Two years ago, Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai issued a powerful challenge to the whole country: innovate or perish. In the spirit of that message, and as the region seeks a more diversified and sustainable economy, SMEs have to be placed at centre stage as the main driver of innovation for a sustainable and prosperous future.
In the UAE, SMEs dominate, making up 95 per cent of all enterprises, employing over 86 per cent of the private sector workforce and contributing over 60 per cent to the country's gross domestic product, according to Ministry of Economy figures. More broadly, SMEs are the real engine for economic growth in the GCC as the second biggest contributor to the GDP after the oil and gas sector, accounting for 30 per cent GDP in the UAE and 22 per cent GDP in Saud Arabia, serving as a platform for job creation and innovation.
Globally, SMEs accounted for more than half of all formal jobs worldwide in 2016, and account for 97% of all firms in the economic powerhouse that is China. More importantly, SME’s are the main source of innovation. In the USA, in 2012, small businesses produced 13 times more patents than Fortune 100 firms.
SMEs are an engine of growth, creativity, and innovation and deserve to be treated as such.
Yet the Mena region is still not geared to enable SMEs to start, grow and flourish. The costs for starting up are high, paperwork is cumbersome, finance is hard to come by, exit options for investors are limited, and the cost of failure is high. For example, while the average share of bank loans to SMEs (of total loans) is more than 26 per cent in high-income OECD countries, it is only 2 per cent in the GCC countries.
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Read more:
Mumzworld raises $20 million as it accelerates growth in Saudi Arabia
Generation start-up: The entrepreneur nurturing Baby Arabia one step at a time
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When it comes to starting a business, in a place like Estonia one can start a company, open a bank account, and start working within one day, and all online (via e-Estonia), without ever having to reside in Estonia or rent any real estate. Australia and New Zealand offer SME growth grants to help local startups scale and sell outside their own country, and the UK government mandated that over 30 per cent of government technology be contracted with local SME suppliers.
Despite the leadership’s focus on growth, diversification and innovation, and despite decades of calls for encouraging entrepreneurship, the current eco-system is still geared towards large firms, merchants and traders.
Current government structures and mindsets are designed to “think big” – to cater for large enterprises, build large office spaces, rent large warehouses and attract large investors. The needs of small businesses have been wrapped under the overall blanket of “doing business” which the World Bank famously reports on.
But the world has changed, and our definition and perception of small has to change with it.
Current systems are not agile enough to deal with a team of 11 people developing a new app, working mostly from a shared space (or a coffee shop) and with a wide array of degrees (or none at all). This kind of team needs a very low-cost base, a quick license to operate, a finance system that enables them and an eco-system where they can not only raise funding, but can allow for clear and professional exit options. This was exactly the size and shape of the Instagram team when it was sold for around one billion US dollars in 2011.
Today, that Instagram team would have struggled to achieve that success in our region. They would have needed a fairly expensive license, two- to three-year visa costs, and office space allocation (which they often do not need). Banks would demand fees for a simple service such as online access, and three years of audited statements before they consider any credit facility.
UAE has seen a couple of unicorns in the last few years – like Souq.com and Careem – and that added fuel to the bottom-up startup movement that has been growing in the region over the past decade. Today, the UAE can capitalize on this local energy and regional potential, and take a regional -even global- lead, but this eco-system needs a champion. We need a Minister for Entrepreneurship.
Policies to support entrepreneurs require coordination between many Ministries (like Labor, Economy, and Education), local government Departments (like Economy and Community Development), and various private sector stakeholders (like banks and venture capitalists). It is a complex system that needs to be carefully created and curated. This champion will also work with “future-oriented” ministers like Youth, Artificial Intelligence, and Science, as well as sector-specific portfolios like Health, Climate Change and Environment, and Food Security.
The future of the GCC’s economies will be underpinned by entrepreneurship; the cornerstone of any economy that aims to diversify from oil and increase private sector participation from a young workforce – over 60 per cent of the region’s population is under the age of 29, a real population dividend that must be harnessed.
While the UAE is aiming to go to Mars in 2021, it should also aim the undisputed regional hub for startups serving a market of over 3 billion people between Middle East, South East Asia and Africa. It is time for the UAE to “think small”. The Ministerial post for Entrepreneurship will be no small matter for the future of the UAE’s economy.
Yasar Jarrar is Vice Chair of the World Economic Forums Global Agenda Council on the Future of Government, and Senior Fellow at the MasterCard Center for Inclusive Growth (USA).
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
The squad traveling to Brazil:
Faisal Al Ketbi, Ibrahim Al Hosani, Khalfan Humaid Balhol, Khalifa Saeed Al Suwaidi, Mubarak Basharhil, Obaid Salem Al Nuaimi, Saeed Juma Al Mazrouei, Saoud Abdulla Al Hammadi, Taleb Al Kirbi, Yahia Mansour Al Hammadi, Zayed Al Kaabi, Zayed Saif Al Mansoori, Saaid Haj Hamdou, Hamad Saeed Al Nuaimi. Coaches Roberto Lima and Alex Paz.
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
India cancels school-leaving examinations
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Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
The view from The National
WTL%20SCHEDULE
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BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Fight card
1. Bantamweight: Victor Nunes (BRA) v Siyovush Gulmamadov (TJK)
2. Featherweight: Hussein Salim (IRQ) v Shakhriyor Juraev (UZB)
3. Catchweight 80kg: Rashed Dawood (UAE) v Khamza Yamadaev (RUS)
4. Lightweight: Ho Taek-oh (KOR) v Ronald Girones (CUB)
5. Lightweight: Arthur Zaynukov (RUS) v Damien Lapilus (FRA)
6. Bantamweight: Vinicius de Oliveira (BRA) v Furkatbek Yokubov (RUS)
7. Featherweight: Movlid Khaybulaev (RUS) v Zaka Fatullazade (AZE)
8. Flyweight: Shannon Ross (TUR) v Donovon Freelow (USA)
9. Lightweight: Mohammad Yahya (UAE) v Dan Collins (GBR)
10. Catchweight 73kg: Islam Mamedov (RUS) v Martun Mezhulmyan (ARM)
11. Bantamweight World title: Jaures Dea (CAM) v Xavier Alaoui (MAR)
12. Flyweight World title: Manon Fiorot (FRA) v Gabriela Campo (ARG)
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
Results
2.15pm: Maiden (PA) Dh40,000 1,700m; Winner: AF Arrab, Antonio Fresu (jockey), Ernst Oertel (trainer).
2.45pm: Maiden (PA) Dh40,000 1,700m; Winner: AF Mahaleel, Antonio Fresu, Ernst Oertel.
3.15pm: Sheikh Ahmed bin Rashid Al Maktoum handicap (TB) Dh200,000 2,000m; Winner: Dolmen, Richard Mullen, Satish Seemar.
3.45pm: Handicap (PA) Dh40,000 1,200m; Winner: Amang Alawda, Sandro Paiva, Bakhit Al Ketbi.
4.15pm: The Crown Prince of Sharjah Cup Prestige (PA) Dh200,000 1,200m; Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel.
4.45pm: Handicap (PA) Dh40,000 2,000m; Winner: Al Jazi, Jesus Rosales, Eric Lemartinel.
COMPANY%20PROFILE%20
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5