Amman is well known across the region as an IT centre of excellence. It continues to benefit from the enlightened Jordan Education Initiative (JEI), currently in its second year of operation, which produces highly qualified IT graduates. But as graduate numbers increase, the problems of creating a home-grown IT industry to attract and retain the talent have intensified.

At present, most graduates choose to apply their knowledge and skills in the Gulf. Even more frustrating for those in the industry has been the difficulty of raising the necessary funds to get start-ups off the ground. Local banks and financial institutions have proved reluctant to invest until recently.

‘People are slowly beginning to understand the need to invest in technological ideas, seeing that although there is risk, there can also be great rewards,’ says Omar Hamarneh, director of iPark, a technology incubator supported by the Higher Council for Science & Technology (HCST). Some of the first venture capital firms to be set up involving the local Atlas Investment Bank and Jordan Venture Projects proved unsuccessful as the banks were risk-averse, preferring safer options in real estate. However, with royal support, leading industry figures such as Hamarneh, Marwan Juma, former chairman of the Information Technology Association of Jordan (int@j), and Laith al-Qasem, chief executive officer of Jordan Technology Group (JTG), got together to work out what would be the best way to help IT start-ups.

Match funding ? where the private sector contributes a certain amount and the government matches the investment with an interest-free soft loan ? was proposed, as were ideas on specific laws aimed at funding research and development. But many of these home-grown funds ‘didn?t have teeth’, Hamarneh says, with most investment coming from the Gulf, either from Saudi or Kuwaiti private investors or fund groups. ‘Start-ups really only require not much more than JD 50,000 to keep floating for a while,’ Hamarneh says.

An important development was the establishment in January 2002 of the National Fund for Enterprise Support (NAFES). NAFES aims to offer financial support to small and medium-sized enterprises (SMEs) with five-100 employees ? a category many IT start-ups fall into. A product of the Jordan-Japan industrial development programme, NAFES is supported by the Japanese government to the tune of $5 million a year. Last year the Japan International Co-operation Agency (Jaica) provided $10 million ? a move that could bode well for the IT sector in the future. is one example of a successful Jordanian-owned IT start-up, which has seen rapid growth since its launch in 2000. Jeeran specialises in Arab development software. It offers individual businesses the chance to create their own website and to upload and store their sites on a web server using Arabic-language web tools. Its customer base has grown by 300 percent a year, with more than 60 per cent of its users located in the Gulf. It is also popular in Syria. According to Hamarneh, Jeeran is proving attractive to major internet providers, such as Yahoo, because of its in-depth local and regional knowledge.

‘Across the sector there has been considerable activity over the past nine months in IT start-ups in areas of security encryption, stock market electronic trading, system integration and e-government,’ says Khaldoun Tabaza, chairman of Riyada Ventures. ‘It?s a good time to raise money, as we are starting to see an increase of investment from the Gulf, as well as from Syrian and Iraqi private investors.

‘Jordan should try to avoid sporadic success stories and develop a competitive advantage. We need to carve out a niche for ourselves. IT could potentially help us leapfrog ahead in terms of economic development.’