According to the Lebanese Innovation Economy Tech Startups 2018 Report by ArabNet, Lebanon displays an exceptionally high number of funds for such a small country, hosting 13 percent of the total number of investors in MENA. Over the past four years and in comparison to other MENA markets, Lebanon has steadily risen in the ranks in both number of deals (around 40 deals in 2016) and value of deals (around US$56m in 2016).
In 1962, al-Majlis al-watani li-l-buhuth al-‘ilmiyya (the National Council of Scientific Research - CNRS) was established with the aim to encourage scientific research. As there is no ministry dealing with national policy-making in science and technology, it is considered as the main umbrella organisation for science and the governmental advisor in this sector, defining the guidelines of the national science policy. According to the “Education Public Expenditure Review – Lebanon” published in 2017 by the World Bank, the Lebanese government allocated 2.1% of national GDP to education. The trend is slightly positive if compared to 2010 (1.8% of national GDP) but it is negative when compared to 2005 (2.4% of national GDP).
The CNRS works with affiliated research centres and cooperates with academic and other scientific institutions. It is also responsible for managing the Centre for Geophysics, the Centre for Marine Science, the Centre for Remote Sensing and the Lebanese Atomic Energy Commission. In 2006, the CNRS launched a new five-year Science, Technology and Innovation Policy. The policy was meant to enhance and diversify science, technology and innovation input in economic activities, through new funding mechanism, and was prepared in cooperation with UNESCO, ALECSO and ESCWA. However, efforts to implement the Science, Technology and Innovation Policy were slowed down due to the effects of military conflicts and subsequently economic and financial constraints. As a follow-up to the Science, Technology and Innovation Policy, in 2014 the CNRS instituted the Lebanese Observatory for Research, Development and Innovation, with support of ESCWA to assess and monitor key indicators in research and development.
Besides this, Lebanon counts several NGOs active in science, including the Lebanese Association for the Advancement of Science (founded in 1968 to enhance knowledge end promote scientific research) and al-Akadimiya al-‘arabiyya li-l-‘ulum (Arab Academy of Sciences), established in 2002 to support and promote excellence in research by Arab scientists, and also to act as a consultative body on scientific issues related to the Arab world. In 2007, the Government recognised by decree the Lebanese Academy of Sciences, a learned society modelled after the French Académie des sciences.
In 2013, the Central Bank of Lebanon issued Circular 331 and initially aimed to provide a capital injection of over US$400m into the Lebanese entrepreneurship ecosystem. This was introduced in a bid to halt the brain drain and boost local employment. Subsequently, in 2016, amendment 419 was introduced increasing the potential investment of the banks to up to US$600m collectively in Lebanese tech startups. This amount represents 4 percent of the capital of Lebanese banks (ArabNet 2018). The influx of money has spurred the creation of new venture capital funds, which cover the various levels of funding, new accelerators, and new co-working spaces. Supporting the sector has also become a top priority at all levels of the Lebanese government. The Ministry of Telecom has taken a leadership role, launching in February 2018, MIC Ventures, a fund of US$48m supported by Alfa and Touch. This seven-year fund aims at investing in local ICT and telecommunication startups to help them boost the Lebanese economy. In parallel, the Investment and Development Authority in Lebanon (IDAL) has launched its Business Support Unit (BSU) to provide startups with the required information, advice, and licensing support in order to start their companies in Lebanon. The sector has reported a growth of eight percent a year and aimed to create 25,000 jobs by 2025. By 2017, it had successfully created 9,000 jobs, and the central bank had approved investments of $368m. In 2019, due to the economic and financial crisis, the trend has started to fall, and the numbers of ventures decreased by the 32% compared to 2017.
Greater Beirut is the main focus for digital users. Sidon, Tripoli and Tyre are the other main urban contexts where digital users are located. The main divides are rural/urban, centre/periphery. Not so much from a socio-economic point of view or a gender divide. However, the respondent profiles of a survey promoted by ArabNet, targeting owners of tech and digital startups with a working product or service based in Lebanon, reveal that the majority of the surveyed (sampled digital startup founders, co-founders, or partners) are male (82 percent) and almost half of all examined are in the more mature bracket of 31 years to 40 years of age (44 percent) suggesting that the environment is dominated by more experienced male entrepreneurs.