How women are transforming the Arab world's start-up scene

It may surprise some to learn that one in three start-ups in the Arab World is founded or led by women. That’s a higher percentage than in Silicon Valley. Women are becoming a force to be reckoned with on the start-up scene across the Middle East. Because the tech industry is still relatively new in the Arab world, there is no legacy of it being a male-dominated field. Many entrepreneurs from the region believe that technology is one of the few spaces where everything is viewed as possible, including breaking gender norms, making it a very attractive industry for women.

Despite many challenges, including societal pressure on women to stay at home, a digital gender gap, and structural disadvantages in fund-raising and investments, female entrepreneurs are finding new and creative ways to overcome barriers to entering the workforce and starting their own business.

Key to these efforts has been their ability to leverage the internet and engage through online platforms to reach new markets. They are able to work from home if they wish. As Saadia Zahidi argues in her book Fifty Million Rising, these digital platforms allow women to be unimpeded by cultural constraints or safety issues, and they lower the implicit and explicit transaction costs of transport, childcare, discrimination and social censure.

Finding how to tap into this valuable resource of highly educated women could be a game changer for the region. Given the market power of women’s increasing participation in the workforce, which by 2025 could add an estimated $2.7 trillion to the region’s economy, the growing trend of women in start-ups could be transformative for the Middle East.

The rise of women in the Arab world starts early, with girls outperforming their male peers in school. In Jordan, girls do better than boys in school in nearly all subjects and at every age level, from grade school to university. When it comes to STEM subjects (which include skills critical to launching and running a start-up in the Fourth Industrial Revolution) several Arab countries are among the global leaders in terms of the proportion of female STEM graduates. According to UNESCO, 34-57% of STEM grads in Arab countries are women, which is much higher than in universities in the US or Europe.

Despite the fact that many Arab women are thriving in school and graduating with advanced degrees, this success has not necessarily translated to the job market or the start-up world. Many women are instead staying at home, whether from choice or because of cultural, social or familial pressures. In fact, 13 of the 15 countries with the lowest rate of female participation in the workforce are in the Arab world, according to the World Bank.

Restrictive laws in many countries across the region put women who wish to join or start their own businesses at a disadvantage. These include prohibitions against women opening up a bank account or owning property, limited freedom of movement without a male guardian and constraints on interactions with men who are not in their family, as well as further cultural and attitudinal stigmas.

In fact, even women who do start a company face structural disadvantages. On average, female-led start-ups receive 23% less money than male-run firms, and are 30% less likely to have a positive exit, according to the OECD.