A new innovation committee will offer funding to help SMEs develop and promote new ideas as part of the UAE’s drive to become one of the world’s 10 most innovative countries by 2021.
SMEs can now apply to a 15-member committee that will select companies with the best projects across 15 sectors to provide them with financing, overseas promotions, access to major exhibitions and lower business costs amongst other incentives, conveyed Adeeb Alafeefi, director of the National Programs for Small and Medium Enterprises at the Ministry of Economy, to reporters on Wednesday.
"The funding will be available to help young companies turn their ideas from a business plan, to a prototype, to a reality in the market," Mr Alafeefi said following the committee's meeting on Wednesday. "The first priority will be to Emirati-owned businesses, and then to those owned by Emirati partners with foreigners."
The step is part of the National Programme for Supporting Young Innovative Companies that the UAE launched last year to support start-ups to innovate and build up a culture of creativity. Ultimately the aim is to raise the UAE’s ranking on the Global Innovation Index (GII). It is seeking to develop its SME sector, attract talent and foster innovation as part of a broader push to diversify the economy away from oil.
SMEs account for 95 per cent of registered businesses in the UAE and employ a little more than half of the entire labour force in the country. These businesses contribute 47 per cent of the UAE's gross domestic product. The aim is to increase this contribution to 70 per cent by 2021.
Funding for the innovation programme will be available through the Dh 22 billion Mohammed Bin Rashid Innovation Fund (MBRIF) launched last year to support start-ups and an additional Dh500 million through the committee members, Mr Alafeefi said.
SMEs from 15 approved sectors can apply including renewable energy, industries, health, education, transport and logistics. Ideas from university research, patents and prototypes will be considered.
Selected innovators will get incentives such as reduced cost of employing expats of Dh300 per year compared to Dh 5000 to Dh7000 per year currently, he said. They will also be eligible for the UAE federal government's purchase tenders, 10 per cent of which are reserved for SMEs, he said.