Don’t miss out on innovation

Removing the obstacles in front of Syrian entrepreneurs will help Lebanon benefit from their innovative potential
Opinion12.11.2017Dirk Kunze and Sofia Koller
Entrepreneurship Lebanon and Syria
FNF Lebanon and Syria

Instead of finishing his degree in IT engineering at Damascus University, 25-year-old Ayham* fled Syria with his family to Lebanon in 2012. At first, he worked on a banana plantation, then as a graphic designer. With the help of a scholarship that covered half his tuition, he finally finished a degree in computer science at the Lebanese International University. But rather than pay for a printed diploma, Ayham is using his income as a software developer to launch an artificial-intelligence coding platform.

Examples like Ayham’s are rarely discussed in Lebanon, where Syrian refugees are often depicted as a burden on the country’s infrastructure and labor market. But the reality is more complex. High unemployment rates had been a feature of labor markets in the region even before the start of the Syrian Civil War, and recent data suggests that the resulting refugee crisis has had a positive impact on job creation. An IRC report laid out the complexity of the economic situation: While data shows that the influx of refugees has increased competition for jobs and lowered wages, Syrian refugees have also stimulated host economies by providing new sources of labor and buying power. The potential upsides could outweigh the drawbacks in the long term, especially in some key sectors.

 

An opportunity for Lebanon

Some studies suggest that with the right support, refugees can become successful entrepreneurs, earning a sustainable income rather than relying on humanitarian assistance and social services. Refugees also attract investment: In Turkey, companies established by Syrians in the past few years saw an investment of $220 million in 2015 alone. Since more than half of Syrian refugees are younger than 24, making use of the next generation’s innovative potential would be an investment in Lebanon’s future, especially if focused on microenterprises and the ICT sector, which the UN Development Programme described in a 2016 report as a “promising industry.” Lebanon is already positioning itself as an innovation hub: In 2013, Banque du Liban, Lebanon’s central bank, launched a nearly $650 million package to encourage investments in startups to boost the entrepreneurial ecosystem. Yet high-quality startups and tech companies worth investing in are still lacking. People like Ayham show the entrepreneurial potential of Syrian refugees—but they face many obstacles in Lebanon.

Challenges for Syrian entrepreneurs

Syrian refugees’ access to the Lebanese labor market is limited. Those registered with UNHCR are not allowed to work, and those not registered can only work in the agricultural, construction, and environmental sectors—if sponsored by a Lebanese kafeel. As a result, most Syrians work in the informal sector. In 2015, only 1,045 new work permits were issued, and 801 permits renewed for the over 1 million Syrian refugees registered at UNHCR Lebanon, according to the country’s Central Administration of Statistics. A report from the International Labor Organization says that “there is a great deal of confusion surrounding the implementation of the laws and regulations … in relation to their entry, stay, employment, [and] property ownership.” Other difficulties include a lack of access to funding, information, and banking.

In addition, traumatic memories of the Syrian presence in Lebanon are still fresh. Samer, another Syrian who fled to Lebanon, is working as a software developer in Beirut and developing a smart-device startup. Samer says that when he tells Lebanese that he is from Syria, their attitude toward him cools. Ayham feels comfortable working in Lebanon, but he has also experienced harassment. “Lebanese have suffered, and I can understand their pain, but I wish we could put behind the past and look forward together,” he says. Samer also says he finds it difficult to integrate in the startup scene. Syrians often have limited English skills, while in Lebanon many of the the meet-ups are in English, he says.

 

Supporting entrepreneurship

Few organizations are supporting promising Syrian startups with training and funding. One of them is Jusoor, which was founded by Syrian expats. According to Ahmad Sufian Bayram, Jusoor’s entrepreneurship program advisor, “Lebanon is losing a lot of opportunities” because it lacks qualified software developers, while many qualified Syrians cannot work legally. Another example is the Friedrich Naumann Foundation, which organizes hackathons on social entrepreneurship and game jams­—where the games produced promote social causes—among other projects, to bring together Lebanese and Syrians interested in entrepreneurship and technology while connecting them with the startup ecosystem in the region and internationally.

Several steps could be taken to support Syrian refugee entrepreneurs in Lebanon, such as issuing special work permits for well-educated Syrians with sought-after skills like expertise in technology. More research on entrepreneurship could help policymakers identify parts of the Lebanese economy that would benefit from admitting Syrian refugees in the long term. Since 2013, the ILO has recommended that Lebanon develop a wage policy, formalizing the informal economy and providing more statistical information. In addition, microenterprises could be promoted through small loans and grants, accessible to anyone living in Lebanon.

If Lebanon wants to become a hub for innovation and technology, it cannot afford to miss out on the potential and motivation among Syrian refugee entrepreneurs. Investing in them is investing in the future of both Lebanon and Syria.

*The Syrian refugees in this piece preferred to be identified by first name only.

This article was published in Executive Magazine on November 10, 2017.

Dirk Kunze

Dirk Kunze

Head of Office, FNF Lebanon and Syria

Twitter: @DirKunze

Sofia Koller

Sofia Koller

Project Coordinator, FNF Lebanon and Syria

Twitter: @sofia_koller