Entrepreneurship has become one of the most dynamic forces shaping modern economies, particularly in small and open countries like Jordan. With limited natural resources, a high dependency on imports, and persistent challenges in the labor market, Jordan has increasingly turned to entrepreneurship as a strategic avenue to generate growth, create employment and enhance resilience.

 

In recent years, the country has emerged as a recognised hub for startups in the Middle East, particularly in the digital economy and ICT services, and the effects of this transformation are being felt across its macroeconomic landscape. Understanding how this entrepreneurial energy translates into measurable outcomes on Gross Domestic Product (GDP), inflation, and unemployment provides valuable insights into both the opportunities and the challenges that lie ahead.

 

The most immediate effect of entrepreneurship is on GDP. As new businesses emerge, they add value directly through the production of goods and services, while also creating spillovers that enhance productivity across the wider economy. In Jordan, the technology and digital services sector, largely fueled by entrepreneurs, has grown to become one of the country’s most important sources of value creation even though mostly still in small scale. Tech startups, often founded by young and highly educated Jordanians, are expanding into regional and global markets, providing services such as software development, outsourcing, and fintech solutions.

 

This expansion increases national income and diversifies GDP composition, reducing the country’s reliance on traditional drivers such as tourism, remittances, or aid inflows. Compared with regional peers, Jordan has performed strongly in leveraging entrepreneurship to boost its service exports. For instance, while countries in the Arabian Gulf rely heavily on energy revenues, Jordan’s entrepreneurial economy has allowed it to grow a digital export sector that resembles, in spirit if not in scale, global examples such as Estonia or Singapore.

 

The impact on inflation is more complex and indirect. Entrepreneurship can help ease inflationary pressures by increasing supply and productivity, especially when startups introduce new business models that reduce costs. In digital platforms, e-commerce, and logistics, Jordanian startups have lowered transaction costs, improved efficiency, and provided consumers with more competitive pricing. In that sense, entrepreneurship acts as a structural disinflationary force.

 

Yet there are cases where a sudden boom in entrepreneurial activity may create localized inflationary effects, especially when demand for scarce resources, such as skilled IT professionals or office space in Amman, outpaces supply. This mirrors experiences in other regional hubs where the rapid rise of startup ecosystems created talent bottlenecks and drove wages upward.

 

Globally, in countries such as India and Brazil, the startup ecosystem initially fueled wage inflation in the tech sector, before stabilizing as the labor market adjusted. In Jordan, however, the broader macroeconomic drivers of inflation remain tied more to global commodity prices and exchange rate stability, meaning that while entrepreneurship influences certain market segments, its overall effect on headline inflation is relatively modest.

 

Entrepreneurship plays a vital role in reducing unemployment in Jordan, where youth and women face particularly high joblessness. By supporting self-employment, small enterprises and startups, it generates new opportunities while fostering a culture of initiative and self-reliance. Though challenges remain, entrepreneurship is steadily emerging as a key driver of labor market improvement in Jordan.

 

Entrepreneurship offers Jordan a path to diversify its economy, reduce reliance on limited resources, and build resilience against external shocks. By fostering high-tech industries and creative services, it generates exports, attracts foreign currency, and leverages the country’s well-educated workforce. Unlike Gulf economies dependent on hydrocarbons, Jordan’s strength lies in its talent pool, which can drive innovation for regional and global markets. Similar to small nations like Ireland and Estonia, Jordan is working to build a competitive digital economy, though within tougher regional conditions.

 

Government support has been the master key to building Jordan’s entrepreneurial ecosystem. Reforms have simplified business registration, digitised services and expanded access to finance, though growth-stage funding remains limited. Incubators and accelerators, often linked to universities, provide mentorship and investor networks, while entrepreneurship is increasingly integrated into education. Compared to larger initiatives in countries like the UAE, Jordan’s system is smaller but focused, reflecting its resource limits and reliance on international partnerships.

 

Challenges remain for Jordan’s startups, many of which struggle to scale and create significant employment. Growth-stage financing is scarce, venture capital is limited compared to hubs like Dubai, and regulatory barriers such as cross-border payment restrictions persist. While Amman’s ecosystem has grown, rural areas and marginalised groups have yet to benefit. Global experience shows that lasting impact comes when governments pair strong support with scaling, export integration, and inclusiveness steps Jordan must take to ensure entrepreneurship transforms the wider economy.

 

In conclusion, the entrepreneurial economy in Jordan is already shaping GDP dynamics by creating new growth sectors, while its effect on inflation is modest and largely sectoral. The greatest potential lies in reducing unemployment, particularly among youth and women, though this depends on startups’ ability to scale and sustain job creation. Compared with regional peers, Jordan’s strength lies in its human capital and its early mover advantage in the digital economy, though it faces stiff competition from better financed ecosystems in the Gulf and Israel. Globally, the country’s trajectory resembles that of small economies that leveraged entrepreneurship to overcome resource constraints, but success will depend on sustained government support, improved access to capital, and stronger integration into global value chains. If these challenges are addressed, Jordan’s entrepreneurial economy could become not just a contributor to growth, but a cornerstone of the country’s long-term economic resilience and development.

 

Faris Al Hadidi is a Banker and Economist