In a digitally globalized world, the free float of innovative ideas, skills and know-how ignites the hunger for entrepreneurship and economic sustainability. In Somalia, an uprise for entrepreneurship with a local context is spearheading a new trend of start-ups. Innovation-inspired businesses with a global mindset are also taking a great pace. Women-led start-ups have an upsurge, too. And above all, governmental efforts in establishing favourable environments for those trends are also taking a shape. In this article, we are going to capture Somalia’s new trend towards entrepreneurship and the developmental impacts it is having on the nation’s economy and prosperity.

Small Enterprises on the Rise

The rise of start-ups and small businesses in Somalia is flourishing. Their economic impact on job creation as well is widely noticeable. This made a significant milestone in the direction of the creation of more inclusive and technologically advanced market in the country that can generate jobs as well as address chronic societal issues. Access to technology and internet which permits innovative ideas to thrive increased significantly the rise of start-ups and small businesses in Somalia. In Somalia, access to relatively cheap internet and a demographic of brilliantly energetic young men and women meant the rise of innovation in the business sector. Traditional way of setting up consumer-based businesses and products is becoming a hard sell nowadays. Start-ups and other innovation based small businesses are taking hold in the Somali markets and lot of people are drown to those opportunities as they take shape.

To examine this new prospect in Somalia, we hosted a series of Radio Shows at two radio stations in Mogadishu, Somalia. The first episode which aired at Goobjoog FM discussed the rise of start-ups in Somalia and their economic impact on job creation. We invited both start-ups incubated at IITE institute and other rising small businesses in Mogadishu to share their stories and efforts in creating jobs and economic prosperities in Somalia. Apart from their success stories, each start-up has directly contributed to job creation in Somalia. That feat is also true for many emerging start-ups in Somalia that are venturing into the markets with new opportunities.

Innovation Takes Lead

The rise of start-ups in Somalia is also coupled with their innovative ways of solving and addressing social issues. There is an increasing number of social businesses in Somalia dedicated to gain profits and at the same time work towards social wellbeing. This new model of businesses, inspired by the call for eco-friendly products and businesses, has seen a momentous surge in the last years in Somalia. With the knowledge that environmental issues have a negative impact on the economic growth and outlook of the country, a great number of start-ups have now turned their attention to this sector. They have contributed positively to the societal and governmental efforts towards bridging that gap. These innovative initiatives gave space and platform to a large community of young men and women to run their own social businesses and contribute to the well-being of their families and communities. 

With a goal to dissect this new trend, we again hosted another episode of our Radio Shows Series now at Dalsan FM with the main focus of start-ups in Somalia and their innovative ways in addressing social challenges. In this episode, we invited a line-up of start-up leaders who are all involved in social businesses for the wellbeing of the society. Owners and executives of Doogdoon, an enterprise that turns trash into eco-friendly products, and Shalaambood Coconut Oil, a natural skin care oil producing company, participated in this particular episode. With a mission to gain profits, those start-ups and others as well are also focusing on social wellbeing, a new prospect in Somalia’s long list of adventurous businesses.

Upsurge in Women-led Start-ups

Though Somali business market is largely dominated by men, women-led businesses are also on the increase. As Somalia descended into chaos three decades ago, most of the economic infrastructures of the country have become non-existent. This contributed to an already deteriorating gender gap in the ownership of businesses in the ever-growing market. This meant widespread unemployment for the traditionally male dominated job markets. Business large or small have also collapsed due to the worsening economic and security conditions of the country back then. This meant women, who were largely marginalized in these fields earlier, to find new opportunities to enter the market and create more women-led businesses. Nowadays, with the country recovering well from the past conflicts, women-led start-ups are on the increase and finding greater share of the market. The innovation-based small businesses and start-ups gave young women a flexible opportunity where they can run their own business while at the same time garnering skills and knowledge enough to advance their professional capacity.

To underline this increase of women-led start-ups in Somalia and their significant contributions to Somalia’s economy, we have again hosted the third episode of our Radio Shows Series dedicated to this agenda at Goobjoog FM and talked to young and energetic women leaders in the business including Zamaan Flowers, Quman Company and Tolmoon Collections. The episode has widely featured the upturn of women-led start-ups and businesses in Somalia with a special focus on how their commitments contributed to the nation’s economic growth. This success story is not just the end of the line but a glimpse of what to come. 

Commitments in Regulatory Efforts

Authorities play a significant role in the development and sustainability of the innovation-based markets, as well. The government of Somalia has been working closely with business community and associations to find ground rules and incentives enabling these businesses to thrive. A well-functioning free market without or limited entry caps and, unfair competition and monopolies will not only allow small businesses and start-ups to flourish but will also give technology and cutting-edge innovation to take hold in the Somali business arena. Although Somali governments, in their successive tenures after the civil war, have impacted a slow process in terms of governance and setting the stage for others to work on, yet significant milestones have been reached in creating harmonized ecosystem for start-ups and small businesses to work in. 

To address that issue and dissect it with more focus, we hosted one last episode of our Radio Show series this time at Dalsan FM to analyse the role of government efforts in creating harmonized ecosystems for SMEs in Somalia. We invited the Director of Trade at the Ministry of Commerce & Industry of Somalia, Mr. Abdullahi Sheikh Ahmed, Iqra Abdi Hashi, a businessowner, as well as our own Mohamed Okash from IITE Institute to this special episode. The Director has, in particular, shared the key successes of the government in creating viable environment for SMEs in Somalia as well as the aspirations of the ministry to streamline the nation’s business ecosystem.

In going forward, with this momentum and uprise in start-ups, hunger entrepreneurship and governmental efforts in creating harmonized ground rules for businesses, Somalia’s search for wider prosperity and business dominance, in particular, can finally bear fruits.

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Mohamed Shidane

Mohamed Shidane is the Partnership Builder for The Next Economy at IITE Institute.

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