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Startup Ecosystem: Sfax - Tunisia
Startup Ecosystem: Sfax - Tunisia
Ecosystem
Report
Sfax | Tunisia
Sfax | Tunisia
Sfax
Sfax is the second largest city in Tunisia, with a The startup ecosystem in Sfax is developing, and has
population of approximately 275.000 people. Sfax is the opportunities in the form of strong human capital,
capital of the Sfax governorate, located 270 km infrastructure, and macro conditions. Access to
southeast of the Tunisian capital Tunis on the finance, market factors, and a less mature startup
Mediterranean coast. Founded in 849 AD, Sfax is an scene are challenges for the city.
ancient city with a wealth of cultural and historical
heritage. The main economic activities in the city
include industry, agriculture, fishing, and international
trade.
Startup Ecosystem Report Sfax | Tunisia
The Startup
Friendliness
Index (SFI)
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Startup Ecosystem Report Sfax | Tunisia
Research
Design
The SFI analyses data on 81 key indicators within the As a final step, the data are aggregated. Drawing from
six domains representing core elements of a startup best practices in composite-indicator building, we
ecosystem. The SFI utilises a novel methodology that utilise a combination of the familiar arithmetic mean
reflects the importance of interconnectedness between as well as the geometric mean, resulting in an index
domains. which accurately reflects the importance of balance
(having relatively even levels of maturity across all
The SFI relies on data procured from a combination of domains) within an ecosystem.
primary data, collected through surveys and
interviews, and secondary data from established The logic behind this method is simple; imbalances in
sources such as the World Bank and World Economic an ecosystem are important, because deficiency in
Forum. Once gathered, the data are normalised so that even one area may slow or impede entrepreneurship
the index values can be used to compare the cities in completely. For example, excellent infrastructure is of
the SFI. The normalised indicator values range from 0 limited use if there are no funding opportunities
(for a city that has the lowest performance relative to available to initiate a new venture. In other words,
the others) to 100 (for the city that has the best relative there are no substitution effects between domains.
performance). Where relevant, normalised scores are
adjusted to the population of the city. The final SFI scores can be used both as a tool to
compare cities on common indicators, and also offer a
www.startup-meter.org/methodology/ structured lens to evaluate areas of strengths and
weaknesses within individual cities.
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Startup Ecosystem Report Sfax | Tunisia
Executive
Summary
Sfax scores 43,97 in the MENA region SFI, ranking at Sousse Startup Ecosystem
position 5 of 8 measured cities. Within Tunisia, Sfax
outperforms Kairouan in terms of startup friendliness,
but trails Sousse and Tunis. The ecosystem is
imbalanced overall, with strong scores on Human
Capital, Infrastructure, and Macro conditions, but
challenging scores on the domains of Finance, Market,
and particularly Startup Scene.
43.9 of 100
The strongest domain in the city is Macro, where Sfax
is supported by a strong legal framework and relatively
low crime. Infrastructure is another strength for the
city, particularly in terms of access to utilities at a low
cost, and broadly available ICT services. Sfax scores
well in the Human Capital domain, supported by a high
number of university students and skilled workers
relative to its low population. Access to Finance is a
challenge for the city, placing Sfax nearly at the bottom
of the global SFI in this domain due to few options for Startup Scene, Sfax’s lowest scoring domain, ranks at
VCs and Business Angels. In the Market domain, position 12 of 19 global SFI cities, below that of Sousse
Tunisian as a whole scores well on the indicator of GDP and Tunis and above Kairouan. This is due to few
PPP per capita, but shows relatively low Capacity options for support resources such as Accelerators
Utilisation, representing a struggle to reach full and Incubators and a low total number of registered
potential. startups in the city.
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Startup Ecosystem Report Sfax | Tunisia
National Diagnosis
Supporting Entrepreneurship
on a Country-Level
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Startup Ecosystem Report Sfax | Tunisia
Startup Individuals matching certain criteria in Tunisia will be granted one to two years of
Leave leave from their employment in the public or private sectors to begin a new
enterprise.
