How Dubai is continuing to become the leading hub in MENA for SME growth
Dubai’s booming economy has historically provided a productive environment for small and medium enterprises (SMEs) to set up and accelerate their business. The emirate’s economy is known to be dynamic and diversified. Its solid real estate, construction, tourism, hospitality, logistics, finance and technology sectors have made Dubai one of the most attractive cities for small and medium business entrepreneurs.
The city’s economy has recently entered a new stage of development which involves gigantic projects and government initiatives aiming at reducing the cost of doing business.
One of the key actors in launching new initiatives for SMEs in Dubai is the Expo 2020 project. The first ever World Expo which will be held inMiddle East, Africa and South Asia is set to provide even further opportunities for SMEs. Expo 2020 has invested AED 2.4 billion in the SME sector and is committed to award 20% of the value of all contracts to SMEs.
Key ecosystem initiatives
The agency of the Department of Economic Development has been a key player in the support of SMEs. Last year the agency saw an important increase in the amount of local founders looking for assistance. It provided further support to 4,227 local founders in 2018, an increase of 34% from 2017 and increased the value of its incentives and facilities by 63.4% in just one year - reaching AED 101 million in 2018.
Additionally, almost 6,000 entrepreneurs enjoyed from Dubai SME’s services, training and development programmes. This is an incredible 163% increased compared to 2017. Moreover, 1,175 companies were launched in Dubai in 2018 due to the increasing support of Dubai SME.
Dubai SME’s CEO, Abdulbaset Al Janahi, says “Since its inception in 2002, Dubai SME has adopted a clear strategy to translate the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to enable citizens to enhance their participation in economic development”.
He further adds "The UAE and its leadership are committed to supporting entrepreneurs and creating a supportive economic climate for small and medium enterprises. Dubai offers a unique model for creating a vibrant SME sector. HH Sheikh Mohammed has set ambitious development goals in the 50 Year Charter including the establishment of the world’s first virtual trade zone targeting 100,000 companies, as well as the transformation of universities into free zones in order to promote economic growth and innovation. These goals offer exceptional opportunities for promising small and medium enterprises”.
Dubai SME is continuously expanding opportunities and promoting SME competitiveness through dedicated training or facilitating partnerships between the government and private sector. The organisation has been supported by its financial arm, the Mohammed Bin Rashid Fund (MBRF) on 18 projects, the equivalent of AED14 million in 2018.
More UAE-based trade finance banks have seen opportunities in supporting small businesses as Expo 2020 approaches. Emirates NBD recently announced its new banking package for local SMEs and startups that are joining Expo 2020. The offer includes preferential pricing and privileges on transactions, loans and much more.
Finally, another key focus for Dubai has been to incubate promising businesses. The Hamdan Innovation Incubator (Hi2) helped over 38 startups from across the GCC in 2018. The programme provides startup founders with support on idea development and growth strategies.
The Dubai Plan 2021 targets a growth of SMEs GDP contribution to 45% by 2021. In order to achieve this goal, the government has announced initiatives aimed at stimulating the boost of SMEs, which make up for 95% of all businesses in Dubai.
Last May, Dubai’s Department of Finance (DOF) has introduced five new incentives to support SMEs and boost public-private partnerships. One of the initiatives is expected to provide SMEs with extra liquidity of AED1.6 billion per annum.
Dubai as the SME hub
Over the last few years, Dubai has become the SME hotspot for new niche industries. The fintech sector is a perfect example of this. Many fintech startups have been supported by initiatives such as experimental licences, collaborative workspaces, and more from the Dubai International Financial Centre (DIFC).
The Fintech Hive is a hub which is playing a vital role in shaping the future of the region’s financial industry. Dubai SME along with Meraas and the Department of the Economic Development (DED) recently signed a partnership to launch Al Seef SME District innovation hub. The hub offers unique spaces for emerging ventures from the design, fashion, F&B and information technology sectors.
With an endless track record of successful and engaging initiatives, Dubai is destined to position itself as a leading hub for SME activity in the MENA region.