Startup Ecosystem Report: Iraq

This report analyses four Iraqi cities – Baghdad, Sulaymaniyah, Erbil, and Basra – in comparison to nine other cities in the Middle East and North Africa in the MENA regional SFI, and 10 additional cities in Asia, Latin America, and Sub-Saharan Africa in the global SFI. Within Iraq, data on Mosul was also gathered, though this city is not analysed in our report.

Startup Friendliness Index scores are determined by examining 81 indicators in six domains: Human Capital, access to Finance, the liveliness of the Startup Scene, Infrastructure quality, Macro framework (describing the political and legal system), and Market conditions (such as trade balance and capacity utilisation). Cities with relatively even scores across domains receive a higher overall score than a city with strong performance in one area, and weak performance in another.

Scores range from 0 to 100, with a score of 0 for the city with the weakest performance, and a score of 100 for the strongest. Throughout the report, the referenced SFI scores are from the MENA regional SFI, and the cities are ranked both in comparison to the MENA and global SFI.

The four cities rank last in both the global and MENA regional SFIs on their total SFI score.

Baghdad, Sulaymaniyah, and Erbil perform similarly in the global SFI, followed by Basra which has a lower score overall. Within the MENA SFI, Sulaymaniyah is in the most favourable position in the country with a score of 24,58, ranking 9th of 13 cities in the MENA region. Erbil has a similar score of 24,45 and ranks 10th. Baghdad is also close, with a score of 24,19, ranking 11th, and lastly, Basra scores 12,98, ranking second-to-last in the region, above only Mosul.

For Sulaymaniyah, Finance and Startup Scene are the strongest domains, while Human Capital and Market conditions are challenging. In contrast, Basra seems to be doing better regarding the Human Capital domain, though it still needs to improve skills to boost the private sector. Erbil’s strengths are in the Infrastructure and Macro domains, whereas Market conditions are particularly challenging. Baghdad performs well compared to other cities in the Finance and Human Capital domains, but the Infrastructure and the Macro domains are weak points.

Based on findings from the Startup Friendliness Index, this report concludes with a series of policy recommendations to support the development of these startup ecosystems. Recommendations are focused on national-level foundational needs, and specific suggestions for the entrepreneurial sector.

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