With Dubai’s economy entering a new phase of development and the government launching initiatives to simplify and reduce the cost of doing business, the emirate is set to become an even more productive base for small- and medium-sized Enterprises, SMEs.
At the forefront of providing new opportunities for SMEs in Dubai is the Expo 2020 project, the first ever World Expo to be held in the Middle East, Africa and South Asia. With a commitment of awarding 20 percent of the value of all contracts to SMEs, Expo 2020 has so far invested AED2.4 billion in the SME sector and is set to introduce a new wave of tenders that will depend mainly on SMEs for delivery.
“Dubai offers a unique model for creating a vibrant SME sector. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, 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,” said Abdulbaset Al Janahi, CEO of Dubai SME.
Dubai SME continues to expand opportunities for its members and promote SME competitiveness by providing consultation and training, as well as facilitating partnerships with both the government and the private sector, he added. Financial support has also been a key part of Dubai’s offerings for SMEs.
Incubating promising ventures has been another key focus for the emirate’s government. Dubai SME’s Hamdan Innovation Incubator, Hi2, served more than 38 start-ups from the UAE and across the GCC in 2018.
The Dubai Plan 2021 aims to increase the SMEs GDP contribution to 45 percent by 2021. A new incentive package launched by Dubai’s Department of Finance in May this year introduced five new incentives to support SMEs and boost public-private partnerships.
Under the first incentive, SME suppliers to government agencies will be paid within 30 days instead of 90 days, to provide SMEs with additional liquidity of AED1.6 billion per annum. Under the second initiative, the value of primary insurance for SMEs has been reduced to between 1 and 3 percent instead of 2 to 5 percent.
Under the third initiative, the final insurance rate, known as “performance insurance,” has been cut from 10 percent to five percent on all supplies. The fourth initiative calls for five percent of government capital projects to be allocated to SMEs. The fifth initiative includes allocating AED1 billion to public-private projects.
In the first set of incentives unveiled last year, Dubai had introduced several measures to reduce costs and boost business confidence and is also setting up new dedicated SME clusters focused on entrepreneurial innovation. Dubai SME along with Meraas and the Department of the Economic Development also recently signed a partnership to launch Al Seef SME District, an innovation hub within Al Seef.
With several new initiatives being rolled out to promote entrepreneurial growth, over the next few years, Dubai could well witness a remarkable new phase in SME growth and innovation.