We quizzed Dubai Chamber of Commerce and Industry about how start-ups and SMEs fit into the UAE’s business landscape. Essa Al Zaabi, senior vice-president, institutional support sector, at Dubai Chamber of Commerce and Industry, and general co-ordinator of Tejar Dubai, discusses the Chamber, how it helps new businesses, and why the future is strong for start-ups.
How does Dubai Chamber help entrepreneurs and start-ups establish and grow their businesses?
For more than four decades the Dubai Chamber of Commerce and Industry has been instrumental in supporting and protecting the interests of the business community.
Also, as part of its strategic objectives of creating a favourable business environment and supporting the development of business, the Chamber helps all businesses, especially entrepreneurs and start-ups, establish and grow their businesses.
This is done through various initiatives like opening up representative offices in promising and upcoming markets of the world; the International Business Network (IBN) which allows global companies to become Dubai Chamber members; launching alibaba.com – an e-commerce portal which opens the doors of opportunities for UAE companies to display and sell their goods and services to global companies online; issuing of quarterly reports and economic studies giving trading figures and market information; and honing upcoming entrepreneur talent with the newly-launched Tejar Dubai entrepreneur development programme.
Could you elaborate on the Tejar Dubai initiative for budding SMEs?
In line with the vision of H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, which states that the shortest path to a brighter future is that of entrepreneurship, the Dubai Chamber of Commerce and Industry initiated Tejar Dubai which is an Emirati entrepreneur development programme that identifies and develops nascent UAE national talent in the field of business.
This first-of-its-kind entrepreneurship development programme which was launched last year in the UAE comes as part of the Chamber’s commitment to developing national talent and to offer them job opportunities as well as to open up avenues for their entrepreneurial projects in the area of small and medium enterprises.
It also aims at enhancing the reputation of Dubai as a leading global trade and finance hub.
What does the programme involve?
This extensive development programme is dedicated to providing a tailored individual learning experience to selected aspiring entrepreneurs.
It aims to arm them with the knowledge and skills necessary to ensure the success of their innovative ideas and creativity, as well as their smooth entry into the world of business with their SME projects.
It includes classroom learning, on-site training, mentoring and business advice, while providing networking opportunities with first-generation local and international business leaders , as well as access to investment capital.
What is the objective of the programme?
Overall, Tejar Dubai is aimed at fostering the development of a more diverse, knowledge-based economy – especially in the SME sector – to enhance Dubai’s position in the global economic landscape.
This entrepreneurship development programme is in line with the directives of the UAE Government which has recently issued Federal Law No. 2 for the year 2014 to support SMEs.
Also, the Tejar Dubai initiative is part of the constructive efforts of Dubai Chamber in supporting this vital economic sector. This particular programme works to create a supportive environment in which knowledge activities can be cultivated, gestate and mature.
Fostering start-ups and entrepreneurs will allow Dubai’s economy to continue flourishing while ensuring standards of living will be preserved well after oil production ceases.
How has the programme progressed since its inception last year?
To date, we have received 300 applications for participation in the programme. Some 90 young aspirants who submitted their business ideas were screened, and 10 candidates were selected.
Of those 10, one female candidate who is running a unique nursery is all set to open a terrific new early childhood educational center which will cater for three languages including Arabic, French and English. The centre is absolutely tailor-made for the cosmopolitan life here in the UAE. Surprisingly, 70 percent of the applicants in the programme are women.
We have organised eight workshops on analysis of cash flow statements, terms and conditions for establishing small and medium enterprises, corporate financial management and writing of business plans.
The special Tejar Dubai Idea Olympics workshop helped budding entrepreneurs to turn their ideas into reality and to join the programme.
What future do you foresee for the programme?
We certainly don’t intend to rest on our laurels.
We will continually develop this initiative to make it more attractive and interesting to new entrepreneurs. Also, in the near future, we have a huge workshop planned where prominent business leaders in the emirate will talk and inspire the younger generation to take up business.
We call upon the Emiratis to benefit from the services offered by Tejar Dubai as the programme is directed at raising awareness about the importance of entrepreneurship, personal development and empowerment of the youth in the business world, as well as helping them learn, benefit and emulate the success of the first generation business leaders.
What support can the Chamber give to business owners starting out on their entrepreneurial journey?
The entire objective behind our Tejar Dubai programme is to provide extensive training on creating business ideas and setting up a business successfully.
The Chamber offers research and studies, market reports, business advocacy, international membership, global market trends and advice on how to set up business in the overseas markets and many more value-added services to enable business owners to set out with a firm footing on their entrepreneurial journey.
Why the SME sector?
