Economic productivity in the early 21st looks very different to what came before. It is knowledge-driven and diversified by globalisation. To attain productivity growth, countries these days need a sophisticated policy toolkit that diversifies their economies, harnesses talent and manages development.
This week’s announcement that the UAE plans to become the “start-up capital of the world” is an example of the adaptability and ambition required for success in this era. Among the initiative’s targets are plans to boost the number of companies operating in the Arab world's second-largest economy by nearly 67 per cent – to 2 million – by 2031, with a focus on developing the small-and-medium enterprises as critical engine drivers for the economy.
As well as developing the Emirates’ established reputation as an attractive destination for global talent, the campaign also intends to attract and train 10,000 Emiratis to set up their own businesses in sectors of strategic importance. Given that SMEs form the backbone of a dynamic economy, contributing more than 63 per cent of non-oil gross domestic product in the UAE, creating and supporting more of them is a complimentary strategy to the other policy choices that have underpinned the UAE’s success: a progressive visa regime, natural resource wealth that’s used to drive a diversifying economy, a high standard of living and the embrace of cutting-edge technology.
That this national campaign was publicly launched by Sheikh Mohammed bin Rashid, UAE Vice President and Ruler of Dubai alongside Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, and a number of Cabinet members reveals it to be a significant statement of intent and a signal to investors that it is serious about a productive economy.
This latest campaign sits alongside a collection of UAE initiatives that, when taken together, symbolise a national drive. The StartupEmirates.ae Digital Platform will provide free mentorship programmes and connect young people with start-ups, aiming to create 30,000 new jobs by 2030. Operation 300bn, a 10-year strategy launched four years ago, aims to position the country as an industrial centre by 2031 and boost the sector’s GDP contribution to Dh300 billion from Dh133 billion in 2021. Make it in the Emirates is another established government initiative that encourages more manufacturing in the UAE.
This is all taking place in a country that is working diligently to harness the advantages of globalalised capital – and mitigate the risks. On one hand free zones and business incubators offer flexibility to local and foreign companies that sense opportunity in the UAE. Evolving business regulation, unemployment insurance and medical care for staff, and strong oversight regarding financial flows are other important elements in this national policy toolkit.
As technological innovation continues to revolutionise existing economic models, it is up to each country to do what it thinks best for their economies and societies. For some, that means a return to protectionism or pushing for the onshoring of previously outsourced manufacturing. For the UAE, it is about adopting a balanced approach – building more businesses at home while nurturing international partnerships but all the while encouraging the next generation to realise their ambitions.
