New startup act throws lifeline to university graduates

Tunisia has approved measures to facilitate the establishment of innovative startups in an effort to reduce graduate unemployment, tackle the academic 'brain drain' and promote the development of the digital economy.

The measures are included in the Startup Act adopted by the Tunisian Parliament on 2 April 2018.

The Act was in response to a call from the Tunisian university startup community for a conducive framework for startups as a means to tackle the country’s weak innovation levels, arrest the exodus of academics and provide young Tunisian graduates with the opportunity to form their own businesses.

According to the Global Competitiveness Report 2017-2018, higher education performance levels in science, technology and innovation are low in Tunisia. Out of 138 countries, Tunisia ranked 93 in higher education and training, 107 in the quality of the education system, 111 in scientific research institutions, 104 in innovation, and 109 in university-industry collaboration in research and development. Tunisia currently ranks 83 out of 119 countries in the Global Talent Competitiveness Index 2018.

Unemployment is currently at 15.5% with university graduates making up about 30% of jobless youth, according to the 2017 fourth quarter report issued by the National Institute of Statistics.

The Startup Act is aimed at putting Tunisia on the map as a regional hub for entrepreneurial skills in Africa. Tunisia must climb four places from its current fifth position in Africa if it is to overtake the top four African countries in the 2017 Startup Ecosystem Ranking. The top four include South Africa, Kenya, Egypt and Nigeria.

The Startup Act provides for financial and functional support to startups, including exemption for startups from corporate taxes for up to eight years, special customs procedures, exemption from capital gains tax on investments made in startups, up to one year of time off from current jobs for both private and public sector employees, and salaries for up to three founders during the first year of operations.

The Act also calls for the setting aside of funds to encourage university graduates to start their own businesses.

The law is one of the main legs of the US$166 million Digital Tunisia 2020 national strategic plan that aims to facilitate the integration of young graduates into the job market using information and communications technology (ICT). It will be implemented over a four-year period (2018-21).

The Digital Tunisia 2020 plan indicates that ICTs could be transformed into one of the strategic sectors for promoting employment. The ICT sector’s contribution to job creation in Tunisia increased from 1.9% in 2006 to 3.1% in 2012. Over 13,000 ICT graduates are produced each year and there are over 200 university ICT courses, according to figures from the Tunisian Ministry of Higher Education and Scientific Research.

“This Startup Act is a good inducement for Tunisian and North African universities to integrate social and business entrepreneurship as part of the university curriculum in order to produce self-employed entrepreneurs,” Hamza Alfrmawi, ICT expert at the Islamic Development Bank Alumni and Science Development Network, told University World News.

Samir Khalaf Abd-El-Aal, research professor at the National Research Centre in Cairo, told University World News that “African universities must not start from scratch but should adopt best practices in promoting student-led tech startups".

“North African universities must partner with NGOs and corporations to help equip potential social entrepreneurs with the education, training and skills necessary to pursue opportunities in sustainable ways, as well as open up sources of venture funding, mentoring and fortifying social entrepreneurship ecosystems,” said Abd-El-Aal.