Introduction
Bahrain, a jewel in the Gulf, has rapidly emerged as a beacon for startups and a global employment hub. The kingdom's strategic location, progressive policies, and commitment to fostering innovation have propelled it into the limelight. This article explores the rise of startups in Bahrain and how the kingdom is positioning itself as a global employment hub, attracting talent and investment from around the world.
Infographics by GO-Globe Bahrain
Bahrain Economic Vision 2030
At the heart of Bahrain's thriving startup ecosystem lies the Bahrain Economic Vision 2030. This comprehensive vision focuses on diversifying the kingdom's economy, with entrepreneurship and innovation playing a central role. The vision outlines strategic initiatives to propel Bahrain into a knowledge-based, high-income economy.
Objectives for Vision 2030
Diversification of the Economy
At the core of Bahrain Economic Vision 2030 is the imperative to diversify the economy. The vision acknowledges the volatility of oil prices and aims to reduce reliance on the oil sector, ensuring the kingdom's economic resilience in the face of global economic fluctuations.
Sustainable Economic Growth
Sustainability is a key theme woven into the fabric of the vision. Bahrain aspires not only to achieve economic growth but also to ensure that growth is sustainable, inclusive, and aligned with environmental and social considerations. The vision emphasizes the importance of balancing economic prosperity with the well-being of society and the preservation of the environment.
Key Pillars of Bahrain Economic Vision 2030
Strengthening Government and Enhancing the Private Sector
The vision recognizes the pivotal role of both the public and private sectors in driving economic development. Initiatives are in place to enhance the efficiency and transparency of government institutions while actively encouraging private sector growth. This collaborative approach seeks to create a conducive environment for businesses to thrive and contribute to the nation's economic prosperity.
Investing in Human Capital
Bahrain Economic Vision 2030 places significant emphasis on developing human capital. Initiatives focus on enhancing education and training systems, aligning them with the needs of a knowledge-based economy. The goal is to equip Bahrainis with the skills and knowledge required to excel in diverse sectors, fostering a highly skilled and adaptable workforce.
Fostering Innovation and Entrepreneurship
Innovation lies at the heart of Bahrain Economic Vision 2030. The vision recognises that a dynamic and innovative economy is essential for long-term success. Initiatives to foster innovation include creating a supportive ecosystem for startups, implementing regulatory reforms to facilitate entrepreneurship, and investing in research and development.
Infrastructure Development
A robust and modern infrastructure is considered a cornerstone for economic growth. Bahrain Economic Vision 2030 outlines plans for significant infrastructure development, including transportation, telecommunications, and utilities. These developments aim to enhance connectivity, attract investment, and create an environment conducive to business operations.
Initiatives and Achievements
Regulatory Reforms
Bahrain has undertaken substantial regulatory reforms to enhance the ease of doing business. The establishment of the Bahrain Economic Development Board (EDB) is a testament to the commitment to streamlining processes, reducing bureaucratic hurdles, and creating a business-friendly environment.
Financial Sector Development
The vision places a strong emphasis on developing the financial sector, particularly Islamic finance and banking. Bahrain has made strides in becoming a regional financial hub, attracting institutions and fostering an environment conducive to financial innovation and growth.
Bahrain International Investment Park (BIIP)
As part of the vision's focus on diversification, the Bahrain International Investment Park (BIIP) was launched. BIIP serves as a dedicated zone to attract local and international investments in manufacturing and logistics, contributing to the expansion of non-oil sectors.
Tamkeen's Support Programs
Tamkeen, Bahrain's labor fund, plays a pivotal role in supporting startups. It offers a range of programs designed to enhance the capabilities of Bahraini entrepreneurs. These programs encompass funding support, mentorship, and training, creating a nurturing environment for startups to grow and prosper.
Tamkeen's Mission and Vision
Empowering Bahrain's Workforce
At the heart of Tamkeen's mission is the empowerment of Bahrain's workforce. The fund envisions a future where Bahrainis have the skills and opportunities needed to excel in a dynamic and competitive global market. Tamkeen's initiatives align with the broader economic goals of Bahrain, fostering a skilled and adaptable workforce.
