New visa and foreign ownership laws will have a profound impact on the country's innovation economy
It was four years ago at a conference in Dubai when, the Global Innovation Index results had just been unveiled, that a member of the audience asked Insead’s director of indices, who helps compile the annual list, why the UAE ranked highly in terms of inputs that determine a country’s innovation score compared to others, but lagged when it came to the resulting output.
The UAE ranked 36 then (and 35 last year), a strong rating for a country that was only 42 years old at the time. But it fell short of the scale of the country’s ambitions. Meanwhile, Singapore, a country often compared to the UAE, was ranked as the seventh most innovative.
The UAE’s transient population was mentioned among the factors holding back a higher score. While many expats in the country had been around for decades, it was still not a first-tier player in attracting and retaining talent at the same scale that helped create knowledge centres in places such as San Francisco, Stockholm and Barcelona.
Singapore, however, had managed to turn itself into one of those destinations, and relaxing its residency regulations was seen as one key factor. A small country with an even smaller local population turned itself into a global economic force by, among other initiatives, offering long-term visas to high-skilled foreigners. Later generation expats could even call themselves Singaporean, given certain conditions.
This is the model the UAE has tried to “copy paste” according to Leith Ramsay from recruitment firm Michael Page. “The new laws are a big step in the right direction,” he told Arabian Business last week.
According to the new directives, engineers, doctors, researchers, academics, high skilled professionals and students will soon be eligible to receive longer-term visas to stay and work in the UAE. It might not have seemed as important an issue for the many expats who only ever planned a working holiday in the country, but as Ramsay puts it, “The mindset was that the UAE would be a five-year destination. Now it will attract and retain people who want to compete.”
Not that it was short on talent until now. Along with many Emirati visionaries, the UAE has long had a large talent pool of high-profile expat innovators such as Ronaldo Mouchawar (Souq), Magnus Olsson and Mudassir Sheikha (Careem), Ashish Mehta (Ashish Mehta & associates) or JC Butler and Sim Whatley (Dubizzle). But what it now needs to catapult it into a new era is many more big thinkers who are willing to spend time and take risks in the country.
According to Aramex and Wamda Capital founder, Fadi Ghandour, the new ownership rules will not only help attract new investments but will prompt an influx of “new talent, new capital and certainly new start-ups... It will make life much easier for entrepreneurs and businesses in general.”
His son, Fares Ghandour, a partner at Wamda Capital, says the longer residencies and ownership rules will also encourage more flexibility.
The local ownership laws are more interesting than the residency permit laws as they will reduce dependence on free zones”
“It will give cushioning for freelancers and researchers alike to reside in the country without the need to depend on employment,” he notes.
“The local ownership laws are more interesting than the residency permit laws because [they] will reduce dependence on free zones and free zone real estate, which is inflated relative to the onshore market.”
These are also early days and as the department of immigration told us, they still haven’t received the whole set of instructions on what the new laws entail.
However, in the years to come one thing the new rules could have a massive impact on is the Dubai 100 list in this issue. We could expect to see, for instance, more academics attracted by long-term tenures.
Students coming out of higher education will also have more time to find their feet, innovate, experiment, fail a few times and then hit on the solution that gives them a place in future lists. And that could be the key to pushing the UAE up the innovation rankings where it very much belongs.