While it is common knowledge that the Arabian Gulf is full of exciting investment opportunities, many don’t know that the UAE is on a high-speed journey to creating a vibrant, financially sustainable ecosystem. The UAE has taken various measures over the last few years, to cement its position as the most attractive startup hub in the region.
The boom is driven by incubators and accelerators and governmental and semi-governmental institutions that represent vital sectors in the government’s agenda, including health, education, transport, and renewable energy. Experts suggest that there has been a clear and consistent push for innovation on the part of the government in the last three years. The government’s recent progressive reforms make it very evident that the authorities are proactively pushing to make the country a desirable place for investments and new startups.
Different accelerators, funding programs, and incubators have risen across the country. The number of angels and venture capitalists is also witnessing steady growth, with a notable shift of focus from traditional sectors like real estate to innovative and information-driven tech startups. The service sector in Dubai, which contributes more than 70% to the GDP, also provides a crucial platform for new startups to be showcased and established. The number of support groups, meet-ups, and a growing number of co-working spaces in the country is evidence of a tectonic shift towards innovation and startup culture.
There are a number of factors that favor the robust growth of startups in the country. Firstly, the ease of doing business indicators of the country is very encouraging. The World Bank Ease of Doing Business Index (which considers aspects like ease of establishing a business, credit access, insolvency resolution, taxation regimes) ranks the UAE at 16th place, at par with many European countries. Secondly, a recent slew of reforms has made the country a very desirable destination for investments. Recent legislation makes it possible for foreign investors to own 100% shares of companies in mainland UAE, overturning the earlier restrictive ownership regime. Last year also saw the introduction of long-term visas granted to certain investors, entrepreneurs, inventors, and outstanding students.
In terms of potential for innovation, the country has retained the first position in the Arab world in last year’s Global Innovation Index. The country also has excellent credentials in crucial factors that affect the growth of startups: better access to capital and market, a thriving community of mentors and investment groups in conjunction with a solid, large business environment with ease of regulation, and an encouraging taxation regime. Dubai Startup Hub, the entrepreneurship initiative of the Dubai Chamber of Commerce and Industry, has recently launched eight specialized sector guides for entrepreneurs to help them launch their startups and do business in the UAE. Established in 2016, it is the first endeavor of its kind in the Middle East and North Africa region, with a mandate to emphasize the importance of public and private sector cooperation and kindling innovation and entrepreneurship as key drivers of the economy in Dubai and the UAE.
The eclectic and diverse range of customers, demands, and demography also gives rise to an encouraging climate of growth and development for innovation and startups. The UAE’s success story on the entrepreneurship and innovation front is the result of hard work and effective collaboration among government officials, the public and private sector.