UAE will become a hub of ideas with visa reforms
The Cabinet’s recent announcement about granting 10 years visas to investors and highly skilled professionals and 100 per cent foreign ownership changes everything for foreign investors such as me, who have placed their bet on UAE. The country has opened its market for foreign direct investment and talent, at a time when many countries are raising protectionist barriers.
History is strewn with examples of nations adopting an open door policy. A 2017 study by the Center for American Entrepreneurship shows the role of immigrants in creating America’s wealth. More than 40 percent of the Fortune 500 companies have a first- or second-generation immigrant among their founders, even though just 14 per cent of the US population is foreign born. Interestingly, the study found that immigrants in the US have generated an amount of wealth greater than the GDP of Japan, the world’s third-largest economy.
On the other hand, the insular policies of China’s Ming Dynasty in the 15th century led to China’s economic and technological stagnation. Today Trump is sending the United States down a slippery insular road that could scare off investors and talent. USA’s loss could inevitably be UAE’s gain.
The cabinet’s announcement has many implications for investors. Firstly, it gives a sense of continuity and stability that will allow investors to think strategically. Secondly, the new visa system favours highly skilled professionals and scientists. This will help build an economy fueled by high standards. In a recent letter to investors, Amazon’s Jeff Bezos has posited that high standards are contagious within an organization. I would argue that this also holds true for a country. A confluence of great minds and scientific talent will have an overarching influence on the larger workforce in the country to help create innovative products and services.
Innovation needs the free flow of capital, labour and ideas, but not necessarily in that order. The relationship between capital, labour and idea is changing, as ideas become the focal point for capital and labour. UAE should also be able to leverage this changing dynamic. An abundance of ideas and the wherewithal to execute on them is what the country needs. This is difficult to achieve if a majority of the population is in a constant state of flux. The possibility to take an idea to fruition in a stable business setting becomes far more plausible in the light of the new regulatory environment. Foreign investors now will be far more keen to invest in intellectual property in 100 per cent owned companies, thus transforming UAE from a trading hub to a technology hub.
Over the years, the UAE government has laid the groundwork to give the country a competitive edge. Ease of doing business is one such example. World Bank’s Doing Business report uses time, cost and number of interactions necessary to incorporate a new business as a key indicator of ease of doing business. My own experience has been nothing short of pleasant. It was not just about the courtesy extended by government staff while processing the company license, but also about the simplicity of the process coupled with transparency that gave me a sense of well-being.
This simplified experience is powered by technology and healthy competition among government departments to deliver quality service. This hasn’t gone unnoticed. Last year, The Fletcher School at Tufts University, in partnership with Mastercard, published the Digital Evolution Index (DEI) 2017 that studied the state and rate of digital evolution of economies across the world. In the study, UAE was positioned as a leader among the stand out countries that shared the characteristics of high digital advancement and high momentum in innovation. It’s prominent position in this rarefied club of digitally advanced countries makes it an attractive breeding ground for start ups for home grown innovations.
In the end what matters is the kind of ecosystem that grows around new ideas and intellectual property, to continuously boost the economy. These enterprises can create a value chain extending to the MENA region and beyond. They can be the engine of growth for UAE in the next 50 years and fulfil UAE’s Centennial 2071 vision.
Foreign investors now will be far more keen to invest in intellectual property in 100% owned companies, thus transforming UAE from a trading hub to a technology hub. Shalini Verma is CEO of PIVOT Technologies