How public-private partnerships fuse the best of both worlds
When you think of public-private partnerships, it is not only about financial investment, it is also about enhancing an ecosystem so an entire sector can thrive. As the acting chief executive of Khalifa Fund, an enabler of the small and medium-sized enterprises, it is my duty and passion to find ways to further advance the UAE’s SME sector.
According to last year's report Small and Medium-sized Enterprises in Abu Dhabi by the Abu Dhabi Chamber of Commerce and Industry, Abu Dhabi’s SMEs account for 98 per cent of its market economy if micro enterprises are counted in the SME basket, 29 per cent of its GDP, and 44 per cent of its non-oil economy.
When considering these numbers, it becomes impossible to overlook the importance of the SME sector.
From creating new enterprise development initiatives, to hosting first-class training programmes and guiding SMEs, Khalifa Fund is commited to many diverse SMEs that make up the sector.
However, an avenue that we are increasingly exploring is PPPs. As announced earlier this year, the government of Abu Dhabi is issuing multi-billion-dirham tenders under the PPP model to encourage investment in projects across sectors.
Around the world, organisations that are both government and privately owned are increasingly recognising the positive outcomes of PPPs. They understand the benefits of sharing resources to achieve a common goal: gaining access to specific skill sets and resources, injecting more investment and reducing risk all drive PPPs forward and make them more popular.
In relation to our local market, PPPs present a fantastic opportunity to many sectors. One in particular that these partnerships can enhance is Abu Dhabi’s SME sector. But how so?
PPPs fuse the best of both worlds. When governments procure the most efficient and economically viable partnerships, they explore the free market and create a business environment where the most proficient entities are awarded with the opportunity to work with the government on specialised projects.
When government entities work closely with private sector organisations, it leads to a rapport where leading, private sector entities begin to put their specialist minds to work in conjunction with the government’s plans.
When you think of PPPs, it is not only about financial investment. Sometimes it is also about enhancing an ecosystem so an entire sector can thrive
In relation to Abu Dhabi, this is being achieved through the Ghadan 21 accelerator programme, where the aforementioned multi-billion-dirham tenders are being allocated through an initiative to increase the use of PPPs, which will entice private sector participation and investment. That brings me to the next important factor of PPPs – attracting private sector investment into SMEs.
When SME enablers take the time and make a conscious effort to establish PPPs, the entire SME sector benefits from opportunities that would not have previously existed.
When you encourage PPPs within the SME sector, the small enterprises with the most promise quickly rise to the top and reap the rewards of being close to leading private sector organisations. Those rewards can come in many forms – they don't have to be monetary or revolve around trading equity for investment from a larger firm.
These intangible rewards could be: gaining expertise knowledge, acquiring access to resources, or perhaps being affiliated with multinational corporations that can boost performance though mutually beneficial partnerships.
And these rewards are exactly what Khalifa Fund is pursuing through PPP efforts.
On September 16, Khalifa Fund announced the launch of a partnership with Amazon, which saw the launch of e-Empower, an initiative to support and develop Abu Dhabi-based SMEs and entrepreneurs by providing e-learning content to help small businesses expand their online capabilities. Experts from noon.com will also train Emirati micro-businesses on how to broaden their online customer reach.
When you think of PPPs, it is not only about financial investment. Sometimes it is also about enhancing an ecosystem so an entire sector can thrive. Through PPPs like these, we contribute to the gross domestic product of the emirate.
The government of Abu Dhabi has played an integral role in both developing and supporting the SME sector. They have recognised the need for PPPs and are exploring this avenue as a way to continue this steady growth of non-oil revenue.
I commend the efforts of public sector organisations that are enhancing the entrepreneurial ecosystem and fostering a culture of investment and business growth.
Moving forward, I would encourage all major, industry-leading enterprises to set their eyes on Abu Dhabi and acknowledge the range of entrepreneurial talent that exists in our market. The more synchronicity we establish between industry leaders and Abu Dhabi’s SME sector, the more it will benefit our innovative entrepreneurs.
Mouza Al Nasri is the acting chief executive of Khalifa Fund
Updated: October 18, 2020 04:57 PM