Start-Ups in Mena grow 8-fold in six years
Dubai, October 17, 2012
The number of start-ups in the Mena region increased eight times during the period between 2005 and 2011, a report said.
Jordan, Lebanon, Egypt and the UAE attracted most early stage investments in the same period. More specifically, the UAE attracted 17 per cent of these start-ups during 2011, according to the report released by Dubai Internet City (DIC) in collaboration with global business research and consulting firm Frost & Sullivan.
The report indicates that government-backed initiatives to encourage entrepreneurship, as well as the development of universities offering programmes for entrepreneurs and investors, technology parks, and incubation centres are some of the reasons behind the surge in the small and medium-sized enterprise (SME) sector.
Titled ‘The Role of Entrepreneurship and Small and Medium Enterprises (SME) in the Development of the ICT Industry’, the report highlights the UAE government’s firm conviction that the SME sector serves as an effective enabler for economic growth.
Consequently, the UAE allows100 per cent ownership for start-up companies along with other support services across its free zones.
Malek Al Malek, managing director, Dubai Internet City and Dubai Outsource Zone, said: “The report generated in collaboration with Frost & Sullivan identifies the UAE and Dubai as a leading destination for ease of doing business for SMEs. It additionally points out that free zones such as Dubai Internet City have played a key role in contributing to the UAE’s status as a favoured business hub. In line with the UAE’s vision to support SMEs, DIC will continue to offer state-of-the-art infrastructure, business assistance as well as incubation services to attract new tech start-ups to the region.”
Ranked fifth globally in the freedom to trade internationally, higher than the US, the UAE is regarded a lucrative location for Foreign Direct Investment (FDI). Long-term political stability augments the UAE’s position as a favoured destination for business, the report said.
The study also revealed that many governments in the Mena region are seeking to drive economic growth through implementing business friendly policies and regulations. Among the GCC countries,UAE tops the list with its governmental initiatives to promote international partnerships and foster innovation. For instance, the UAE government has reviewed its laws on intellectual property and copyright and streamlined them with international standards.
Jonas Zelba, senior research analyst, Frost & Sullivan, said: “The report through its comparative analysis has identified the UAE to have a compelling value proposition that should see it emerge as a leading international destination for entrepreneurship and incubation in the next decade. Leveraging key strengths such as high numbers of foreign language speakers, stable operating conditions and favourable taxation provisions, the UAE is expected to gain traction with IT start-ups servicing industries such as financial services, retail, and IT among others.”
The report showed that only few Mena countries such as Egypt, Jordan, the UAE and Saudi Arabia are investing in innovation through various incubation programmes and funding tie-ups with international governments and private equity (PE) firms, a statement said.
On this front, the UAE stands as the largest investor in innovation as far as the PE transactions are concerned. With efforts such as the ICT fund to promote the sectorin the region and multiple levels of networking, the UAE is committed to innovation and the progress of R&D through entrepreneurship, it said.
According to the report, the level of ICT skills amongst the population of the UAE is high compared to most Middle East countries with 99 per cent of educational establishments featuring computer labs, 95 per cent of teachers with professional ICT qualifications and 84 per cent of students using internet at schools. Additionally, the report points out that the working population has easy access to computers, with 94 per cent of government employees and 95 per cent of non-government employees using a computer at work in 2011.
On the business side, 16 per cent of online sales account for ICT businesses and 85 per cent of other organisations has reported receiving orders from people accessing their website, clearly indicative of a technologically savvy and aware population, said the statement.
With the IT spend predicted to reach US$1.8billion by 2013, the UAE will continue to top the Mena charts in terms of mobile penetration and a growing information technology market, the study said. – TradeArabia News Service
More Industry, Logistics & Shipping Stories
- Pentair to set up manufacturing unit in Saudi
- Alba supports major energy summit
- Polysys Additive breaks ground in Kizad
- Qatar non-hydrocarbon economy on the rise
- ADPC to take over UAE port operations
- Carlyle readies $3bn sale of chemical firm
- Firm plans to bring super jumbo jet to Bahrain
- Johnson Controls, Hitachi in AC venture
- OICT installs nextgen cranes at Sohar Port
- Saudi petchem giants eye share-swap merger in 2014