A new, long-term strategy has been initiated in the United Arab Emirates that is set to boost the success rate of small and medium enterprises by 50%. The plan is aimed to reduce the country’s dependence on oil revenue and the federal entity responsible for the initiative has been endorsed by the UAE Cabinet. Currently, small and medium enterprises (SMEs) have a success rate that is just around 25% to 30% and the Managing Director of National Bank of Abu Dhabi Securities anticipates the program will boost that rate up to 50%.
The initiative is called The National Program for Small and Medium Enterprises which is the first time a federal entity has establish this type of body in support for the SME sector. However, it’s not the only organization that has placed valuable resources into the growing sector as Hussain al Nowais, chairman of the Khalifa Fund for Enterprise Development, has established similar initiatives with investments for the SME sector.
The federal program is housed under the order of the Ministry of Economy and sets the focus to develop a strategic blueprint which will provide technical support, expertise and training to bolster SMEs throughout the region. Additionally, the program will work with local and federal governments as well as the private sector to fuel products inside the UAE and beyond. This type of diversifying strategy will help decrease the dependence of oil revenues as the global market for oil demands change. On top of that, it works as a way for Emiratis to use the opportunity to start their own businesses, utilizing entrepreneurship skills instead of waiting for a government job opening.
As it currently stands, the UAE has approximately 300,000 SMEs that represent roughly 92% of all businesses and contribute about 86% of all jobs in the UAE market. With that being said, SMEs account for 60% of the country’s GDP and that number is expected to rise by 2021 to 70%, to meet the requirement set in place by The National Agenda. Due to the expertise Hussain al Nowais has developed and put in action during his own ventures that stimulate SMEs in the UAE, he has welcomed the plan of assisting with the start of The National Program for Small and Medium Enterprises as is will effectively and efficiently contribute to the country’s economy.
The initiative can help the UAE strengthen the SEM sector which will build up competitiveness in the national and global markets. As the holding company Khalifa Fund shares its’ expertise with the local and federal bodies, the SME initiative is predicted to meet the needs of the UAE.
The issue of gender inequality is one that exists in nearly every country across the globe. Achieving equal rights and status in society has been a long and hard fought war with many battles still to come. Even in countries such as the U.S. and the U.K. there remains a great deal of inequality both publicly and privately. In countries in Asia and the Middle East the inequality and differences are even more pronounced. Fortunately, women in many of these countries are standing up and taking control of their lives and their futures.
In the UAE a group of determined and professional Abu Dhabi women have created the first female Emirati leadership group for helping women who are in or are aspiring to major careers. The name of the group is Qiyadiyat which means “female leaders” in Arabic. It was started by three friends, Laila Al Hassan – director of communications and PR at Abu Dhabi’s Environment Agency, Bodour Al Tamimi – co-founder of Bedashing Beauty Lounge and portfolio manager of an investment house and Su-ad Yousif – an economic analyst. The three become friends during university and as their careers have developed their friendship has strengthened.
The catalyst which spurred the trio into action was the discovery of only 1.5% of board positions in the GCC are held by women. They wanted to explore why this is and help women who have the skills and the leadership traits necessary for developing high caliber careers. The group had their first “High Q” gathering in February 2014 and they invited successful Emirati women employed in marine biology, energy, communications and many other diverse fields. During this first conference they invited high profile leaders who have supported women joining the workforce and holding high level positions. Hussain Al Nowais, chairman of the Khalifa Fund, and Ahmad Al Sayegh, managing director of Dolphin Energy, were both there to show their support and speak to women about how they can develop their careers.
The first meetings were small with roughly twelve people to a room in order to foster more intimate conversations which proved very productive. The second High Q meeting has roughly 25 women per discussion, but each one was still small enough and thus it was again extremely productive. What they groups have focused on in the beginning is personal branding. Many women are very accomplished, but they don’t do a good job of speaking highly about themselves and displaying their accomplishments for others to see. The group plans to increase the frequency of the sessions and hopes they can continue to be a positive force for networking with other women in high level careers.
Senaat is a corporation that was created by the Abu Dhabi government and charged with investing the government’s money and helping it generate profit and revenue. The other name for Senaat is the General Holding Corporation. Last year the Senaat saw a net profit growth of 5% which gave the corporation a total of Dh923 million. This is the corporation’s best year on record since its creation. The corporation is responsible for the industrial section of the Abu Dhabi government; this means it oversees the government’s stakes in gas services, construction, steel, oil and more. The corporation’s total earnings before depreciation, tax and interested was Dh2.1 billion.
