Empowering SMEs is key to raising Abu Dhabi’s economic competitiveness

Entrepreneurs during an exhibition in Abu Dhabi for Middle Eastern SMEs. Mona Al-Marzooqi for The National

The Abu Dhabi emirate continues to make steady progress in diversifying its economy, fostering entrepreneurship and empowering small and medium-sized enterprises, all in alignment with the leadership’s vision to enhance economic competitiveness and future readiness.

By the middle of last year, the total number of registered companies in the UAE reached more than 1 million, representing an increase of 152 per cent compared to early 2020. SMEs account for more than 95 per cent of all businesses and employ about 86 per cent of the private sector workforce. As of the end of 2024, the UAE’s non-oil gross domestic product reached about Dh1.342 trillion ($365.4 billion), representing 75.5 per cent of the country’s total GDP. In Abu Dhabi alone, non-oil sectors contributed 55.2 per cent to the emirate’s GDP in the second quarter of last year.

Within this evolving landscape, enterprise development efforts in Abu Dhabi continue to focus on enabling SMEs through a combination of institutional programmes and collaboration with both public and private sectors. One such initiative is the Abu Dhabi SME Champions programme that reflects the emirate’s broader strategy to enhance SME participation in the economy. The programme aims to bridge gaps in access to finance, procurement and skill development by connecting smaller enterprises with opportunities and resources, many of which are facilitated through government platforms such as Tamm.

Abu Dhabi continues to solidify its position as a global hub for talent, business and investment. With a future-ready economy, progressive policies and world-class infrastructure, the emirate is shaping the future of global business.

The recently released Global Startup Ecosystem Report highlights Abu Dhabi’s growing role in the global innovation economy.

Based on an analysis of more than five million companies across 350-plus ecosystems worldwide, the emirate advanced to the 51-60 ranking range in the Emerging Ecosystem category, rising from the 61-70 range last year. Regionally, the emirate secured the third spot in the Mena Emerging Ecosystem, followed by Dubai and Riyadh, both of which have shown strong startup momentum and international visibility. Abu Dhabi secured third spot in the performance category, which measures startup value through exits and funding.

Abu Dhabi ranked fourth in the knowledge category, which measures the number of research patents; fifth in both the funding capacity and talent and experience categories. The emirate also finished in the top 10 in the Bang for Buck Awards.

One of Abu Dhabi’s standout achievements this year for the GSER edition is the funding success of its Hub71 ecosystem, through which startups raised a record $2.17 billion. This capital inflow has significantly boosted innovation and accelerated growth.

Promoting innovation and entrepreneurship as core pillars of economic development will allow SMEs to evolve into key architects of the national economy, not just contributors

As someone who closely monitors economic developments, I see the Abu Dhabi SME Champions programme as a key initiative driving entrepreneurial growth in the emirate. The programme not only provides startups with access to funding but also fosters stronger engagement with government bodies and the private sector. More than just financial support, such initiatives deliver capacity-building tools and cultivate an entrepreneurial mindset throughout the community, supporting startups in their journey to success.

Since its launch in 2023, the programme has made a remarkable impact. In its second year, it attracted 2,235 companies, marking a significant milestone in entrepreneurial empowerment. Significantly, more than half of these registered companies are microenterprises, highlighting Abu Dhabi’s inclusive business environment that welcomes ventures of all sizes.

A vibrant SME sector is undeniably the backbone of a resilient and innovative economy, and the numbers speak volumes. Last year, deal values facilitated by the programme exceeded $183 million, reflecting strong collaboration between the public and private sectors. This reinforces the importance of integrated efforts among economic stakeholders in driving sustainable growth.

Abu Dhabi’s ecosystem benefits from several strategic advantages, including progressive visa policies that attract global talent, extensive government support and a clear leadership position in emerging fields like fintech, Web3 and digital assets. These factors collectively reinforce Abu Dhabi’s appeal as a launchpad for global innovation and entrepreneurship.

The Abu Dhabi SME programme, with 20 strategic partners on board and 13 training sessions conducted in collaboration with nine key entities, has significantly advanced SME capabilities to meet evolving market needs. These efforts contribute to an innovation-led economy and solidify the UAE’s status as a global hub for a knowledge-based economy.

Abu Dhabi’s investor-friendly frameworks and forward-looking regulatory environment continue to instil confidence among global businesses and venture capitalists. With its future-ready economy, ambitious policy reforms and growing innovation ecosystem, Abu Dhabi is not merely keeping pace but emerging as a global centre for entrepreneurship and next-generation economic development.

Looking ahead, the focus must remain on deepening these efforts for promoting entrepreneurship, not only by increasing financial support but also by expanding public-private partnerships and ensuring equitable access to opportunities for SMEs. Promoting innovation and entrepreneurship as core pillars of economic development will allow SMEs to evolve into key architects of the national economy, not just contributors.

The future is promising. SMEs are set to play a central role in shaping the UAE’s economic trajectory. Investing in this sector is not a choice but a strategic necessity to ensure long-term national prosperity and achieve the ambitious vision of the UAE.