From humble beginnings come industry giants

The Life: Strong investments in human capital will help UAE grow as an innovation hub, say experts.

Daniela Benavente of Insead says innovation is not restricted to inventions and research and development. Ravindranath K / The National

Steve Jobs started dreaming of a technology career as a teenager tinkering in his father's garage in Mountain View, California, at the heart of what would come to be known as Silicon Valley.

A decade later, he and two colleagues, Steve Wozniak and Ron Wayne, launched Apple, a company that would revolutionise electronic technology and daily life.

From humble beginnings great ideas are born. And the UAE needs to remember the story of the late Jobs as a way of creating the next wave of innovators and young entrepreneurs.

"While in many countries such as the United States you can build a company like Apple or Google starting from your garage, in the UAE you need to first spend a large amount of cash renting office space, fitting it, getting fire and safety inspections, etc, just to be able to apply for a trade licence," says Ahmad Zahran, the founder and chief executive of the Dubai start-up Infinitec which makes plug-in Wi-Fi antennas that resemble USB flash drives. "That's a high cost that most entrepreneurs and young innovators can't afford."

While things are changing, a World Bank report this year put the UAE in 42nd spot in terms of the ease of starting a business.

But the bright spot is that the Emirates "is continuing to invest in human capital improvement, and that will make innovation possible" said Karim Sabbagh, a senior vice president at the consultancy Booz & Company in Dubai.

He was speaking in Abu Dhabi last week on the sidelines of the international business school Insead's announcement of its fifth global innovation index (GII) in collaboration with the United Nations agency the World Intellectual Property Organization.

The UAE slipped three spots in the index to 37th in overall innovation this year and lags behind most high-income countries in knowledge and technology output. Qatar leads the Middle East and the North Africaat 33rd in the rankings.

But the Emirates rates as high as 16th in knowledge-intensive employment and collaboration between public and private sectors in creating business clusters.

High-income countries from Europe lead the index, with Switzerland and Sweden taking the top two spots. Singapore is third, with the US 10th.

"Innovation is not restricted to inventions and research and development," said Daniela Benavente, who was one of the lead researchers at GII at Insead.

"Most experts these days agree that the commercial introduction of innovations developed elsewhere constitutes an innovation," she said.

A decade ago, basic services such as internet and telecommunications were rudimentary. And education reform began about five years ago.

"For South Korea, it took a generation to take the benefits of the reforms," said Mr Sabbagh. "We have to be patient."

The UAE continues strong investments in political, regulatory, educational and business environments, but weaknesses lie in knowledge and technology outputs, such as patents or scientific papers. Short-term measures can improve the overall infrastructure to encourage innovations, measures such as "opening the domain of funding to nationals and non-nationals", said Mr Sabbagh.

More funding sources, easing of high start-up costs and introducing entrepreneur visas are some of the incentives that could improve the situation.

"The venture capital community is rather weak in the UAE," said Amir-Esmaeil Bozorgzadeh, the managing partner of Conovi, which funds online start-ups in Dubai. He expects to launch an online venture, Chimigi, this month.

"People mistake angel investors quite a bit with venture capitals; this is often an under-the-radar form of support system for infant ideas that is hardly scaleable."