Support Programs for Entrepreneurs
Tamweel
Tamweel is a flagship program that provides financial support to Bahraini entrepreneurs. Through Tamweel, Tamkeen offers low-interest loans to startups and businesses, enabling them to secure the necessary capital for growth. This program has been instrumental in fueling the ambitions of emerging entrepreneurs, contributing to the vibrancy of Bahrain's business landscape.
Mashroo3i
Mashroo3i, meaning "My Project" in Arabic, is an initiative that offers comprehensive support for Bahraini startups and small businesses. This program provides mentorship, training, and financial assistance to help entrepreneurs turn their business ideas into reality. Mashroo3i reflects Tamkeen's commitment to nurturing a culture of entrepreneurship in the kingdom.
Workforce Development Programs
Training and Development Support
Tamkeen places a strong emphasis on enhancing the skills and capabilities of Bahrain's workforce. The fund offers support for training and development programs, enabling individuals to acquire new skills or upgrade existing ones. This initiative contributes to the continuous improvement of the workforce, aligning with the demands of a rapidly evolving job market.
Professional Certification Support
Recognizing the importance of professional certifications, Tamkeen provides support for individuals seeking to attain industry-recognized certifications. This initiative not only enhances the employability of individuals but also contributes to raising the overall standard of professional qualifications in Bahrain.
Initiatives for Sectoral Growth
Enterprise Support
Tamkeen's Enterprise Support program focuses on providing financial assistance to businesses looking to expand or upgrade their operations. This initiative is designed to stimulate growth across various sectors, fostering economic diversification and contributing to Bahrain's long-term economic sustainability.
Export Bahrain
In support of Bahraini businesses seeking to expand globally, Tamkeen collaborates with Export Bahrain. This initiative provides a range of services, including market intelligence, export financing, and capacity-building programs. Export Bahrain empowers businesses to explore international markets and contribute to the kingdom's economic reach.
Impact on Bahrain's Entrepreneurial Ecosystem
Nurturing Startups
Tamkeen's support programs have been instrumental in nurturing the growth of startups in Bahrain. By providing financial assistance, mentorship, and training, Tamkeen empowers entrepreneurs to overcome challenges and turn their business ideas into successful ventures.
Enhancing Employability
The training and development initiatives offered by Tamkeen significantly contribute to enhancing the employability of Bahrain's workforce. By investing in skills development, Tamkeen ensures that individuals are equipped with the competencies needed to thrive in a competitive job market.
Stimulating Economic Growth
Tamkeen's support for businesses, particularly through enterprise support and export initiatives, plays a crucial role in stimulating economic growth. By fostering the expansion of businesses and facilitating their entry into international markets, Tamkeen contributes to the overall prosperity and sustainability of Bahrain's economy.
Regulatory Reforms and the Regulatory Sandbox
Streamlined Business Processes
Bahrain stands out for its agile regulatory environment. The kingdom has implemented reforms aimed at simplifying business processes, making it easier for startups to establish and operate. These reforms reduce bureaucratic hurdles, enabling entrepreneurs to focus on developing and scaling their ventures.
Regulatory Sandbox for Innovation
A groundbreaking initiative in Bahrain is the regulatory sandbox, providing a controlled environment for startups to test innovative solutions without being stifled by traditional regulatory constraints. This approach fosters experimentation and allows startups to validate their ideas before entering the broader market.
Access to Funding and Investment Platforms
Bahrain Investment Market (BIM)
Bahrain Investment Market (BIM) is a dedicated platform that facilitates the listing of growing companies, including startups. This platform enhances access to funding for startups, allowing them to attract investment and expand their operations. BIM contributes significantly to the liquidity and vibrancy of Bahrain's capital market.
Bahrain Development Bank (BDB)
The Bahrain Development Bank plays a pivotal role in supporting startups through various funding and financial instruments. From venture capital funding to seed financing, BDB's initiatives aim to fuel the growth of promising startups, contributing to the overall dynamism of Bahrain's entrepreneurial landscape.
