Science, Innovation, and the Start-Up Ecosytem in Tunisia

One of the most famous real estate for high-tech innovation and entrepreneurial activity has been Silicon Valley. The notoriety of this relatively small area began when two Stanford University graduates, William Hewlett and David Packard, started a company together from a garage in Palo Alto with $500 in cash. They named it Hewlett-Packard, and launched it on Jan 1^st 1939.

A coin toss determined the order of HP company name, and the rest is well documented history that is still in the making!

Creating a Viable, Sustainable Ecosystem

So what was the secret behind the Valley that inspired entrepreneurs’ desire to innovate, openness to risk, and the capacity to compete? Could the Tunisian entrepreneurial and startup ecosystem, and Tunisian entrepreneurs in particular, create their own version of Silicon Valley?

From a brief review of the Silicon Valley history, one would readily understand the primary forces behind its growth. Right after World War II, Stanford University researchers and professors led the effort to attract federal funding for advanced electronic research. A new Stanford Industrial Park was built and companies such as Varian Associates and Lockheed were among its first tenants. From electronic components research and semiconductor work, the park gained enough momentum to be fueled by the free market, innovation, engineers, physicist, federal funding and investment banking.

The secret is simple and yet elegantly complicated. It is mostly about the maturity level as well as the interconnectivity of the basic components of the startup ecosystem – the people, resources, knowledge, finance, commerce, legal, policy, and government. It is the time-enhanced fusion of such components that would most certainly lead to a highly performing ecosystem.

How could Tunisia build an innovation ecosystem through science and technology? What kind of policies should the government put in place to encourage and protect innovation?

The Making of a Uniquely Tunisian Silicon Valley

The role of science and technology in society and the economy has never been more important. It is safe to say that every aspect of modern life has become increasingly dependent on technology and the science behind that technology. Modern technological advances support manufacturing and agriculture, empower commerce and education, and facilitate solutions to resolve our current challenges with climate change, energy, and healthcare. Thus, it is critical for Tunisia to put in place a concrete set of progressive policies that elevate the role of science and technology in the daily affairs of the Tunisian society.

First, the government needs to review education policies. It is only through an effective and practical education system that talented youth throughout the country will be able to have a positive impact on society at large. The Tunisian Government and Parliament should review and update curriculum of each level of education to prepare students to engage and compete in the modern global economy. It should also be a priority to engage students at an early age in science, technology, and creative problem solving. Universities, professors and researchers should work closely with policy makers and with the business community to design a curriculum and a research program that is geared to fulfill the needs of society as well as the individual student.

Second, there should be renewed focus on scientific research: The Tunisian government, Parliament and society in general should support and adequately fund a National Science and Technology Foundation. This independent research body would in-turn become the main funding source of all national scientific research in Tunisia – private or public. The foundation should also promote and integrate science in all aspects of Tunisia society with the objectives of enhancing the prosperity of every citizen. This foundation should also work very closely with the business community to develop partnerships with the sole goal of helping scientists and researchers connect with business leaders and other entrepreneurs so they could transform their innovations and research into sustainable and profitable products and companies.

Third, leaders and citizens should reinforce substantive public policy discussions: Government affects our daily life through a broad area of laws and regulations, while citizens impact policy through engaging with elected officials, the media, and non-governmental organizations. Sensitive and realistic policies help form the trust infrastructure of a startup ecosystem. At present, there are two sectors in dire need of reform and have a direct impact on the success or failure of the Tunisian company:

(1) Finance: The Tunisian Government and Parliament should focus its efforts on reforming the antiquated and fragmented financial system, as it is one of the major impediments facing the startup and innovation ecosystem in Tunisia. Liquidity is scarce and very restrictive for any SME and raising much needed capital to launch or scale any business is lengthy and arduous process. Most private equity and investment firms are subjected to unnecessary and strict legal and fiscal constraint, which is hurting the overall deal flow and investment efficacy of the private sector.

(2) Legal: Legal environment and laws need to be generous and designed to help business creation and protection. For all practical reasons, it is completely the opposite in Tunisia. For example, Company formation is complicated, expensive and is a nasty web of paperwork and signatures. Bankruptcy laws are very unfriendly and create a lengthy legal and financial battle for the startups. Laws governing the currency exchange and the flow of capital pretty much hinder startups from accessing global markets.

With these recommendations in mind, the opportunity for Tunisia to maximize its scientific and technological potential is now. This will only empower the curious and innovative entrepreneurs to unlock the next big idea that has the power to change the world and Tunisia for the better. As discussions continue on ways to facilitate a stronger startup ecosystem, it is key that policymakers, civil society, and citizens alike realize and understand the potential so they could demand greater investment into science and technology, the backbone of a strong, modern economy.

The time is now for Tunisia to commit to innovation.