will be the private sector and entrepreneurs that will drive job creation and economic growth.
- Foreign investors are looking to Iraq for opportunities
Here at Bite.tech we have been in contact with many foreign investors, tech newsletters and regional ecommerce companies with requests for information and more on budding startups in the country.
The prospects for growth are becoming clear to investors abroad. We are confident that Iraqi startups will see foreign investment deals with increasing frequency soon. In addition, larger regional tech companies are considering entering the Iraqi market as part of their expansion strategy.
- Improving education and English
Education standards have improved across the country, particularly in the Kurdistan region. Proficient English – in demand for cross-border communication – is increasingly spoken by new young professionals entering the workplace, powered by educational institutions such as the American University of Iraq - Sulaimani.
The talent that the Iraqi tech startup ecosystem needs will be increasingly met from within the country. The country is establishing a stage of nascent tech startup growth and these 7 factors will help it to realize its ambitions to become a Middle Eastern tech ecosystem hub.