Ongoing upheaval in Egypt and Tunisia since the 2011 revolutions indicates high levels of dissatisfaction with the political order, and expresses a deep desire for a drastic remodeling of the economic system. Well-educated young men and women still find themselves marginalized and excluded from the political and economic order in their countries. Their initial demands for freedom and social justice have hitherto gone unheeded. At the heart of the ongoing political turmoil lies the demand for a sweeping socio-economic reform that may eventually create an economy that offers inclusive-growth, higher levels of productivity and competitiveness, and more job creation. However, unless certain complex and long-term questions are tackled, it is unlikely that political reform will lead to the creation of stable democracies.

Entrepreneurship is one of the most dynamic approaches to socio-economic transformation and development. It is intimately related to private sector development, micro, small, and medium-sized enterprise policies, job creation, innovation, and competitiveness. However, unlike the study of static policy and of regulatory areas or institutions and structures, analyzing the entrepreneurship ecosystem captures a picture in motion. Tackling the question of entrepreneurship links micro-level analysis that touches upon direct barriers to entry and growth with macro-level analysis that attempts to explain the lack of dynamism, low productivity, undercapitalization and the weak prospects of growth of the broadest base of the private sector in the region. Moreover, it may provide a way out of the spiral of failed development in which Egypt and Tunisia have been caught for decades.

This report wishes to answer two questions: Why has private entrepreneurship in Egypt and Tunisia remained that underdeveloped despite decades of economic liberalization and private sector-friendly incentives and reforms? And how can the entrepreneurship ecosystem in the two countries develop to meet the high expectations of the people of having a productive and just socio-economic order? 

See the following link to view the feature service article from the two sponsoring institutions: http://www.cipe.org/publications/detail/understanding-entrepreneurship-ecosystem-tunisia-and-egypt