SMEs constitute over 90 percent of Dubai companies and contribute 30-35 percent to the UAE’s GDP. This shows the significant role they play in regards to employment and economic activities in the country.
Also, as a majority of Dubai businesses are family-oriented and are concentrated in the SME sector, it is important to raise private sector participation of Emiratis. This is vital to ensure a sustainable and profitable future for the emirate and its economy, enabling it to flourish for years to come.
What partnerships has Dubai Chamber entered into in order to help small businesses succeed?
On its part, Dubai Chamber has initiated a co-operation tie with the National Bank of Abu Dhabi (NBAD) to provide finance facilities of up to $100m to the Chamber’s SME members.
This will help them establish their own sustainable businesses, and to foster entrepreneurship and private sector growth. The Chamber has also partnered with Dubai SME to encourage greater participation by agreeing to allocate a minimum of 10 percent of its annual procurement contracts to members of the Government Procurement Program (GPP).
The SME sector is on the rise. Do you think more funding is needed to promote this sector, especially from financial institutions?
Dubai Chamber has been working to facilitate a dialogue between our SME members and banks in the emirates. We have done this through roundtable discussions and meetings, inviting top officials of the Central Bank.
However, our main contribution towards enhancing this area has been the formation of the SME finance taskforce, which sought to facilitate an increase in the provision of funds.
A result of this taskforce was the publication of the Guidelines for SME Finance document that provides information and guidance to SMEs when applying for credit facilities.
Is the current business environment strong for start-ups and SMEs?
In fact, it is, as Dubai’s current economic situation is very positive. The emirate has experienced unprecedented growth across all its key economic pillars last year as well as many supporting sectors, and Dubai Chamber has continued to see rising figures for its members’ trade so far this year.
The value of our members’ exports and re-exports last year increased by eight percent to AED290bn ($79bn). In 2012, it increased by nine percent, to a value of AED268bn ($73bn).
Also, our Dubai Traders Outlook Survey 2014 pointed to significant improvement in the outlook of Dubai traders for the year ahead as the mean expectation rating rose to 6.5 points on a scale of one to 10, which is higher by 0.5 points than 2013.
This represents the highest ratio of positive expectations in recent years. The survey indicated that 60 percent of traders expect market demand and sales to be very good or good. This is a good indicator of the current mood in Dubai and will help attract new investment. We also expect more foreign investment in the run up to Expo 2020.
What does the future hold for start-ups and SMEs – especially in the build-up to Expo 2020?
The SMEs are expected to be the biggest beneficiaries of the build-up to Expo 2020.
The global event has already lifted consumer and business confidence, offering umpteen opportunities for start-ups to benefit from the infrastructural and other related developments.
No doubt, Expo 2020 will mark a new era for Dubai, boosting economic growth, developing new areas in our city and attracting the world’s attention, giving us the opportunity to promote everything Dubai has to offer. Expo will help attract additional FDIs, new businesses, and more skilled workers, while increasing Dubai’s competitiveness.
The mood among the Chamber’s members is positive and we expect this to strengthen as we move closer to the World Expo 2020.
In fact, a recent study with our trade members found that 51 percent of those surveyed expect sales to increase because of Expo 2020, which will stimulate investments worth billions of dollars in sectors such as construction, real estate and infrastructure development, hotel and leisure, tourism, retail, transport, aviation, trade, media and advertising.
In the Chamber’s experience, what are the main growth sectors for SMEs?
Trade, tourism, logistics and financial services are the leading drivers of Dubai’s economic growth as these sectors have been performing extremely well due to the private-public sector partnership.
These sectors hold huge potential for SMEs as they offer a wider outreach. Meanwhile, the retail sector, which is thriving on Dubai’s status as a leading global business destination, has a lot to offer along with other support sectors including real estate, education and healthcare.
Why are SMEs so important to Dubai, the UAE, and the region in general?
In the UAE, SMEs contribute an estimated 40-46 percent of nominal GDP, while accounting for approximately 90-95 percent of registered firms in the country.
Despite the integral role SMEs play in Dubai’s economy, the global financial crisis and local debt difficulties have impaired their ability to obtain financing and therefore continue growing.
Realising the importance of the sector, Dubai Chamber on its part has been working to facilitate a dialogue between our SME members and banks in the emirates, while the organisation is launching various business-stimulating initiatives to support SMEs to grow and make their mark in the business world.
Also, the SMEs play a very significant role in trading with the GCC region which is the largest export market for Dubai Chamber members. Hence, Dubai enjoys a robust bilateral relationship with its GCC trading partners thanks to the hard work of the SMEs.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.