Are Libyans ready to embrace entrepreneurship as a path toward economic empowerment? This was the main question that Deraya's research team investigated before the official launch of the Deraya initiative in May 2023.

In order to tailor the initiative’s events and activities to the needs of entrepreneurs in Libya, the team collected data through a survey to analyze the status quo of the Libyan startup ecosystem and assess the level of entrepreneurial awareness and readiness among existing and aspiring entrepreneurs who are shaping the future of the private sector in Libya; which in turn contributes to the country’s economic growth. 

The survey was designed based on the following rubrics to assess entrepreneurship:

• Opportunity perception

• Risk-taking and fear of failure

• Networking and social connectedness

• Entrepreneurship awareness and skills

The needs assessment survey was distributed through social media, e-mails, and on-ground university visits, and received a significant number of responses (1,824 responses) from all different educational, occupational, and residential backgrounds. This large sample size allowed for a comprehensive understanding of the challenges and opportunities in the Libyan entrepreneurship landscape and provided valuable insights into the sectors that hold promise for starting and growing businesses in the country.

The survey was promoted as a self-assessment test to help aspiring entrepreneurs and business owners evaluate their readiness for entrepreneurship and see if they have what it takes to build a successful business. The test was scored out of 100, and the respondents’ level of entrepreneurship readiness and awareness was determined based on the following scale: 

• From 0% - 45%: Doesn’t have enough readiness to become an entrepreneur

• From 45% - 85%: Capable of launching a business to some extent

• Over 85%: Strongly capable of launching a business

Entrepreneurship Readiness and Awareness Survey Findings

The survey's findings indicated a very strong level of readiness and inclination towards entrepreneurship in Libya. On average, the survey participants attained a total score of 86% - which was calculated based on their scores in each of the above-mentioned entrepreneurship assessment rubrics.

The analysis of the survey’s results also revealed that most participants showed a high level of opportunity perception with an average score of 88%, which was the main factor driving the overall high score. Following closely behind were the fear of failure, networking, and entrepreneurship awareness factors with average scores of 86%, 86%, and 85% respectively.

Other Important Findings

1. Tagoraa city in Tripoli had the highest average score for entrepreneurship readiness, followed by Masrata-Masrata, Benghazi, Sabha city in Sabha, and Tripoli city in Tripoli.
   
   
2. Refugees demonstrated the highest overall average score, indicating their outstanding readiness and awareness of entrepreneurship (85.8%). This surprising similarity in scores between refugees and Libyan citizens suggests that despite the challenges that refugees face, many of them have developed remarkable entrepreneurial skills and a strong drive to succeed.
   
   
3. From the discrepancies in total average scores, it was observed that the level of education has minimal to no impact on entrepreneurship readiness among Libyans. Remarkably, even respondents without a formal degree demonstrated a high level of readiness and awareness in the context of entrepreneurship.
   
   
4. Only a minor discrepancy in the average total score between genders, and between groups of different employment levels was observed.

These slight variations across different occupations, educational backgrounds, genders, and residential statuses highlight the common thread that Libyans, regardless of their gender, occupation, or educational background, exhibit a robust inclination toward entrepreneurship. 

Several assumptions can be given to explain this high inclination. Their dissatisfaction with economic conditions and the unfavourable business environment may contribute to this trend. Additionally, according to the World Bank, the labour market in Libya is characterized by high unemployment, with an official rate of 20.7% in 2022. More than  85%  of those who work are employed in the public and informal sectors. Therefore, a closer examination is needed to delve into the reasons behind this high awareness and propensity towards entrepreneurship in Libya.

Challenges Impacting Entrepreneurship in Libya

Entrepreneurship in Libya faces unique challenges that impact its growth and development on multiple levels. However, these challenges are not insurmountable, and with the right strategies and support, they can be addressed to create a more promising environment for entrepreneurs in Libya.

When we asked the entrepreneurship readiness survey’s participants to select from a list the challenges they faced/ think they will face once they start their businesses, the answers revealed discrepancies in the level of impact that each challenge has on entrepreneurs in Libya - which was reflected by the number of total selections received.

