- Country leads MENA in developing innovation & technology-driven SMEs
- 91 per cent of UAE Millennials start their own business or plan to open one
- Futuristic projects focused on clean tech, renewable energy, smart technologies and security
The UAE is primed for a new wave of small- and medium-sized enterprises (SME) development led by innovation and technology, according to a new report titled ‘Charting the Future of SMEs in the UAE’ launched on the sidelines of the SME Beyond Borders 2017 conference held under the theme ‘SME4X’ today (November 9, 2017) at the JW Marriott Marquis Hotel in Dubai. The report was published by Orient Planet Research in partnership with SME Advisor Middle East and Utalenta.com.
The Arab Gulf nation has one of the most robust SMEs in the region, which has sprung from strong trading and retail markets. Amidst a rapidly changing economic landscape, the sector faces the need to address future directions to sustain growth. The report examines domestic strengths which can be built on to support SMEs and explore the impact of the ongoing digital revolution and its attractiveness to the present young generation. The report noted that while financing is a key factor, SMEs also face the need to continuously innovate and adapt to changing markets particularly in an era where technology has become a prime factor in defining the direction of the global economy.
Nidal Abou Zaki, Managing Director, Orient Planet Group, said: “The UAE’s SME sector is in a particular juncture where it needs to address the new challenges and opportunities of the digital age. We find it important to understand SMEs’ needs beyond the financial aspects of the business, which is often cited as the most common concern, to be able to contribute to economic growth. While financing is essential, SMEs and business developers need to look at a multitude of factors, including acknowledging the main composition of businesses since the country began diversifying from oil as its main source of revenue. The need to transition to a post-oil era in the GCC impels SMEs to capitalize on new growth markets such as digital technology, innovation and the knowledge-based economy.”
Digital technology is fundamentally changing the way people live and the UAE is at the forefront in implementing the latest trends in the industry – from drones to artificial intelligence, the Internet of Things, mobile applications, and virtual reality, among others. Further, the report highlighted that the country’s young tech-savvy population spells a huge opportunity for SMEs to create a new entrepreneurial landscape attuned to the country’s ambition to become a global leader in innovation, which is central to the achievement of a knowledge-based economy. This is supported by other studies which present UAE Millennials as among the most active in the region in terms of business development, with 91 per cent either already having started their own business or looking to start one in the nearest future.
Abou Zaki added: “There is a strong drive among young professionals to become independent and run their own business. We found that this is quite high in the country, which remains one of the most attractive in terms of setting up a business in the region. This is evident in the growth of many e-commerce businesses in recent years.”
Gina O’Hara Larsen, Co-founder and COO, CPI Business, noted: “We are producing this report in collaboration with Orient Planet Research as part of our efforts to address burning questions within the sector such as: where will our business be four years from now; what technologies would affect us; will our leadership style evolve; will our employees be working remotely; and so on. Through our partnership with Orient Planet Research and Utalenta.com, we share their analogies of the future of the world, the city and their respective industries. We are confident that the report will help inform local businesses on the opportunities that lie ahead.”
The rise of internet-based businesses particularly e-commerce retail such as Souq.com and other profitable online enterprises has inspired many young entrepreneurs to capitalize on the widespread availability of mobile devices coupled with a strong telecommunications infrastructure. Engaging entrepreneurship through social media is also prevalent among many startups in the country, capitalizing on the popularity of social media platforms such as Facebook, Twitter and Instagram, the report explained.
The report found that futuristic projects and initiatives centered on clean technologies, renewable energy, smart technologies and security are among the key areas that attract startups, the first stage of SME development.
“There is no doubt that the UAE is set on moving towards a knowledge-based economy and so therefore expected trends within the next five years would be focused on the sectors that bring about knowledge creation and management. Imagining the future and harnessing a culture of creativity are certainly on the agenda for the development of a new set of SMEs in the country. The foundation is set on knowledge and innovation, and therefore, the platform is open for all that have the ingenuity and dedication towards building a better society,” the report concluded.