Qatar’s startup ecosystem offers a promising home to many entrepreneurs. The FIFA World Cup 2022 host is undergoing rapid development, currently ranking 4th globally in SME financing – an indicator of its commitment to startups.
Startup ecosystem attracts foreign investment as ecosystems facilitate the development of modern technologies and create synergies according to a report released recently by the Investment Promotion Agency Qatar (IPA Qatar). Qatar’s startup ecosystem is an integral part of the economic development agenda as it lays the foundation for a knowledge-based economy. “Over the years, the startup environment of Qatar has grown and transformed into a full-fledged ecosystem. Small and Medium Enterprises (SMEs) account for approximately 97 percent of total companies in Qatar, and 31-34 percent of total employment,” the report said.
“Startup ecosystems hold huge potential for Qatar’s economy as they are proven to be engines of economic growth and job creation. It can boost GDP, bring large job multipliers, and boost innovation. They also attract investments to the country when successful startups are being established within the ecosystem,” it added.
Qatar has already realised the benefits associated with startups and a successful ecosystem. Qatar’s National Vision (QNV) 2030 was launched in 2008 and aims to transform Qatar into an advanced country, capable of sustaining its development and providing a high standard of living for its population and future generations. It aims to achieve this through four pillars, including economic and human development. As a prerequisite for this development, the Vision emphasises the importance of establishing a strong entrepreneurial environment.
IPA Qatar's report noted that the startup ecosystem is fueling Qatar’s economic diversification ambitions by setting the foundations for a knowledge economy.
The global startup economy accumulated a value of almost $3 trillion between 2017 and 2019 and is on a consistent rise. Therefore, a fully-fledged startup ecosystem can bring Qatar several economic benefits, including a 2-4 percent GDP boost by 2033, nearly 40,000 new jobs, a diversified economy, and increased FDI attraction through global venture investments.
Citing the benefits of startup ecosystem the report said that startup ecosystems enable exponential growth, and the value created in the ecosystem has a spillover effect on the rest of the economy. Startups also bring additional economic advantages as they are disproportionately responsible for high growth output and productivity growth.
Secondly, it has been proven that the number of startups in the economy is positively correlated with GDP growth. Thus, Qatar can boost its economy by developing startup ecosystems. Thirdly, the expansion of the ICT sector is particularly beneficial since it contributes to the digital economy—a market that is responsible for 15.5 percent of global GDP and has grown 2.5 times faster than the global GDP in the last decade. ICT investments are also proven to boost economic growth and global competitiveness.
Attracting a startup in its early stages can have a substantial, positive effect on the economy. Thus, Qatar has been accelerating the development of its multifaceted startup ecosystem with a focus on science and innovation technology and sports, tourism, fashion, design, and related fields.