Bahrain as a Global Employment Hub
Strategic Location
Bahrain's strategic location at the heart of the Gulf region positions it as a gateway for businesses seeking access to markets in the Middle East. The kingdom's connectivity, facilitated by a world-class infrastructure, makes it an attractive destination for global companies looking to establish a presence in the region.
Multicultural Workforce
Bahrain's commitment to diversity is reflected in its multicultural workforce. The kingdom's inclusive environment attracts talent from around the world, fostering a collaborative and innovative work culture. The cosmopolitan nature of Bahrain enhances its appeal as a global employment hub.
Quality of Life
Bahrain offers a high quality of life, making it an attractive destination for professionals seeking both career opportunities and a balanced lifestyle. The kingdom's commitment to providing top-notch healthcare, education, and recreational facilities contributes to its status as a preferred global employment destination.
Initiatives Driving Bahrain's Global Employment Appeal
Economic Diversification
Bahrain's focus on economic diversification aligns with its vision to become a global employment hub. Initiatives promoting sectors such as technology, finance, and tourism create diverse job opportunities, attracting professionals with varied skill sets.
Investment in Education and Training
Bahrain's investment in education and training is a strategic move to build a skilled workforce. The kingdom collaborates with educational institutions and industry stakeholders to ensure that the workforce is equipped with the skills needed to thrive in a rapidly evolving global job market.
Support for Innovation and Entrepreneurship
Bahrain's support for innovation and entrepreneurship extends beyond startups. The kingdom actively encourages an entrepreneurial mindset, fostering an environment where professionals are empowered to contribute to innovative solutions and drive economic growth.
Challenges Faced by Startups in Bahrain
While Bahrain's rise in startups and emergence as a global employment hub is remarkable, challenges persist. These may include competition from regional hubs, the need for continuous infrastructure development, and global economic uncertainties. However, the kingdom's proactive approach to addressing challenges positions it for sustained growth and influence in the global startup and employment landscape.
Limited Access to Funding
While Bahrain has made strides in enhancing access to funding through initiatives like Tamkeen and the Bahrain Investment Market (BIM), startups often face challenges in securing sufficient capital. The need for alternative funding sources and increased investor awareness remains crucial for sustaining the momentum of startup growth.
Talent Acquisition and Retention
Startups in Bahrain encounter competition for skilled talent, especially in emerging sectors like fintech and technology. Attracting and retaining qualified professionals pose challenges, necessitating innovative recruitment strategies, enhanced training programs, and collaboration with educational institutions to bridge the talent gap.
Regulatory Compliance
Despite the introduction of the regulatory sandbox, startups still grapple with navigating regulatory complexities. Adhering to legal requirements while fostering innovation demands a delicate balance. Simplifying regulatory processes further and providing clearer guidelines can contribute to a more conducive environment for startups.
Market Size and Global Expansion
Bahrain's market size is relatively small compared to global hubs. Startups aiming for rapid growth often face limitations in the local market, prompting the need for effective strategies for international expansion. Collaborative efforts, such as those facilitated by Export Bahrain, become crucial for startups looking to access global markets.
Technological Infrastructure
While Bahrain has made significant strides in developing its technological infrastructure, startups may encounter challenges related to connectivity, speed, and access to advanced technologies. Continued investments in digital infrastructure are essential to empower startups to harness the full potential of emerging technologies.
Read More: Geography, Planning And Developmental Projects In Bahrain: Expansion Of The Construction Sector
Future Outlook and Strategies for Success
Diversification of Funding Sources
The future success of startups in Bahrain hinges on diversifying funding sources. Beyond traditional channels, startups should explore partnerships, venture capital, and global investment opportunities. Establishing a robust ecosystem that connects startups with a diverse range of investors is pivotal for sustained growth.
Continuous Talent Development
Addressing talent challenges requires a multifaceted approach. Startups should collaborate with educational institutions to tailor courses to industry needs, invest in continuous training programs, and create attractive work environments. Fostering a culture of innovation and professional growth can enhance talent retention.
Regulatory Agility and Support
To navigate regulatory challenges, startups and regulatory bodies must collaborate closely. Establishing clear frameworks, regular dialogues, and a responsive regulatory environment will foster an ecosystem where innovation thrives while ensuring compliance. Streamlining processes can empower startups to focus on their core objectives.
