The UAE launched Operation 300bn in 2021 to position itself as a global industrial centre by 2031. Bloomberg
The UAE launched Operation 300bn in 2021 to position itself as a global industrial centre by 2031. Bloomberg
The UAE launched Operation 300bn in 2021 to position itself as a global industrial centre by 2031. Bloomberg
The UAE launched Operation 300bn in 2021 to position itself as a global industrial centre by 2031. Bloomberg

Business

Economy

UAE ministry reveals new incentives to promote growth of industrial SMEs

Incentives include free technology maturity assessments to help companies accelerate technological transformation

Alkesh Sharma
Alkesh Sharma

October 05, 2023

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The UAE’s Ministry of Industry and Advanced Technology, along with its partners, has launched new incentives packages to boost industrial small and medium enterprises in the Emirates.

The initiatives align with the objectives of the national Operation 300bn strategy, which aims to transform the UAE's industrial base into a globally competitive, productive and sustainable economic engine.

As part of the incentives, which were launched at Adipec, the ministry has teamed up with companies including Maxbyte and Schneider Electric to provide free Industrial Technology Transformation Index assessments for companies.

Certified assessors from Maxbyte, a provider of Fourth Industrial Revolution solutions, will conduct 50 free ITTI assessments by mid-2024. Assessors from Schneider Electric will conduct 25 assessments.

Omar Al Suwaidi, Undersecretary of the Ministry of Industry and Advanced Technology, third left, and other officials during a meeting with Schneider Electric officials. Photo: MoIAT
Omar Al Suwaidi, Undersecretary of the Ministry of Industry and Advanced Technology, third left, and other officials during a meeting with Schneider Electric officials. Photo: MoIAT

The ministry’s new incentive packages will also provide manufacturers and SMEs with the opportunity to nominate employees for a golden visa.

Manufacturers with high maturity that achieve an ITTI score of 40 per cent to 60 per cent can nominate up to two people to receive the special visa, while companies with a score of 61 per cent and above can nominate up to five.

“SMEs are now being offered maximised support to integrate advanced technologies, enhancing productivity, competitiveness, sustainability and efficiency across the value chain,” said Sarah Al Amiri, Minister of State for Public Education and Advanced Technology.

“These partnerships aim to make manufacturing in the UAE smarter and greener in line with Operation 300bn and in support of the Make it in the Emirates initiative.”

In 2021, the UAE launched Operation 300bn to position itself as a global industrial centre by 2031.

The 10-year comprehensive road map focuses on increasing the industrial sector's contribution to gross domestic product to Dh300 billion in 2031, from Dh133 billion in 2021.

The ministry, which is leading Operation 300bn, was created in 2020 to increase the competitiveness of products made in the UAE and the industrial sector's contribution to the economy.

It is also accelerating the adoption of Fourth Industrial Revolution technologies in the industrial sector under the UAE Industry 4.0 programme.

In 2022, it supported 175 factories in developing a road map for their technological transformations, bringing the total number to 275 factories.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: October 05, 2023, 4:47 PM
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