Beset on all sides by enemies, adversaries and strife, overwhelmed by refugees and historically fragmented by politics and religion, Lebanon would not appear to be the most attractive country for investors and tech entrepreneurs.
Somewhat extraordinarily, the opposite is reality and the city of Beirut, known in the 1970s as the party town of the region, is undergoing a renaissance that is bringing back the good times and an influx of investment into local emerging and maturing tech companies.
Much like any tech hub, albeit with noisy neighbors, Beirut has all the elements that define such clusters. These include an international airport with increasing direct links to the world's most important cities, an educational system that encourages entrepreneurship, and a nightlife that attracts people (and talent) from all around the MENA (Middle East North African) and Gulf region.
Moreover, investment is flooding in from Gulf countries that need to move away from oil as their major income as the world's reliance on the mineral recedes. The future is so bright the city may need to wear shades, but it also needs the other major component in its tech ecosystem and that is a conference that defines its importance.
Beirut is the center of Lebanon's tech revolution. Credit; Ahmad Moussaoui via Flickr creative... [+]
The BDL (Banque Du Liban) Accelerate conference takes place over three days next week and its organizers claim it is the only innovation and startup conference in the world that is inclusive, because it's free and nobody pays. They also say that it's the biggest conference in the Mediterranean, an interesting assertion bearing in mind the number of conferences held next door in Israel.
Last year, more than 100 'top-tier' speakers from 53 countries flew to the city in front of an audience of 6,623 attendees from around the world. This year, the organisers expect 20,000 attendees, with 2,000 registrations recorded in the first week alone. At time of writing, more than 18,000 attendees had registered.
One noted speaker is certainly familiar; Steve 'The Woz' Wozniak is the keynote, Co-Founder of Apple and the man who many believe still wields huge influence over the company he started. Wozniak will be the figurehead of this year's theme - 'Innovation: Intrapreneurship v. Entrepreneurship'.
This dichotomy showcasing innovations by enterprises (intrapreneurship) and startups (entrepreneurship) will attempt to celebrate the difference in their processes and methodologies, a diversity of means to the same end; innovation.
By bringing enterprises into a so-called startup conference, this will bring in everybody from the ecosystem, be that entrepreneurs, students, executives and professionals; the so-called knowledge workers.
One of the major reasons for the emergence of Beirut as a tech cluster and strengthening ecosystem was the announcement in 2014 by Banque Du Liban of Circular 331, an objective to pump up to $400 million into the Lebanese enterprise market. Circular 331 promised to guarantee 75% of local banks' investments in the knowledge economy through startup investment or indirect startup support entities.
Much of this reasoning was to prevent 'nation-churn' where Lebanon's talent looked overseas to develop their skills and experience. Not only was money available, but so were accelerators and training programs that supported and helped entrepreneurs... and kept them in Lebanon.
Under Circular 331, local banks receive a seven-year interest-free credit from BDL, which can be invested in treasury bonds with an interest rate of 7%. In return, the bank commits to investing in the knowledge economy. Local banks can invest up to 3% of their capital in startup support entities, funds or directly into startups.
BDL guarantees 75% of the investment, de-risking it by mitigating the potential losses and reducing them to a mere 25%. The Circular is designed to diminish risk for the conservative local banks and does so by dictating the banks’ portfolio diversification.
A bank can invest up to 10 % (of its 3%) in any one startup, thus spreading the risk. To qualify, any company must be a Lebanese joint-stock company with nominal shares; its work should rely on knowledge economy and have lasting impact on national economic and social growth.
Two years on, such innovation appears to be bearing fruit, with not only MENA and Gulf investors putting money into Beirut, but also from the US and Europe. After next week's conference and the knowledge of 20,000 people networking and exchanging ideas, Lebanon has the launching pad to lift off.
All of this, however, remains fragile. Rockets from other very different launching pads in the region may change things overnight, but like its 1970s iteration, Beirut has always remained an optimistic and resilient city. If the ecosystem keeps its nerve, Beirut may revert to its former glory, and in all likelihood, exceed it.
