February 27, 2023

Green sector can create millions of jobs in crisis and conflict-affected regions

Entrepreneurs and SMEs need support to adapt and catch up with new green policies © 2023, SPARK

Entrepreneurs need support to ‘go green’. 72% of businesses surveyed by SPARK are already involved in or interested in ‘going green’. The green sector has the potential to create 24 million jobs by 2030. Entrepreneurs in fragile and conflict-affected regions need to catch up and tap into these new opportunities. 

The climate crisis is affecting everything in our world as we know it, from geopolitics to economies to life expectancies, resulting in a dire need to transition to a global green economy. In response, the world has come together to address the problem through international initiatives including the Paris Agreement and the UN Sustainable Development Goals and new regulatory processes, such as the European Green Deal.

The potential of green entrepreneurship
With this increased pressure from governments, UN institutions and consumers for companies to “go green”, there are now seismic shifts within the economy towards more environmentally sustainable business models. In addition, recent research by IFC finds that the business case for sustainable practices is strong.

“Companies that do good by the environment, their labor force, and communities, do well financially,” it reports.

As well as businesses that directly focus on green technology and innovation sectors, such as renewable energy, sustainable agriculture, recycling, and ecological construction, ‘greening’ can also be applied to existing businesses to help them shift towards sustainable energy or implement more sustainable supply chains and responsible production methods. It is especially important for export SMEs to ensure they adhere to green regulations and access green investment funds.

Greening is creating millions of new job opportunities in virtually every sector, from tourism to transportation, agriculture to energy. For example, a $1 million investment in solar energy creates 1.5 times as many jobs as the same amount invested in fossil fuels.

Businesses in fragile and conflict-affected regions are “farther behind” on green
However, while governments of most developed economies are making steps towards transforming their industries, green transformation and adaptation still lag behind in fragile and conflict-affected regions. Youth unemployment in these countries remains critically high and while the International Labor Organization (ILO) predicts that the green sector has the potential to create 24 million jobs by 2030, if current trends continue, the Middle East and Africa could experience significant job losses, due to the dependence of these regions on fossil fuel and mining. Entrepreneurs and the ecosystems that support them need to catch up with green economic trends in terms of knowledge, skills, resources and policy.

Leontine Specker, SPARK’s Regional Programme Director for the Middle East, explains: “SMEs and startups in fragile and conflict-affected states are often farther behind in catching up with these trends and tapping into the growth opportunities related to a greener economy. This is where SPARK and our partners can support youth, including women and refugees, to catch up.”

72% of businesses involved in or interested in ‘going green’
A recent study conducted by SPARK of more than 100 businesses in fragile and conflict-affected regions countries revealed that 72% are either involved in green entrepreneurship or are interested in transitioning towards it. This is motivated by a desire to reduce environmental impact, conserve natural resources, achieve cost savings, comply with environmental regulations, and gain a competitive edge in the market.

Despite this interest, green entrepreneurs in these countries face significant barriers that hinder their ability to succeed. There is often limited access to funding and investment for green entrepreneurs, which remains the largest hurdle, but also a lack of support and resources, cultural and societal obstacles, difficulties in finding the right partners, regulatory hurdles, and exporting challenges.

As part of SPARK’s 2030 Strategy, we are improving access to funding and investment by connecting startups and SMEs with SPARK’s specialised network of niche investors that have an interest in emerging markets and green investments. Our market-driven, localised approach supports entrepreneurs with marketing training, access to research and development resources, legal and regulatory support to navigate complex regulatory frameworks and mentorship to develop the skills and expertise of green startups. At the same time, SPARK is greening the entrepreneurial higher education curriculum, working with governments to improve the regulatory framework for green entrepreneurs and specifically supporting SMEs that provide services and solutions to environmental challenges.

FabricAID: green business creates 120 jobs in Lebanon
One such business-owner, Omar Itani, is the 22-year-old co-founder of FabricAID, the largest second-hand clothing collector in the Middle East and North Africa (MENA) region. The social enterprise collects second-hand clothes, shoes and accessories through donations. Donations are then sorted, washed, ironed, repaired if needed and sold at micro prices (under $2 USD) to the country’s most marginalised and poverty-stricken communities, including the 1.5 million Syrian refugees living in Lebanon. 

With funds from the Islamic Development Bank and the Islamic Solidarity Fund for Development, SPARK and its partners supported FabricAID to renovate and open its Souk Oukaz store in Beirut, creating 120 new jobs in the midst of the deteriorating economic crisis in Lebanon. 

Omar Itani, Co-founder of FabricAID at SPARK's IGNITE Conference in Amsterdam © 2022, SPARK

“Job creation is one of the outcomes of focusing on creating a sustainable business model,” says Omar Itani, “and to have a sustainable business model in a country like Lebanon…you really need to understand the problem from [the perspective of] people who are suffering from it and co-create the solution with them.” 

Green Entrepreneurship at DIHAD Conference, Dubai
On March 14th, SPARK will host its IGNITE event on Green Entrepreneurship during Dubai’s DIHAD conference. Featuring speakers from throughout the green entrepreneurial ecosystem, the event brings together experts, policy makers, investors and entrepreneurs from the Middle East to discuss how startups and SMEs in the green sector are solving challenges in access to finance and capacity building to create new, sustainable jobs that are needed the most in fragile and conflict-affected regions.

Speakers include: Alessandro Villa, Deputy Head of Unit for Middle East, Central Asia (Directorate General for International Partnership) at the EU; Salma Al Qubaisi, President of Salma Al Qubaisi Holding and a leading tech investor; Aline Bussmann, Co-Director of Cewas; Semra Sevinc, Founder of Sustainability Academy, Türkiye; Lola Fernandez Flores, Senior Investment Associate at VentureSouq; and Sky Kurtz, CEO of Pure Harvest.