The role of investment banks in moving the wheel of the economy

In the era of the new industrial revolution in the

Field of artificial intelligence and technology, the growth of emerging projects has led to a major change in plans aimed at economic development and the promotion of capital in developing and developed countries.  And those emerging projects are closely related to entrepreneurship, which have their role in applying scientific theories and innovations to real applications and tools that people can use on the ground.  When entrepreneurs devise an appropriate way to harness scientific innovations and inventions into value-added products and services, they will have the opportunity to establish the necessary companies and factories to provide these modern services and products, and this will lead to a significant economic impact on countries.  The formation of capital and emerging companies will lead to the creation of new markets with new products, services and technological innovations that will bring investments to the state from abroad, which will lead to an increase in the growth of the national income.

But the real question today is how can countries enhance their ability to stimulate the growth of these markets and how can they motivate entrepreneurs and investors to establish companies that provide products and services to the outside world to contribute to the growth of the economic wheel in the country?  The answer to that question lies in several matters, the most important of which is the activity of investment banks, which act as a link between entrepreneurs and investors.

What are investment banks?

 Before explaining the role of investment banks in stimulating the growth of modern markets and new innovations, I want to give an overview of investment banks in the first place.  Investment banks are financial institutions specialized in providing financial advice and services in the business of mergers and acquisitions of companies, issuing bonds, and converting private companies into public ones by managing initial public offerings.  Unlike commercial and consumer banks, investment banks do not accept deposits because they deal with companies and investors.

 One of the most important roles that investment banks play in their activities is to transform small entrepreneurial companies into large joint stock companies by offering them in the financial markets to provide an opportunity for investors and individuals to invest in these companies.  In simple terms, we can say that investment banks act as a link between investors and emerging and large companies.  Due to the pivotal role played by this type of bank, investment banks are highly appreciated in the world of emerging and pioneering companies that need financing. Without investment banks, it will be very difficult for those companies to obtain the funds they need to develop their innovations, services and products.

Investment banks have a great impact on motivating entrepreneurs to establish companies that provide services and innovations that have a tangible impact on the ground.  This is because when entrepreneurs establish emerging companies capable of producing prototypes of these effective innovations and services, investment banks will act as intermediaries between those companies and investors who will finance this type of entrepreneurial companies in order to expand and increase their production and competition in the financial markets and their cash revenues.  The presence of a link between the owners of start-up companies and entrepreneurs on the one hand, and owners of cash and investors on the other hand, will contribute to motivating entrepreneurs and investors to establish companies that provide products and services to the outside world to contribute to the growth of the economic wheel in the country.  This will also stimulate growth in the financial markets in the country. When startups expand and become advanced, they will be able to sell their products and services to various countries of the world, and this will attract foreign funds and hard currency to the country, leading to the development of its economic growth

Leap software companies

 Most of the major software companies in the world of technology such as Uber, Google, Microsoft, Oracle, were small startups, and most of these companies were also set up by entrepreneurs and university students.  The most important reason that led these companies to success and to achieve billions of dollars in revenue annually is the presence of investment banks in the countries in which they resided, which provided them with the opportunity to expand and compete by attracting and bringing in investors to finance their projects, innovations and services.

 Emerging and entrepreneurial companies in the United States contribute more than 40% of its total national economy, 60% in China, and 70% in Hong Kong. Therefore, entrepreneurship, at the present time, is an important tributary for any economic system.  It must be an important part, if not the most important, of any economic plan developed by developing countries to develop their competitiveness and financial markets to develop.  For this reason, the importance of investment banks and their effective role in developing small companies and making them pioneer companies with great economic value that stimulates economic growth must be taken into consideration.  The presence of investment banks that are able to establish a link between investors and owners of emerging entrepreneurial projects is essential for the development of these companies and increasing their competition with the outside world.  Therefore, developing and Arab countries must improve their ability to establish and bring investment banks from abroad to their lands in order to take advantage of the era of the new industrial revolution in the field of artificial intelligence and technology.