Technology is one of the main drivers of productivity and economic growth (Anders, Ng, and Robyn 2005). Developing countries have traditionally had difficulties in both developing technology and absorbing foreign technology. Seventy to eighty percent of the productivity gap between developed and developing countries is estimated to result from the lag in the adoption technologies by these countries (Comin and Mestieri 2014; Comin and Hobijn 2010).
Tech startups are an effective mechanism to both create local technology and absorb foreign technology. In recent years, there has been a surge of tech startups across the world. Fueled by global technology-led cost reductions and increased access to resources, tech entrepreneurs are increasingly emerging in both developed and developing countries. These tech enabled startups represent an attractive investment for early stage investors, as they can be used to test, launch, and validate a business much faster and cheaper than in traditional ventures. However, to attract financing to ensure the growth of these businesses, there needs to be a better understanding of how these tech entrepreneurs form ecosystems, what are the internal dynamics of these ecosystems, how they work, what makes them grow and achieve sustainability, how they connect with the local economy to result in productivity and employment, and why some ecosystems are more effective than others at this.
This report is part of a broader research initiative that aims to provide answers to these questions. It provides new data and analysis of the tech startup ecosystem in the West Bank and Gaza. The analysis comprises: (i) an attempt to provide an accurate description and measurement of the economy’s tech startup ecosystem; and (ii) a comparison and gap analysis of four key components of the tech startup ecosystem (skills, finance, entrepreneurial supporting infrastructure, and community).
The objective of this report is to provide a better understanding of the status of the West Bank and Gaza startup ecosystem and provide policy recommendations for policy makers and other stakeholders who are interested in supporting the growth and sustainability of the ecosystem.