Innovation in the UAE: From First Foundations to ‘Beyond Oil’
| Author | Mona Abou Hana |
| DOI | http://doi.org/10.1111/1758-5899.12481 |
| Date | 01 September 2017 |
| Published date | 01 September 2017 |
Innovation in the UAE: From First Foundations
to ‘Beyond Oil’
Mona Abou Hana
PwC Middle East
Abstract
The UAE’s evolution from first foundations to the country that it is today as well as the vision it holds for the future is master-
fully shaped by the Government’s determination to the innovation agenda coupled with the passion and active participation
of the private sector in the UAE. This article looks into the innovation drivers, major milestones, accomplishments of this rela-
tively young yet highly achieving country and provides insights others can gain from. The article also highlights considerations
for all countries in the Middle East region to reflect on in terms of 1) acting fast to keep up with the pace required for innova-
tion, 2) being flexible, adapting to change and learning from failure, 3) being open for the wisdom of the crowds as well as
partnerships and collaborations, and finally 4) getting on and following through the implementation of the innovation
agenda.
In the last half century, the United Arab Emirates has
evolved from a small sparsely populated nation reliant on
agriculture and fishing, to a modern trading economy. The
vast oil wealth first exploited in the 1960s and 1970s has
funded government investments in new industries, designed
to reduce the nation’s dependence on fossil fuels, as well as
huge construction, ICT, transport and infrastructure projects.
For example, the Jabal Ali Port is now one of the top ten
ports in the world, and there has been significant expansion
in the Abu Dhabi and Dubai airports. Dubai International
now serves more international travellers than any other in
the world. Thanks to all this investment, the UAE now ranks
in the top five countries in the Global Competitiveness
Index, in relation to Infrastructure Indicators.
The relative political stability of the Emirates, combined
with a high quality of life, low tax regime, and support for
business and small enterprise, has attracted foreign invest-
ment, and both regional and international talent. This, in
turn, has helped turn the Emirates –and especially Dubai
and Abu Dhabi –into a leading trade and tourism hub for
the whole region.
With the foundations in place, the government began to
actively exploit the UAE’s strategic geographical position at
the crossroads of East and West, and invest seriously in
innovation and technology. An early example was Dubai’s
Department of Economic Development’s decision to set up
a dedicated unit to nurture fast-growing small and medium-
sized enterprises (SMEs) and entrepreneurial ventures at all
stages of their development. Since Dubai SME opened in
2002, more than 500 businesses have been through its incu-
bator and benefited from its support. Similarly, the Ruwad
Establishment of Sharjah and Khalifa Fund of Abu Dhabi,
supports SMEs with marketing, finance, management, and
training, and facilitating access to funding.
Creating the right environment: a comprehensive
range of government support
Since the turn of the century, the UAE government has pur-
sued a threefold strategy to encourage innovation: establish-
ing free zones, setting up financial centres, and supporting
education. Free zones were first introduced in the 1990s,
with the aim of encouraging innovation by facilitating clus-
ters of forward-thinking businesses and start-ups. It’s a com-
mon, and successful, model used by governments across
the world to kick-start innovation on a top-down basis,
where it hasn’t evolved organically. These clusters help
attract flagship multinational tenants with a track record of
innovation, and that in turn brings in new talent, encour-
ages the spread of new technology, and builds invaluable
business networks with smaller firms. It also makes it easier
to provide specific government support in one defined area,
whether that’s funding, technology, or professional services.
In the UAE free zones, companies are offered a tax-free
environment for 50 years, and the Emirates was the first coun-
try in the region to extend this to firms under foreign owner-
ship. One of the longest-established free zones is Dubai
Internet City (DIC), which opened in 2000. Incentives like
100% repatriation of capital and 50 years’rent-free space
secured Microsoft as a flagship tenant. HP, IBM, Oracle, 3M,
SAP, and Google soon followed. The ‘cluster effect’here has
been very powerful, and DIC now hosts many of the most
promising and dynamic tech start-ups in the whole region.
A new free zone called the Dubai Silicon Oasis Authority was
established in 2005 to host promising innovative tech SMEs.
The Dubai Technology Entrepreneurship Center was opened
as part of this in 2015, and is now giving space and support
to more than 500 tech start-ups. The success of the UAE free
zones has been recognized internationally; the country now
©2017 Price Waterhouse Coopers International Ltd. Global Policy published by University of Durham and John Wiley & Sons, Ltd. Global Policy (2017) 8:3 doi: 10.1111/1758-5899.12481
This is an open access article under the terms of the Creative Commons Attribution License, which permits use,
distribution and reproduction in any medium, provided the original work is properly cited.
Global Policy Volume 8 . Issue 3 . September 2017
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