The Great Silk Road: 3 Reasons Why Israel And The Middle East Can Become A Global Fintech Powerhouse

Published date01 September 2023
Subject MatterFinance and Banking, Corporate/Commercial Law, Technology, Financial Services, Venture Capital, Corporate and Company Law, Fin Tech
Law FirmIR Global
AuthorMr James Scobie

The great silk road: it's the historic route which spanned 6,400KM from the Bosphorus in the West to Xi'an in the East and transported spices, precious metals, tea, cotton and now... financial technology?

Together, Israel and the Middle East are the historic custodian of the silk road - a corridor for trade, information and more importantly, ideas. The region marks the crossroads between Western and Eastern civilisations, and the meeting place of Western, Eastern and its own ideas.

With the introduction of the Abraham Accords, a new age has dawned in the region, fostering a completely different type of collaboration for Israel and the United Arab Emirates (UAE). The Accords help to turn our focus outward, leveraging our rich entrepreneurial history, technological progress and fostering further financial investment. The agreement also creates the perfect melting pot for global fintech to take root and flourish.

Here are three reasons why I believe Israel and the Middle East can become a fintech powerhouse.

1. Global-first entrepreneurship

The Startup Nation is a well known story in the global business community of Israel's rise to commercial prominence. Since the early 2000s, economists believe two factors - mandatory military service and immigration - have contributed to the global entrepreneurship we see today.

According to economists, Senor and Singer, mandatory military service created a young workforce that developed a wide skill set as well as a wide contact network. Likewise, Israel's history as a country of immigrants has created a culture of self-reliance and self-starting. Together, Senor and Singer (The Economist, 2010) believe these two factors have made Israel a country with more tech startups and a larger venture capital industry per capita than any other country in the world. Today, and according to the most recent data, investment into Israel stays strong at $28,000 per capita, compared to investment into the US at $1000 per capita.

Fast-forward to 2023, Israel's perfect storm of its widely skilled and contacted workforce, its self-starter mentality and continued appetite from venture capitalists, continues to provide a melting pot for innovation and technological progress, despite the recent global economic downturn. And, as a small market, Israel-based entrepreneurs have developed their products with an eye for the global stage.

2. Generational (r)evolution

If Israel and the broader Middle East are a breeding ground for supplying...

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