Why startup hotspots around the world can’t match the UAE for global appeal10 October 2018 Category :
When it comes to global startup hotspots, few places come close to the UAE.
Despite strong competition from other nations, including New Zealand, Singapore, Norway and Sweden, the UAE and more than hold its own in the battle to attract the world’s top entrepreneurs.
Even countries purported to be the best in the world for entrepreneurs – Germany and Japan – would find it hard to match the extraordinary mix of dynamism, growth, tech, strategic location and government incentives that the Emirates has to offer.
Not convinced? Here are five reasons why the UAE is one of the most exciting places in the world to start and grow a business:
1. Economy and technology
The UAE is a world-renowned tech hub
While the US is among the most technologically advanced nations in the world, the UAE isn’t far behind according to research by The Fletcher School at Tufts University in Boston, USA.
Not only does the UAE boast a healthy economy, but the Emirates has particularly attractive finance options and a strong infrastructure, not to mention extensive government support for entrepreneurs. It should come as no surprise that the UAE is already home to two unicorn companies, Careem Networks and Souq.com.
Digital Planet 2017 lists the UAE, Singapore and New Zealand as the most important ‘stand out’ nations in the world.
Digital Planet 2017 lists the UAE, Singapore and New Zealand as the most important ‘stand out’ nations in the world. It describes all three countries as highly digitally advanced and exhibiting high momentum. ‘They are leaders in driving innovation, building on their existing advantages in efficient ways,’ the report notes.
The challenge these countries face is to keep innovating and generating new demand. This is where the UAE arguably nudges ahead of its closest rivals due to the massive programme of tech innovation currently being rolled-out, and the ease with which this can be done in a such a forward-thinking nation.
The UAE is the number one environment for innovation in the Arab World according to the Global Innovation Index. The culture of innovation is exemplified by new research institutions and technical centres established to promote research, creativity and innovation, such as Masdar City in Abu Dhabi, and Dubai Science Park.
2. Government support
The Emirates offers exceptional incentives for startups
An astonishing 95% of all enterprises in the UAE are startups and SMEs, setting the Emirates apart from other startup hotspots. This demonstrates the entrepreneurial nature of the economy here and the ready-made client pool of SMEs and fast-growing tech leaders. One of the key drivers of the startup economy in the UAE is the large range of incentives offered by the government to new businesses.
The Khalifa Fund for Enterprise Development, a not-for-profit development agency, is helping to spread a freelance culture, encouraging innovation, and setting up SMEs. Although this is currently aimed at nationals, it demonstrates a strong commitment to developing an entrepreneurial culture.
In Dubai, the Department of Economic Development (DED) is implementing a new package of government reforms to stimulate competitiveness and achieve sustainable economic development in Dubai. This includes proposals to allocate 20% of government tenders to SMEs and providing extra support to establish, grow and expand startups by attracting the world’s leading business incubators and accelerators with a global network of resources.
3. Global connections
Infrastructure is excellent and expanding fast
One of the biggest attractions of the UAE to entrepreneurs and investors is the well-established infrastructure, strong banking system and stable political system.
The UAE is blessed with a strategic location between the East and the West, which makes it accessible to major emerging economies.
The UAE is blessed with a strategic location between the East and the West, which makes it accessible to major emerging economies. It links shipping routes and facilitates goods’ transportation between the various regions in Middle East, Asia, Europe and Africa.
While Singapore also scores strongly on strategic location, New Zealand’s relatively isolated position is a major drawback for startups and SMEs not solely reliant on online business.
4. Safety and lifestyle
The UAE is a safe and relatively cheap for expats
Since the discovery of oil in the United Arab Emirates (UAE) more than 40 years ago, the country has undergone a profound transformation to a modern state with a high standard of living, typified by the emergence of Dubai as a major international business hub.
The UAE remains relatively cheap for expats, with Dubai and Abu Dhabi ranked 26 and 40 respectively in Mercer’s 2018 cost of living survey. Hong Kong is the most expensive city while Singapore is ranked 4. Auckland comes in at an affordable 80 in the rankings, but the New Zealand capital is currently suffering an acute housing crisis.
In terms of lifestyle, personal freedom may appear lacking in the UAE compared with western cultures. Nevertheless, the Emirates remains an extremely safe and stable place to reside, with a gloriously sunny climate and a society that prizes good manners and courtesy. In recent years there has been a concerted effort to make the UAE a more attractive place to live for foreigners. Indeed, His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and the Ruler of Dubai, has a vision to make Dubai the ‘happiest place on earth’.
5. Low taxes for businesses
Financial incentives are plentiful
The UAE provides an extremely tax favourable environment for most industries – a massive benefit to startups – compared to Singapore and New Zealand but this is not the only financial incentive. In Dubai for example, the government fees have been frozen for the next three years. Meanwhile, the Department of Economic Development (DED) is implementing a new package of government reforms including proposals to allocate government tenders to SMEs, a local production and procurement support programme, and incentives to attract the world’s leading business incubators and accelerators.
What makes the UAE so attractive to entrepreneurs compared to New Zealand, Singapore and other startup hotspots isn’t just the economy and tech changes but a host of inter-related factors, including extensive government support, a safe living environment, dynamic business culture, strong startup community, and low taxes. Combined, these factors represent an undeniably strong case for locating a new venture here.