This article is a crosspost with the Stanford Social Innovation Review.

AlemHealth, an Emirati medical startup, can remotely diagnose and treat patients via telecommunications technology, allowing patients in rural areas to receive timely care in a way never before possible. To date, AlemHealth has diagnosed more than 3,000 cases, 600 per month, with more than 100 physicians reading its platform. Though young, AlemHealth and a host of other health startups are addressing access, quality, and cost-efficiency challenges through a variety of new models. Yet these organizations face lingering hurdles that affect their ability to scale and enhance their impact in a still-developing entrepreneurship ecosystem. In partnership with General Electric, the Wamda Research Lab (WRL) recently interviewed more than 120 entrepreneurs and experts in the region’s healthcare industry to explore this dynamic, and its implications for the Middle East and North Africa (MENA) and its entrepreneurship ecosystem.

Weak healthcare systems

MENA faces acute healthcare challenges. Supply and demand imbalances, and rising healthcare costs - driven by population growth, more elderly patients, and the prevalence of obesity and non-communicable diseases - are projected to intensify over the next 15 years. By 2030, non-communicable diseases like diabetes will account for 87 percent of all deaths in the Gulf Cooperation Council (GCC) region (Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Oman, and Qatar) and 81 percent in MENA countries outside of the GCC. In addition, experts estimate that the region will need 360,000 new hospital beds and 150,000 new physicians to meet medical needs in the region in just five years. While regional governments will expand spending on healthcare to historic highs over the next 10 years, they won’t able to fully absorb such high demand for services and tackle these issues by themselves.

These mounting challenges create a sobering picture, yet they also pave the way for smaller, more-agile players to enter the healthcare industry.

Growing entrepreneurship ecosystem and healthcare solutions

In recent years, the number of entrepreneurship support entities (venture capital funds, accelerators, and events) in MENA has increased nearly threefold - from 183 in 2010 to 463 in 2015 - and within this movement is MENA’s first generation of health entrepreneurs. General openness for digital healthcare is also increasing. Forty-eight percent of young people (ages 15 to 35) believe that information technologies should be used to improve quality, access, and costs in MENA’s healthcare systems.

Startups are capitalizing on both the maturing entrepreneurship ecosystem and growth in technology trends. Ninety-percent of the entrepreneurs we interviewed are running companies created in the last five years—with Egypt and the United Arab Emirates having the most startup health activity in MENA, followed by Palestine, Lebanon, Jordan, and Saudi Arabia—and a number of these are clearly demonstrating the potential.

One Jordanian startup, Altibbi, offers an online Arabic health portal that enables people to connect directly with top medical experts in the region. Altibbi, WebTeb (Palestine), Sohati (Lebanon), 3eesho (UAE), and other companies are aiming to help patients stay informed and healthy, and minimize complications with access to information online, ultimately reducing demand for hospital-based healthcare.

Entrepreneurs are also addressing personnel shortages in MENA’s medical facilities. Nabda Care (Egypt), for example, offers digital products for home-based diabetes care, and tools to create and utilize personal electronic health records.

Other startups have taken a role in specialized fields such as mental health and cardiology. Shezlong (Egypt), for example, is an online psychotherapy platform that facilitates private and anonymous communication between patients and therapists. And Cardio Diagnostics (USA and Lebanon) offers the world’s first HIPPA-compliant, cloud-based, cardiac management system accessible from any Internet connected device.

Collectively, these entrepreneurs and their startups also demonstrate how private-sector innovation can achieve social impact. Impact investment is rare in MENA, yet the startups we studied could spur activity in this space. The Global Impact Investment Network’s and JP Morgan’s 2015 report shows that health companies comprise a growing share of impact investment portfolios globally - at least 5 percent. MENA’s digital health startups could cultivate a competitive focus area for the region’s nascent impact investment activity. In addition to providing more affordable and scalable healthcare services, these companies could help popularize the practice of blending social impact and for-profit business agendas in MENA.

The barriers

While the growth of these enterprises seems promising, they face unique challenges.

The companies we interviewed provide services that have a direct impact on physical health; their services and products must be foolproof. A physician or patient who partners with a startup to obtain a more accurate and effective healthcare solution cannot afford mistakes. Though many startups in other industries can release beta products and iterate as they receive feedback from customers, the opportunities for prototyping-on-the-go in the healthcare industry are minimal, and the margin for error is small.  Financing to test and validate concepts early is critical - and expensive. However, 80 percent of the startups in our study cited the limited availability of capital as a barrier, particularly for the testing phase.

Finding talent is another challenge. In a 2013 WRL study of nearly 800 entrepreneurs, 60 percent said that accessing talent was a barrier, and 77 percent of healthcare entrepreneurs from our latest study couldn’t find the necessary skill sets for their teams. Entrepreneurs in this industry will need to find employees with a mix of medical expertise and certifications, and technology savvy - a unique combination that’s often hard to find in MENA.

Additional barriers include a lack of access to knowledge and research, policies tailored to the health industry, and partnerships to facilitate market entry. Each of these resources is critical to helping these companies scale and often requires maximum collaboration between disparate stakeholders such as hospitals, physicians, and policymakers. However, again with the region’s entrepreneurship ecosystem still growing, finding experts and institutions with in-depth knowledge of the healthcare industry and the ability to open business opportunities for its startups can be hard to come by. Ultimately, these companies will need tailored resources and partnerships to help them scale.

The way forward

In 2015, Dubai 100 launched a pre-accelerator program to develop digital health startups. In parallel, Jordan’s Hikma Pharmaceuticals launched a $30 million digital, health-focused corporate venture capital fund (the only one in MENA). These developments signal that select public and private sector leaders are intent on enhancing the impact of healthcare entrepreneurship in MENA.

The potential for partnerships to improve conditions within this field is high. Corporations, governments, and universities can all play distinct roles in facilitating access to the capital, knowledge, talent, and general infrastructure needed to support these companies.

A confluence of other factors will also help strengthen the entrepreneurial ecosystem as MENA’s technology readiness improves. Advancements in 3D printing, materials sciences, and quantum computing can lower the barriers to entry for healthcare entrepreneurs, while mobile health will foster methods for widespread delivery of health advancements.

While every region has its own unique dynamics and cultural fabric, lessons learned from this community could help inform healthcare startup ecosystems in other developing regions as they tackle funding for product testing, hiring highly skilled medical expertise, and building partnerships between a wide range of players.

In spite of their youth and the obstacles they face, MENA’s healthcare startups have begun to lay the foundation for other startups and supporting institutions to build a robust and dynamic community. Their growing momentum and knowledge base can help fortify the region’s healthcare systems and foster best practices for stakeholders in and outside of the region to follow.