Global Market Expansion
Startups in Bahrain should strategize for global expansion from the outset. Leveraging platforms like Export Bahrain, building international networks, and participating in global events can open doors to diverse markets. Collaborations with international partners and organizations can provide valuable insights and opportunities.
Technological Advancements
The future success of startups is intricately tied to technological advancements. Continued investment in digital infrastructure, adoption of emerging technologies, and a proactive approach to staying abreast of industry trends are vital. Startups should embrace a culture of innovation, fostering an environment that encourages experimentation and adaptability.
Startups in Bahrain and their Emergence as a Global Employment Hub: Facts, Figures and Statistics
- Bahrain ranks 9th out of 53 destinations in the Expat Insider 2023 survey.
- The Kingdom of Bahrain ranked as top 10 MENA Ecosystem and top 10 Emerging Ecosystem in Performance in the 2023 Global Startup Ecosystem Report.
- Bahrain’s ecosystem value increased to $928 million compared to last year’s figure of $564 million, marking an increase of 54% in ecosystem value growth- which is a measure of economic impact.
- Home to 98% of Bahrain’s startups, Manama has a vibrant startup ecosystem that is ranked 306 in the world.
- Within Manama there is an increased attraction for entrepreneurs to set up their startups in industries such as Fintech, Edtech, Ecommerce & Retail. These three industries represent about 51% of the startups represented on the Startup Ecosystem Map of Manama.
- Manama is Bahrain's 1st best startup ecosystem and is ranked 9th in Middle East.
- Bahrain’s real GDP continued its positive performance during 2022, growing by 6.9% 2022 YoY.
- Economic growth in Bahrain was mainly driven by the non-oil sectors which grew by 9% YoY in 2022 in real terms.
- Five sectors posted annual real growth exceeding 7%, of which the sectors previously affected by COVID-19 saw the highest growth rates: Hotels and Restaurants which grew of 18.1% and Transportation & Communications by 15.1%. Additionally, the Manufacturing sector expanded by 7.6%, Trade by 7.5%, and Government Services by 7.1%.
- Bahrain's GDP expanded by 22.9% during Q2 2022 YoY, with the oil sector growing significantly by 51.7% due to the increase in global oil prices. The non-oil sector also grew by 17.8%, mainly due to the contributions of the Manufacturing and Hotels and Restaurants sectors, which expanded by 49.8% and 25.5% YoY, respectively.
- As of May 2023, 80% of the country's GDP is generated from non-oil sectors, which is a 50% increase from the past decade, where 40% of the economy's reliance was on oil and gas reserves.
- The Kingdom of Bahrain was ranked 15th amongst MENA Ecosystem in Talent & Experience.
- 44 Bahraini startups raised US$136 million in 2022, and the Kingdom attracted over US$1.1 billion in direct investments.
- By December 2022, the country’s total public revenues increased by 42% to $9.26 billion.
- In 2022, the country's GDP hit an all-time high, where GDP rose by 4.9% and non-oil real GDP increased by 6.2%.
- By March 2023, Bahrain had attracted more than US$130 million of investments in the IT Sector, which aims to create more than 900 new jobs in the next year.
- Bahrain's internet penetration is expected to grow by 99.5% by 2026.
- Revenue in the eCommerce market is projected to reach US$1,152.00mn by the end of 2023.
- Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 8.27%, resulting in a projected market volume of US$1,583.00mn by 2027.
- In the eCommerce market, the number of users is expected to amount to 1.19mn users by 2027.
- User penetration will be 70.8% in 2023 and is expected to hit 77.3% by 2027.
- Digital Revenue is expected to reach 46% by 2024.
- Bahrain dinar is the second strongest currency in the world, as it is divided into 1000 smaller currency units. The Bahraini dinar is only used in Bahrain and is pegged against the US dollar.
- Bahrain's financial sector contributes around 17% of its GDP, and Bahrain FinTech Bay is the leading Fintech hub in MENA.