Startup Any promoter of a startup can benefit from a startup grant for a duration of one
year. The grant provides for the wages for up to three founders/shareholders and
Scholarship full-time employees in the relevant startup. The amounts allocated to the startup
scholarship come from National Employment Fund resources, donations, and any
other resources provided by the legislation and regulations in force. This amount is
between 1000 - 5000 dinars net per month.
Employment In an effort to reduce the cost of hiring new employees, the Act provides for
employment programmes to facilitate recent graduates to start a new venture, or
Programmes join a startup organisation.
Patent Fees The Tunisian government will cover the expenses for patents under certain
circumstances.
Exemption for Startups can benefits from the exemption of corporation tax and the State's
Corporation Tax & assumption of employer contributions and wage earners to the statutory social
Social Security security scheme.
Foreign Several measures are in place to facilitate easy transactions with foreign suppliers
and customers in international currencies.
Currency
Given that there has been less than one year since the Act’s inception, a key consideration will be the implementation
and evaluation of practical impact.
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Startup Ecosystem Report Sfax | Tunisia
Startup
Friendliness Index
Sfax | Tunisia
DOMAINS AND INDICATORS
Startup Ecosystem Report Sfax | Tunisia
1. Human Capital
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Startup Ecosystem Report Sfax | Tunisia
Rates of female entrepreneurship in the city, as Additionally, negative social attitudes and
measured by the percentage of firms with majority discrimination towards women in the workplace are
female ownership, are notably low. Sfax scores the still commonplace, with nearly two-thirds of women
lowest on this indicator of all 19 cities in the global SFI. reporting experiencing discrimination when seeking
Women face challenging circumstances across the work in the private sector. This may help to explain
board in Tunisia, with a much higher unemployment why the female workforce participation rate is so low in
rate and likelihood of employment in the informal Tunisia (24%, compared to the SFI average of 40%),
sector. In Sfax, the total unemployment rate as of 2014 and why entrepreneurship among young women is
was 11,9% - favourable compared to the national rate - virtually non-existent in the city: Sfax scores 0,00 on
yet for women, the unemployment rate is nearly twice this indicator. Incorporating women more effectively
the city average (20,60%). This is in spite of women into the workforce represents a major area of
having higher levels of educational attainment opportunity for Sfax, and Tunisia on a national scale.
throughout the country.
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sfax | Tunisia
2. Finance
Access to finance is challenge in Sfax on a similar In the Sources subdomain, which measures the
level to many other middle-income cities that are still different avenues entrepreneurs pursue to finance
developing in terms of their startup ecosystem. With a their ventures, Sfax scores 45,79, and ranks in the
score of 42.47 of 100 in the MENA region SFI, Sfax middle in the global SFI. Scores on the indicators for
ranks at position 14 of 19 global SFI cities. bank loans, VC funds, and access to public financing
are low. Self-financing is the most common method,
with approximately 43% of entrepreneurs personally
supporting their new ventures. While this number is
significant, it is considerably lower than the global SFI
Public funding 17% Bank loan 17% average of 65%, and results in Sfax ranking at position
11 of 19 global SFI cities. Despite no registered
VC funds 6%
accelerators in Sfax, a few startups are able to secure
accelerator funding from those located in other cities.
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Startup Ecosystem Report Sfax | Tunisia
2%
though above the global SFI average of about 73%.
