Why UAE’s entrepreneur ecosystem is thriving
Favourable environment provides fertile ground for start-ups
Abetter understanding of the geography of entrepreneurship has been increasingly recognised as an important element in explaining variations in regional economic development patterns in Dubai, Abu Dhabi, the Middle East and elsewhere. That said, the entrepreneurship process indeed tends to begin with individuals that possess unique personal attributes and have a penchant for risk-taking and achievement.
However, these entrepreneurs are rarely lone individuals who rely primarily on their extraordinary efforts and talents to overcome the difficulties inherent in the formation of a new firm or idea. Instead, the entrepreneurial process is the result of an interaction between an individual and the entrepreneurial ecosystem. Entrepreneurs are more likely to thrive and be innovative in environments that provide a healthy mix of institutions, regulatory regimes, infrastructure, venture capital, and demand for products; capable of nurturing innovation and opportunity.
These entrepreneurial ecosystems tend to be explicitly geographically bounded phenomenon in their more successful, wellknown manifestations, particularly in cities such as Stanford and Boston. In the UAE, some of the essential ingredients for building a thriving entrepreneurial ecosystem are already in place. The recent announcement by the Dubai Future Foundation, in partnership with several universities, to establish economic and creative free zones to encourage innovation and entrepreneurship among students is an excellent starting point. Such an approach is well-aligned with the country’s chosen path of transitioning from oil to a more knowledge-based economy.
Key initiatives
A key stakeholders in the entrepreneurial ecosystem of the UAE, the United Arab Emirates University (UAEU), is continuously focusing on building its innovation ecosystem both on campus and beyond. Some of this is being achieved at UAEU by developing research capacity in various fields such as the health sciences and space sciences and technology. Another important initiative involves attracting a growing range of start-ups and setting up incubators at the UAEU Science and Innovation Park in Al Ain.
These initiatives bode well for the future trajectory of the UAE’s entrepreneur ecosystem. It’s crucial that UAE universities continue to build momentum by developing more impactful partnerships with key industries while simultaneously realigning the curriculum and upskilling both educators and students to meet market demand.
The entrepreneurial ecosystem in the UAE is also flourishing because of the rapid development of a more favourable regulatory and commercial environment in both Abu Dhabi and Dubai, which have become preferred destinations for start-ups in the Middle East. Both cities are large markets with many venture capital firms headquartered in each city, thus offering many small business start-ups the opportunity to develop scalable innovations at speed. Many cities in the other emirates are also developing important entrepreneurial initiatives.
Two key initiatives moving forward are Ghadan 21 or ‘Tomorrow 21’ in Abu Dhabi, and the recently formed Dubai Future Council on Entrepreneurship and Innovation Ecosystem. The Ghadan 21 initiative is a Dh50 billion investment, in part, focused on stimulating the local entrepreneurial ecosystem and start-ups by providing access to governmentbacked loans to help trigger more innovation.
The Future Council on Entrepreneurship and Innovation in Dubai recently set up by the Dubai Future Foundation, is essentially a ‘think tank’ focused on developing a future road map for the Dubai entrepreneurship and innovation ecosystem. The council has been charged with figuring out how to empower a culture of innovation particularly, in partnership with other institutions, universities, and entrepreneurs. The initiatives being developed by the council are likely to provide a vital policy framework for further developing a preferred entrepreneurial ecosystem for startups and investors from around the globe.
Of course, now is not the time for complacency. One of the most difficult challenges facing emerging start-up communities in the United States has been embracing a culture of failure, where most start-ups fail within five years. So, it is important to accept the likelihood that not all start-ups are guaranteed to succeed. Therefore, patience and high-quality mentoring are crucial ingredients for success as the UAE moves along the path towards building an even more effective entrepreneurial ecosystem.
Dr. Keith Debbage is a professor of geography and business, Coleman Foundation Entrepreneurship Fellow, University of North Carolina at Greensboro, USA; and Dr. Khaula Al Kaabi is an associate professor of geography and Chief Innovation Officer of the United Arab Emirates University, UAE.