Based on the number of selections, we’ve divided the challenges impacting entrepreneurship in Libya from high impact to low as follows:

The main challenges faced by entrepreneurs in Libya include:

1. Lack of financial institutions and access to funding
2. Economic situation
3. Political conditions

Challenges with moderate impact include:

1. Libyan culture and the condition of local infrastructure in Libya
2. Lack of marketing skills
3. Lack of financial management skills
4. Difficulty with legal regulations (registering a business)

Challenges with low impact were as follows: 

1. Fear of hiring the wrong people
2. Lack of leadership and managerial skills
   
   

It’s worth mentioning that Refugees, asylum seekers, and immigrants in Libya find that one of the main challenges they face is the legal system in Libya, as it was the third most selected challenge for them; ahead of the lack of financial institutions and economic conditions.

As for females, the following are their most faced challenges when starting a business in descending order:

1. Lack of financial institutions
2. Economic conditions
3. Challenges related to Libyan awareness & culture
4. Lack of financial management skills

As for the municipalities, the top two challenges faced by entrepreneurs in Tripoli, Benghazi, Derna, and Sabha (i.e. lack of financial institutions and economic conditions) were similar to a large extent. However, there were some discrepancies among municipalities regarding the third and fourth-ranked challenges. These discrepancies are demonstrated as follows:

• Compared to Tripoli, Sabha, and Derna, Benghazi-based entrepreneurs face slightly more difficulties related to awareness and culture; as it was the third most selected challenge by the respondents in Benghazi. 

• The lack of financial management skills challenge was the third most selected challenge by entrepreneurs in Sabha, while it ranked sixth in Tripoli, Derna, and Benghazi. 

Most Promising Sectors to Start a Business in Libya

Studying market trends and identifying the sectors that offer good potential for growth are crucial first steps in the process of creating and developing new businesses. Hence, we asked the survey participants to select their most preferred sectors out of a list of 20 sectors that are pivotal in shaping the future of our world (see the full list under question number 12 in the survey).

Based on the results of the survey, 7 sectors were identified as top sectors that hold promise for starting and growing businesses in Libya.

The top preferred sectors to start a business are as follows:

1. E-commerce
2. Marketing
3. Education
4. Manufacturing
5. Information and Communication Technologies
6. Agriculture and Livestock
7. Real estate

It’s important to mention that the respondents’ top selected sectors were influenced by factors such as market needs, local economy, social and technological developments, and changes in demand and supply.

On a municipality level, sectors that have the highest scores and are common in Tripoli, Benghazi, Sabha & Derna are E-commerce and Marketing.

Some dissimilarities between different municipalities include:

• The Agriculture and Livestock sector is relatively more attractive for Libyans in Sabha, unlike other municipalities.

• The same goes for the Manufacturing and ICT sectors in Tripoli. (Unlike other municipalities, the Manufacturing sector comes in the fourth rank and ICT comes in the third rank in Tripoli)

• Unlike other municipalities, the Education sector comes in the third rank and Manufacturing comes in the fourth rank in Benghazi and Derna.

As for discrepancies on the gender level, the most selected sectors by females only are Education, E-commerce, Marketing, Wellness & Lifestyle, and Manufacturing.

Conclusion

Libya’s high entrepreneurship readiness score suggests that while it possesses fertile ground for fostering entrepreneurship, ongoing efforts to nurture and sustain this environment are crucial to further enhance the readiness and success of budding entrepreneurs in the country.

Promoting an entrepreneurial culture from an early age, offering education in new technologies, facilitating access to financing, and creating support networks, such as mentoring programs and collaborative workspaces are recommended to fast-track Libya’s entrepreneurial ecosystem development.

In the first phase of the Deraya initiative, the main focus was on planting the seeds of innovation and collaboration by offering educational webinars, interactive startup weekend events, and hackathons to transform new ideas into viable businesses. 

Download the full Entrepreneurship Readiness in Libya report for free through this link.