Dubai Internet City (DIC) is targeting 10 per cent annual growth in the number of new businesses in 2018 and beyond, as it prepares to launch the first phase of a 1.8 million square feet expansion project later this year, its executive director said.
The free zone for technology and media companies expects growth to be driven by start-ups, as DIC pushes ahead with its aim of becoming the "Silicon Valley" of the Middle East and North Africa (Mena), Ammar Al Malik told The National.
“When we started 18 years ago, the objective was to attract global multinationals to establish a presence at DIC and help anchor Dubai as a technology hub,” he said. “In the last few years, the trend has been changing and we are seeing a lot more start-ups take root in the ecosystem."
The vision of the Sheikh Mohammed bin Rashid, the Vice President and Ruler of Dubai, of creating a "Silicon Valley for the Middle East is starting to become a reality”, Mr Al Malik noted.
Increasing the contribution of small-to-medium-sized businesses (SMEs) to the Dubai economy is a key plank of the national growth strategy. SMEs account for less than 40 per cent of the emirate’s total gross domestic product (GDP), but the Dubai SME 2021 Strategic Plan aims to increase this to 45 per cent by 2021.
Approximately 60 per cent of the 1,600 DIC-registered companies are start-ups or SMEs, and the remaining 40 per cent are multinationals. The top growth sectors are e-commerce, cyber security, cloud services, computer gaming, blockchain and artificial intelligence (AI), he said.
Examples of homegrown start-ups are ride-hailing app Careem, fintech firm AtCash and Wrapupp, an AI-driven app which was acquired by Silicon Valley-based firm Voicera for an undisclosed sum last month.
He expects the proportion of start-ups to rise to 70 to 80 per cent in the years ahead as DIC intensifies efforts to support entrepreneurs and foster innovation.
“The entrepreneurship culture is growing very rapidly and because of that we hope and expect the split will grow,” Mr Al Malik said. The Mena region has a large number of initiatives to support entrepreneurship, he added, citing Dubai SME membership network and Abu Dhabi’s Khalifa Fund as examples in the UAE.
Many multinational technology firms housed at DIC – including Cisco, Microsoft, Google, 3N, Accenture, SAP and Oracle – have created innovation hubs to stimulate a start-up ecosystem that also fuels their own research and development strategies.
Canon, which launched its start-up incubator last month, is the latest DIC firm to join the ranks.
Although, the number of start-ups is on the rise, Mr Al Malik said, large global companies will continue to play a “significant” role in the development of the free zone.
A key driver of growth will be DIC’s planned expansion through the Innovation Hub real estate project, comprising 10 new office buildings with retail spaces.
The first phase of two buildings spanning 450,000 sq ft, which according to DIC’s website was scheduled to be completed last year, will now be completed in the third quarter of 2018 with offices opening from 2019, Mr Al Malik said. The whole scheme will finish in around five to seven years depending on demand from companies within and outside the DIC.
The free zone will start leasing phase-one units this month. Once complete, the Innovation Hub will accommodate an additional 15,000 people in the technology and ICT sector alone, pushing DIC’s capacity in the sector to more than 30,000 people.