The UAE’s new initiatives to drive economic growth, support family-owned businesses, start-ups and small and medium enterprises have been welcomed by economists who say supporting SMEs is essential to the future prosperity of the country.
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said the new programmes, under the Ministry of Economy, include an accelerator for family-owned businesses as well as an economic research institute and a global investment conference.
“Supporting SMEs is essential for fostering innovation in an economy and the future leading companies, especially in rapidly emerging sectors, which will most likely be SMEs today or not even conceived,” Scott Livermore, ICAEW economic advisor and chief economist at Oxford Economics told Arabian Business.
“Creating an environment where these entities can flourish will be critical for achieving success in key sectors that are intended to contribute to the UAE’s growth and diversification objectives,” he added.
The UAE has set economic diversification targets as it works to wean itself off a dependence on oil, and encouraging private sector development is key among its efforts. The country’s ease of doing business rank is 16th, according to the World Bank.
“The economy is changing at an ever-accelerating pace, necessitating a flexible and adaptive economic policy,” Omar Al-Ubaydli director of research at Derasat told Arabian Business.
Sheikh Mohammed on Wednesday said he was keen to “catapult Dubai's economy to new heights” and is looking to the next 50 years as the city looks to catalyse post-pandemic economic transformation and reinforce its position as a global business hub.
“Knowing how to adapt one's policy requires professional tracking and analysis of the economy, and only the dedicated corps of a research institute can provide that. Therefore, establishing a research entity is a critical element of the new policies, despite nominally being a low key development,” said Al-Ubaydli.
The economic research institute, UAE Growth Lab, will collaborate with four universities: UAE University, Zayed University, American University of Sharjah, and New York University Abu Dhabi.
“An environment where entrepreneurs are supported and encouraged to innovate will have a positive impact on long-run growth and allow the economy to adapt to changing technologies and market conditions,” Livermore said.
In the UAE, SMEs are largely optimistic about the future, with 88 percent saying the future looks bright, compared to the regional average of 81 percent, research from Mastercard shows.
Source: https://www.arabianbusiness.com/politics-economics/465479-sme-support-in-uae-essential-for-fostering-innovation