- Bahrain ranked #35 in the World Talent Ranking from the International Institute for Management Development World Competitiveness Centre. Tamkeen offers entrepreneurship training programs, as well as training in the manufacturing sector. It also plans to train 1,200 individuals in coding and other emerging technology skills in collaboration with the General Assembly and the Bahrain Institute of Banking & Finance.
- More than 60% of consumers in Bahrain are willing to pay for digital products.
- The Ecommerce industry in GCC was expected to reach a penetration rate of 12.2% of offline retail in 2025 however it reached 16.3 percent after the pandemic.
- By 2027, a 35% growth is expected in the national employment sector in the IT and technology industry.
Top Nationalities in Bahrain
- Indians - 27%
- Pakistanis - 13%
- Philippines - 10%
Conclusion
In conclusion, Bahrain's ascent as a rising star in startups and a global employment hub is a testament to its vision, adaptability, and commitment to fostering innovation. The kingdom's strategic initiatives, supportive policies, and focus on diverse sectors position Bahrain as a dynamic player in the global economic arena. Bahrain continues to embrace innovation and attract global talent and elevate its own status, along with contributing to the broader narrative of the Gulf region as a hub for entrepreneurship, creativity, and economic diversification.
Read More: Integration Of ICT In Bahrain's Economy
Frequently Asked Questions (FAQs)
Q1: Why Choose Bahrain as a Global Employment Hub for Startups?
A: Bahrain offers a strategic location at the heart of the Gulf region, providing easy access to key markets. The kingdom's commitment to economic diversification, supportive policies, and a multicultural workforce make it an attractive destination for startups seeking global expansion.
Q2: What Supportive Initiatives Does Bahrain Offer for Startups?
A: Bahrain has a range of initiatives to support startups, including the regulatory sandbox for testing innovative solutions, financial support through programs like Tamkeen, and platforms like the Bahrain Investment Market (BIM) for funding opportunities.
Q3: How Does Bahrain Facilitate Global Market Expansion for Startups?
A: Bahrain actively supports startups in their global expansion efforts through initiatives like Export Bahrain. This platform provides market intelligence, export financing, and capacity-building programs to help startups explore and succeed in international markets.
Q4: What Sectors Are Thriving for Startups in Bahrain?
A: Key sectors driving startup growth in Bahrain include fintech, information and communication technology (ICT), artificial intelligence (AI), and Health-Tech. The kingdom's focus on digital transformation creates opportunities for startups in these innovative sectors.
Q5: Is There Adequate Funding Support for Startups in Bahrain?
A: Yes, Bahrain provides funding support for startups through programs like Tamweel and the Bahrain Investment Market. These initiatives offer financial assistance, low-interest loans, and opportunities for startups to attract investment and fuel their growth.
Q6: How Does Bahrain Address Regulatory Challenges for Startups?
A: Bahrain has implemented a regulatory sandbox, allowing startups to test innovative solutions in a controlled environment. Additionally, ongoing efforts are made to streamline regulatory processes and provide clearer guidelines to create a conducive environment for startups.
Q7: What Steps Has Bahrain Taken to Enhance Workforce Skills?
A: Bahrain, through initiatives by Tamkeen, focuses on enhancing workforce skills by providing support for training and development programs. This ensures that the local workforce is equipped with the skills needed to contribute to the growth of startups.
Q8: How Can Startups Attract and Retain Talent in Bahrain?
A: Startups in Bahrain can attract and retain talent by implementing innovative recruitment strategies, offering attractive work environments, and collaborating with educational institutions to align courses with industry needs. Continuous training programs also contribute to talent retention.
Q9: What Technological Infrastructure Does Bahrain Offer for Startups?
A: Bahrain has made significant strides in developing its technological infrastructure. While challenges may exist, ongoing investments ensure access to digital infrastructure, connectivity, and support for startups to harness the full potential of emerging technologies.
Q10: How Can Startups Collaborate and Contribute to Bahrain's Ecosystem?
A: Startups can collaborate by participating in initiatives like StartUp Bahrain, networking events, and industry-specific forums. Contributing to Bahrain's ecosystem involves sharing expertise, engaging in partnerships, and actively participating in the vibrant startup community.
