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Commercial and residential buildings are seen on the Sheikh Zayed highway in Dubai, Oct. 18, 2011. (© Jumana El-Heloueh / Reuters/Jumana El-Heloueh / Reuters)
Commercial and residential buildings are seen on the Sheikh Zayed highway in Dubai, Oct. 18, 2011. (© Jumana El-Heloueh / Reuters/Jumana El-Heloueh / Reuters)

Small Business Briefing

Middle East: the next Silicon Valley? Add to ...

The latest news and information for entrepreneurs from across the web universe, brought to you by the Report on Small Business team. Follow us on Twitter @GlobeSmallBiz

Are Middle East and North Africa 'on the cusp' of their own Silicon Valley experience?

It could take five to 10 years, but the region encompassing the Middle East and North Africa is "on the cusp of creating its own Silicon Valley experience," suggests this piece in The New York Times.

It will take some cultural changes and help from governments and big companies to foster the entrepreneurial spirit, the piece suggests.

And the region is not without hurdles to overcome: limits on foreign ownership, the need to have a local sponsor in the Gulf region, bankruptcy laws, investor rights, and censorship are among them, the piece says.

Still, the piece says that governments in the region are pouring billions into regional projects and detailing plans to create jobs.

And international investor interest in startups in the region has risen since Yahoo spent millions to buy Maktoob.com, an Arabic content portal based in Jordan, in 2009. Arab startups could attract further interest from international investors in a range of businesses, from social media to e-commerce, the piece says.

BMO aims to boost small and medium business borrowing

Bank of Montreal announced today that it is putting up $10-billion over the next three years for businesses to borrow. And small and medium-sized businesses are among its key targets.

“This new money will provide small and medium-sized businesses with more certainty of available credit and represents BMO’s ongoing confidence in them and in the Canadian economy," said Frank Techar, president and CEO of personal and commercial banking for BMO, in a release.

“We are seeking to boost lending in every region of the country by actively reaching out to entrepreneurs, including women, and aboriginal entrepreneurs. We are also connecting with younger entrepreneurs..." he added.

But the move, says Globe banking reporter Grant Robertson in a story, is "more of a marketing ploy than a strategy to capture pent-up demand for business borrowing." He notes that, even amid historically low interest rates, businesses have not been borrowing out of the recession, and many small- and medium-sized companies with good credit ratings, he says, have been keeping to the sidelines.

Growing role for angel investors

Angel investors are playing a growing role in providing capital to startups around the world, even outdoing venture capital in Europe, according to a report by the Organization of Economic Cooperation and Development, as reported by The Wall Street Journal.

The Paris-based think tank's report, among the first to look at angel investing around the world, found that angel investing hit $5.5-billion in Europe in 2009, beating venture capital funding by about $250-million, according to the Journal report.

In the United States, angel investors doled out $17.7-billion in 2009, not far behind the $18.7-billion in venture capital, according to the report, which was based on interviews with about 100 investors, entrepreneurs and business leaders in 32 countries.

The Journal reports that while banks are reining in loans and venture capitalists are focusing on less-risky, later-stage companies, angel investors are "nearly alone" in providing backing to early startups.

And angels "are more prone to support entrepreneurs in their own backyards," said the Journal, with typical funding ranging from $25,000 to $500,000.

The report also notes that beyond cash, angel investors play a crucial mentoring role.

More reaction to Obama address

More reaction from and about small businesses to U.S. president Barack Obama's state of the union address include this piece in The Wall Street Journal, this piece on The Huffington Post, this story by Reuters and this one in The Washington Post.


Book club for startups

Aiming to build skills and inspiration for startups, MaRS is running a book club covering books that highlight the fundamentals and ltest trends for startups. The event will also give participants a chance to rub elbows with other members of the startup community. The book for this event: Running Lean by Ash Maurya. The event is being held Jan. 30 at the MaRS Discovery District in Toronto. For more information, click here.

Immigrant hiring

Hireimmigrants.ca, a project of Assisting Local Leaders with Immigrant Employment Strategies (ALLIES), set up by the Maytree Foundation, will host a webinar to take a look at professional immigrant networks as a source of talent for businesses. The webinar, being held on Feb. 22, will include several speakers to help participants learn about immigrant networks, where and how to find them and how to work with them in a mutually beneficial way. For more information, including signing up, click here.


Beware the pitfalls of social media contests

Contests and giveaways are everywhere in social media these days. They can help increase traffic or reward communities -- but they also have pitfalls that you must beware of, warns columnist Mia Pearson.


West Bank draws Canadian entrepreneurs

An entrepreneur who launched the first geothermal energy company in the Middle East was among the Canadians in a story last September who have decided to try their hand at setting up business in the West Bank and Gaza, believing in the need to strengthen the Palestinian private sector. They were also savvy enough to know a good market opportunity when they see it.

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