Crisis has silver linings
says report on innovation

Prospects in fintech, e-commerce,

SaaS, digital marketing, and fashion

The crisis has inadvertently created opportunities including demand for new products and services, cheaper cost of labor and office rent, export opportunities, and higher domestic demand, according to ‘Braving the storm: Safeguarding the Lebanese Innovation’, a report published earlier this year by ArabNet.

“There are silver linings to the crisis. In many instances, it has galvanized startups to innovate and expand into new markets. Currency depreciation pushed certain costs down, helped boost exports for some startups, and created a favorable environment for outsourcing, leveraging available local expertise,” according to the report. The deterioration of the exchange rate, which has made imports more expensive when denominated in lira, has triggered an increase in local demand for needs-based products and services.

The drive to develop new products and services is the most cited opportunity created by the crisis (more than 52 percent of surveyed startups). Scalable, tech-enabled solutions chiefly in e-commerce, education, gaming, software as a service (SaaS), and fintech have a growth potential. SaaS is a software licensing model in which access to the software is allowed on a subscription basis with the software being hosted on external servers. More than 83 percent of fintech startups said that developing new products and services is the main opportunity offered by the crisis in light of the banking crisis and the potential local market for fintech solutions. The opportunity to develop new products and services was also cited by over 58 percent of e-commerce startups.

Nearly 46 percent of firms said that the crisis has pushed them to enter new foreign markets. Export opportunity was chiefly cited by businesses operating in the SaaS, agro-food, pharmaceutical, and fashion sectors. More than 58 percent of SaaS firms said that the crisis has pushed them to expand into new markets outside the country. “There is an opportunity in focusing on services, trades, and skills that are developed in Lebanon, such as digital marketing, fashion, and pharmaceuticals manufacturing,” according to the report. Businesses that leverage available expertise in these fields are benefiting from a favorable environment for outsourcing created by the crisis.