In the Fall of 2015, it was not the best time for businesses in Iraq. There were significant geopolitical pressures facing the Iraqi government, oil prices were in the mid $40’s (and dropping), and ISIS had taken over large parts of northern and western Iraq. At this time, I just completed an executive education program at Singularity University focused on the future of technology. When I thought about Iraq’s technological future, I felt a mix of hope and fear. I was (and still am) hopeful that technology can make Iraq into a more modern, stable country that is less dependent on oil. However, it was daunting to think about Iraq’s ability to transition to a more tech-focused economy, as a country whose crude oil sales account for 90% of its revenue. Until recently, I was very uncertain about how I could pursue my passion for technology in my home country of Iraq, whilst also still achieving my family firm’s overarching mandate to help rebuild Iraq in a meaningful way.
Through many visits to Iraq and exciting conversations with visionaries like Hal Miran, I began to learn about Iraq’s budding world of startups, incubators and entrepreneurs. Communities and organizations such as FikraSpace in Baghdad, along with Re:Coded and 51Labs based at TechHub in Erbil, have all developed in recent years and are growing at an astonishing pace. In my quest to figure out how I could best contribute to this ecosystem, I learned that we don't have to wait for more “traditional” investment conditions to get involved.
In many ways, Iraq has been closed off from the rest of the world for many decades due to war and sanctions and now the people of Iraq are hungry for innovation and development. Iraq’s young, growing population of 37 million people, an increasing percentage of the population on the internet (17.2% in 2015), and mobile subscriptions on the rise (93.8 per 100 people had mobile subscriptions in 2015), make it a promising environment for tech. Source: World Bank.
Iraq still faces many issues including security, political and financial challenges, but the beauty of technology is that it can potentially allow developing nations like Iraq to “leapfrog” in the evolution of certain consumer processes, e-commerce, on-demand services, fintech and many more. For those interested in diversifying their investments outside the more established tech communities and in gaining access to new (and potentially undervalued) opportunities, Iraq is fertile ground. While investors can't turn a blind eye to the legal, financial, and operational challenges that exist, we all know that where there's risk, there's reward.
The Road Ahead
Good tech ecosystems require skilled human capital. The Iraqi government can support universities and other institutions by investing in science and technology programs and emphasizing these fields’ importance to Iraq’s future economy. Additionally, the government can work to improve the conditions for foreign direct investment (FDI) into Iraq by strengthening the legal frameworks and recourse surrounding FDI. This is what is currently veering foreign investors away from Iraq and into other MENA countries who have established a more secure legal framework for FDI.
While there's a number of measures the government can implement to make it easier on new businesses and FDI, it may take some time for the government to establish these reforms. Rather than waiting on the government, I encourage those interested in making Iraq a better place to take action now and provide support to this ecosystem where possible. Aside from financial investment, many of the Iraqi diaspora have access to resources, institutions or technology that could be very useful to entrepreneurs and tech communities in Iraq. Those interested should follow Bite.Tech and other online sources to learn more about the tech ecosystem in Iraq and contact organizations directly. Any support will go a long way to these individuals who are dealing with regular power outages, security challenges and limited local institutional resources. These brave men and women will be the entrepreneurs who forge a new economy and transform Iraq into a modern, inclusive and innovative society it can be.
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