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sfax | Tunisia
3. Startup Scene
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Startup Ecosystem Report Sfax | Tunisia
There are several programmes that have begun in programme to coordinate with the Tunisian ministry of
recent years to help bring awareness to the higher education to set up entrepreneurship-focused
opportunities of entrepreneurship, and foster startup university courses and to establish centres for
development in Sfax. In addition to the provisions in the supporting the creation of new businesses within the
national Startup Act, plans are underway for a multi- universities themselves in Sfax.
partner international
Accelerators 0.00
Incubators 0.00
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sfax | Tunisia
4. Infrastructure
16.81
infrastructure. The Chamber of Commerce and
43.331
48.57
88.42
77.64
65.82
96.82
67.63
Industry of Sfax highlights the infrastructure of the
governorate and the city in terms of transportation as
well connected. It includes the ports of Sfax and
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$27 USD/month month, it scores first in the MENA SFI (which has an
average of around $96 USD) and below the Tunisia-
wide average of $52 USD. Similarly, living costs are
for a coworking space lower in Sfax than in other MENA cities, with average
living costs of around $483 USD per month compared
The Utility indicators in Tunisia score very well in to $793 USD MENA average. The total costs for utilities
general compared to other MENA cities. It ranks 4 of 8 are also low ($28 USD/month), ranking third in the
in the region, just in the middle of MENA SFI In Sfax, MENA region, fourth in the global SFI, and second in
according to the Foreign Investment Promotion Agency Tunisia.
of Tunisia (FIPA), the rate of electrification is at 99,6%.
There are no electric outages reported in a typical With a pollution index of 90,23, air quality in Sousse is
month, and the electricity quality scores above Cairo slightly poorer than average for the MENA SFI (around
and Beirut with a score of 89,23. 88,7).
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Startup Ecosystem Report Sfax | Tunisia
On ICT infrastructure, Sfax scores well on the indicators The high-performance telephone network of the Sfax
measured. Internet is available with affordable prices in Governorate benefits from full GSM coverage by two
the city ($12,12 USD/month), and Internet speed (upload suppliers. There are 640 miles subscribed to the mobile
and download) scores well compared to MENA cities: telephone network and 142.080 to the fixed telephone
12,34 Mbps download and 7,36 Mbps upload. In Sfax, 39% network. The governorate of Sfax comprises 8 public
of households were connected to the Internet in 2014 Internet centres (Publi-net), and 826 public
(compared to the country average of 29%), and nearly telecommunication centres. The telephone density is
98% have at least one mobile phone (the same as the equal to 17 telephone lines per 100 inhabitants.
Tunisia-wide average).
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sfax | Tunisia
5. Macro Framework
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Startup Ecosystem Report Sfax | Tunisia
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sousse | Tunisia
6. Market Conditions
64% 45%
MENA Average Sfax
Capacity Utilisation
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Startup Ecosystem Report Sousse | Tunisia
6
placing Sfax at the bottom of the MENA region and
Tunisia, and in the global SFI only Accra and Caracas have
a lower scores. The tourism industry is not as developed
as Sousse, according to the Chamber of Commerce and
Industry of Sfax, though the creation of a touristic
environmental area with 3000 beds in Sidi Fankhal
sister cities,
(Kerkennah) is a future project in the region. This city has the lowest number for the
also the lowest number of sister cities (six in total), at the
bottom of the MENA region on this indicator, and scoring MENA cities measured
globally similar to Singapore.
Tourism 48.57
SFI Scores relative to the MENA region, scores range from 0 - 100
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Startup Ecosystem Report Sfax | Tunisia
References
Pourquoi Sfax?
http://www.investintunisia.tn/
Projet D’Appui A La Mise En Œuvre du Plan National Strategique Tunisie Digitale 2020
https://www.afdb.org/
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Startup Ecosystem Report Sfax | Tunisia
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Startup Ecosystem Report Sfax | Tunisia
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Startup Ecosystem Report Sfax| Tunisia
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Startup Ecosystem Report Sfax | Tunisia
About enpact
The non-profit association enpact was founded in 2013
with the aim of empowering entrepreneurship in
emerging and developing countries. enpact supports
founders and startups in Africa, Asia, Latin America,
and the Middle East through diverse programmes,
from the early idea phase until global market entry.
enpact academy develops trainings to foster the quality
of startup support organisations, and enpact data lab
measures framework conditions (such as the startup
friendliness of cities), and derives policy
recommendations.
www.enpact.org
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ISBN 978-3-96604-000-6