The Senaat is vital to ensuring the diversification of the Abu Dhabi government’s holdings away from oil to ensure it is strong and healthy even when there is ups and downs in the oil markets. The company at present employs well over 15,000 people. The company’s strategy of investing in numerous industrial sectors has continued to prove successful despite the volatile economy last year. Their revenues rose 16% to Dh13.4 billion and their total assets for that same period was Dh26.8 billion. Hussain Al Nowais, chairman of Senaat said, “Senaat has completed the year with robust revenue and profit growth despite a volatile economic environment, thanks to the company’s flexible business model and its ability to weather the impact of market volatility and economic cycles”.
Another demonstration of the company’s success is its ability to reinvest in its own projects and new ones without the assistance of government funding. The company’s financial strength should be able to help strengthen the Abu Dhabi and UAE government. Hussain Al Nowais is looking to continue investing heavily in various industrial projects with an anticipated Dh5 billion over the next two years. The company is also planning to continue its diversification of investments in order to widen the base of its assets thereby fueling further growth.
Subsidiaries of Senaat have continued to show increasing profits and growth despite intense competition. The Emirates Steel was able to continue expanding and overcome Turkish and Chinese steel. The Ducab joint venture between the Dubai and Abu Dhabi government has been able to maintain its position as a leader in the region for cable and wire manufacturing. Several other subsidiaries in industries such as cement and food production also showed remarkably strong performances over the last year contributing greatly to the strength of the Abu Dhabi and UAE government.
The United Arab Emirates may be known for their vast oil reserves but unique and innovative ideas may come to fruition in the near future with a new program aimed at entrepreneurs. The proposed program will focus on the bright ideas that come from Emiratis who want to bring their ideas to life, whether those ideas are products or services. Currently, the UAE doesn’t have a system in place that helps innovators develop their ideas and the Khalifa Fund for Enterprise Development has the plans of starting an incubator program that does just that.
The proposed incubator program would give Emiratis the opportunity to present new ideas and apply them to comprehensive services that can bring them into reality. This support process would take about two years to fully implement into the small and medium enterprises sector which includes two initial phases. Since the UAE is economically reliant on oil, the program can help create other profitable sectors with innovation that can be shared nationally and worldwide. If successful, the head of the Khalifa Fund, Hussain al Nowais, could add the feat to his biography that is already quite impressive.
The first phase of the development of the incubator program would involve the creation of electronic systems that allow users to complete necessary internal duties like following transactions, obtaining approvals, tracking status of the loan and other services. The final phase would be to develop a mobile platform where all benefits can be accessed through a mobile device. But, the government would need to increase the support in the information and communication technology sector in order to handle these electronic duties by boosting data optical fibers and receiving towers.
The Khalifa Fund has already discussed the program with other potential investors and if the plans proceed, the UAE could emerge as one of the most innovated markets. Given the history and success of previous projects funded by Hussain al Nowais, the program would add to his lengthy biography.
When it comes to the global economy, it’s important for world leaders to meet and discuss current financial trends to discover new methods of economic strength. And when you combine The United Arab Emirates with some of the brightest world leaders, you end up creating the annual Global Financial Markets Forum. This two-day economic conference is on its 7th year and was organized by the National Bank of Abu Dhabi. Given the GFMF conference was held in the capital of the UEA, Abu Dhabi, it serves as a central hub between all visitors, making the capital a prime place to conduct economic meetings.
Recently, the UAE has shifted economic focus on small and medium enterprises throughout the country so contributions to the economy can be less reliant on oil. With this being said, new guidelines have been set in place on SMEs to account for at least 70% of contributions by the year 2020. As it stands now, SMEs only contribute about 60% but they are also the largest employers in the private sector and with added focus, they could increase the work force even more. Discussion about retailers and small businesses were among the hot topics during the conference which is why SMEs are changing the economic climate in the UAE.
But the issue in the UAE is the lack of lending opportunities provided by the national banks. SMEs must rely on outside funding that comes from investors like Hussain al Nowais and with an impressive biography and background, it’s no wonder why SMEs prefer his funding. Hussain al Nowais is a part of Khalifa Fund, noted in the biography, which is providing many SMEs in the nation with funding to achieve operational success. The GFMF conference touched on outside investments and noted the benefits of bolstering sectors that can increase the economy.
Some of the international speakers included the UAE Minister of Culture, Youth and Social Development, H.E. Sheikh Nahayan Mabarak Al Nahayan, and Colin Powell of the United States, the previous Secretary of State. Many financial discussions dived into various financial sectors from around the world like energy, banks and family heirs.