The prevailing view of university education in most countries is that it produces employees. But in other places that have chosen to shape the future, the university has begun to transform into something fundamentally different: a factory for companies, not employees. The gap between the two models is not just a difference in curriculum or funding, but a gap in the very definition of the university’s purpose.
For decades, higher education in the Arab region has been based on an unwritten social contract: get a degree, get a job, enjoy stability.A government job was the ultimate reward, and the university was essentially an infrastructure that supplied the public sector with employees.
The entire university culture, curriculum, and success metrics were built around this contract. This contract has practically collapsed. Government jobs can no longer accommodate the number of graduates, and the private sector demands different skills than those produced by universities.
Yet, the university model has not evolved to reflect this new reality. We are still operating a factory designed to produce employees for a non-existent economy, and then we wonder why there is such a glaring gap between university outputs and the demands of local or regional markets.
The modern economy addresses this ambiguity in several ways, one of which is through startups, which need people who can navigate uncertainty, make decisions with minimal information, act quickly, and treat failure as information, not a stigma. In contrast, the Arab university teaches the exact opposite: rote memorization and indoctrination, risk aversion, subservience to authority, and a definition of success as a grade on an exam with no real-world impact.
An entrepreneurial culture cannot be built within a system that punishes wrong answers instead of considering them part of learning. A student who is taught throughout their years that a mistake is a failure will carry this lesson with them when they consider starting a company, and will hesitate. Entrepreneurship, at its core, is a long series of corrected mistakes.
Many universities worldwide have recognized the changing rules of the global economy and have taken entrepreneurial initiatives in this context. The Massachusetts Institute of Technology (MIT) is linked to several investment funds to finance its students’ projects, including the E14 Fund and The Engine. Oxford University has Oxford Science Enterprises, which reviews dozens of investment opportunities annually from its graduates, in addition to Oxonian Ventures, which invests in its alumni companies.
This is not limited to major universities; many smaller universities have partnered to establish joint funds when their individual size was insufficient for a separate fund.
When a university operates a real investment fund, the equation changes completely. The university then has a direct financial stake in the success of its students, transforming from a degree-granting institution into a business-creating one.
The student receives patient capital from an institution that knows and trusts them, deliberately blurring the lines between academic research and commercial ventures. From this fusion, innovation is born.
It might be argued that this is a Western model unsuitable for our reality. However, the answer lies within the region itself.King Abdullah University of Science and Technology (KAUST) in Saudi Arabia has built a genuine investment arm that invests in startups stemming from its research and student work, transforming its ecosystem into a real engine for producing deep-tech companies, some of which have reached global markets.
This model is not a Western formula difficult to implement, but rather an experiment that has proven successful in the region, within a local development vision.
In Jordan, some universities have launched business incubators and accelerators; however, a crucial distinction often overlooked is necessary here. An incubator, an accelerator, and a venture capital fund (VC) are not synonymous, but rather sequential links in a single chain. An incubator nurtures an idea in its early stages, often with minimal funding.
An accelerator propels the fledgling company by injecting relatively small amounts of capital to make it ready for investment. A venture capital fund, on the other hand, operates at a completely different level, with much larger sums and the ability to support the company through successive funding rounds. The incubator feeds the accelerator, and the accelerator feeds the fund, and when the final link is missing, the promising company graduates into oblivion.
This distinction is key to understanding the dilemma. What Jordanian universities have launched so far falls within the initial links of the chain: incubation, acceleration, training, and preparation. These are undoubtedly necessary links, but they build the early and cheaper part of the ladder and then stop at the point where the more difficult and crucial part begins.
The companies graduating from these programs find themselves facing a funding gap because the crucial link that should be nurturing, funding, and supporting their growth is absent from the university system.
The question, then, is not: Why don’t our universities have incubators? They already do. Rather, where is the final link? Where is the university investment fund that transforms the incubated idea into a company capable of growth and competition? The gap isn’t in the absence of infrastructure, but in its incompleteness.
The necessary components for building what’s missing are present: skilled young technical professionals, specialized universities, and an economic size that allows for experimentation without enormous risks. What’s lacking isn’t the capacity, but the will.
Perhaps the biggest obstacle to building this link is the required capital, a real challenge for a single university in a small economy. But the solution lies in the experiment I mentioned earlier: nothing prevents several local or regional universities from jointly establishing a single investment fund, pooling their limited resources to create a financially significant and competitive entity.
What each one cannot achieve individually, they can accomplish collectively. A single regional university fund may be stronger and more sustainable than ten scattered, smaller funds, better equipped to capture promising companies before they migrate in search of funding elsewhere.
What applies to Jordan applies to most universities in the region. The majority still operate as mere employee factories, while KAUST’s experience has quietly demonstrated that another model is possible here, not just in Silicon Valley.
A university that merely graduates job seekers in the age of artificial intelligence and the knowledge economy misses its true role as an economic engine, transforming from a catalyst for growth into a link in a long waiting list.
This transformation doesn’t require a miracle, but rather a redefinition: for the university to see itself not as a degree-granting institution, but as one that creates companies, owns shares in them, and profits from their success.
When this definition changes, everything else will change: curricula, incentives, the professor-student relationship, and the university’s relationship with capital. Until this happens, our universities will continue to produce, with perfect accuracy, what they were originally designed to produce: employees for a shrinking economy, not founders of a growing one.
