BEIRUT: Despite political and economic turmoil, Internet users in Lebanon and throughout the Levant remain active and engaged in the digital world, particularly on mobile devices, said Hussein Freijeh, Yahoo’s managing director for Middle East and Africa operations.
“It’s a market that is engaged. It’s going to continue to do that,” Freijeh said of Lebanon’s digital consumers.
Still, Lebanon is lagging behind regional markets in investments.
“It’s a challenge for major players to be able to set up here,” Freijeh said, citing political uncertainty and lack of infrastructure as the main deterrents. “We need more investors and willingness to invest in Internet ideas in Lebanon.”
In a bid to encourage investments in the digital sector, Lebanon’s Central Bank last August introduced Circular 331 to encourage commercial banks to make equity investments in Lebanese startups.
If a local bank agrees to invest, it receives a seven-year, interest-free credit from the Central Bank which can be invested in treasury bonds. The Central Bank will also guarantee up to 75 percent of the value of the investment.
As Lebanon seeks to lure investments in the IT sector, other markets in the MENA region have become veritable hubs of digital growth. In Dubai, for example, where a rash of business incubators and venture capital companies have appeared over the past two years, investment in digital projects is growing rapidly.
“Capital and investment are necessary to ensure those innovative ideas are able to come to life and for that innovation to grow and scale,” Freijeh told The Daily Star.
Dubai-based digital startups are surrounded by a wellspring of capital with good banking, business and digital infrastructures, making the Gulf city an increasingly desirable investment landscape, according to Freijeh.
Besides failing in the challenge of attracting big investors, Lebanese developers tend to focus exclusively on the national market.
“There are really a lot of cool ideas in Lebanon, and these ideas could benefit more from a bigger focus on a regional versus local market,” he said.
But markets throughout the Middle East and North Africa are fertile grounds for digital innovation, he said, adding that regional investment in digital media is increasing by 30 to 40 percent each year.
Following global trends, much of the investment regionally is directed toward increasingly popular mobile platforms.
“Mobile [use] is going to become more than PC in 2014,” Freijeh predicted. “Mobile is by far the biggest opportunity.”
Yahoo, he said, is already capitalizing on the trend.
“If you look at Yahoo today, we are very focused on mobile and being a mobile first company. Here [in the Middle East] where Internet penetration is the fastest growing globally, it just fits perfectly,” Freijeh said.
Freijeh cited Yahoo Maktoob’s football app targeting Arabic-speaking football fans as an example of an innovative digital product tailored toward the region’s legions of mobile phone users.
“It’s a fully Arabic app tailored for the region, a handy app to have this year with the World Cup,” he said excitedly.
Like others in the industry, however, Freijeh is concerned that the best and brightest young minds in the MENA region tend to emigrate.
“There’s definitely a [regional] challenge for creating opportunities and creating new ideas,” he said.
Still, Freijeh anticipates that the clear potential of the youthful market will make MENA countries increasingly attractive to young professionals in digital industries.
“Thirty to 40 percent of the online population in MENA is less than 24 years old, so this is a digitally native generation that can unlock the full potential of the Internet,” he marveled.