With soaring temperatures in excess of 30 degrees, the prospect of a ‘staycation’ in the UK seems much more likely (and favourable) than jumping on a plane to sunnier overseas destinations. When I think back to when I last travelled – back in February – when I was in Dubai just ahead of the chaos breaking out in the UK, the extent to which the world and markets have gone mad since then is practically unthinkable. With over 9m infected and almost 500,000 dead (at the time of writing this article), millions thrown out of work, schools closed, and health systems stretched to breaking point, the pandemic’s ramifications have touched every part of society the world over.
…to the Land of Sun
My February visit to Dubai – one of several that I make each year to support the School’s aspiring entrepreneurs – coincided with my participation in the region’s STEP Conference. STEP is the leading technology festival for emerging markets and I was there as a panel speaker aptly on the subject of how academic institutions are supporting their start-ups. With the UAE having since been challenged not only by the impact of Covid-19 but also by the dramatic daily variations in oil prices, there is a powerful significance in the economic diversification of the region. Upon reflection, the announcement at STEP of more than AED 600 million having been awarded to fund deals for home-grown start-up companies in Dubai really couldn’t have been timelier.
The news produced a powerful reverberation in the minds of many who know the city and the UAE well. This generated a ripple effect that originates from the years of important foundational work that has driven innovation, economic growth and investment in technology and disruption across emerging markets. It is foundational work that defines, for example, Dubai’s status as the top destination for entrepreneurs to build and grow their businesses. It banishes, I hope forever, memories of every bust in the oil cycle that brought about calls for diversification (and the subsequent booms that made those thoughts fade). The news also adds tremendous force to the moniker, “the World in Dubai”, the theme of this year’s conference.
More blue skies ahead
For me, as a regular visitor to the region, the award is a sign of a maturing economy in an area that historically has been tied to the hydrocarbon industry and is now flexing its intellectual capital and skills. I am not alone in holding this view. According to the World Economic Forum and the World Bank Group, the UAE leads the Arab world in competitiveness as increased diversification makes its economy more resilient. Ranked 17th in global competitiveness, the UAE has been able to weather the shocks of lower oil and gas prices and reduced global trade, while maintaining a stable macroeconomic environment, all due in large measure, according to the Arab World Competitiveness Report 2018, to the region’s commitment to diversification.
Despite this progress, there is still room for improvement. Philippe Le Houérou, CEO of International Financial Corporation of the World Bank Group, has said in order to further increase its competitiveness, the UAE will have to speed up progress, principally growing its engagement with the latest digital technologies (currently ranked 36th globally) and upgrading education (36th). In terms of education, training and the inevitable need to create non-oil jobs for a youthful population, governments within the UAE have been proactive in addressing both the opportunities and confronting the concerns presented by the region’s young population. Across the UAE, it is widely recognised that if young working-age individuals can be fully employed in productive activities while gathering valuable experiences and training, the level of average income per capita should increase as a result, with the knock-on effect of a stable and productive society.
Looking into the horizon
The newly opened Abu Dhabi Youth Hub is visibly a step in the right direction. Across the region, the growing integration of professional qualifications within selected curricula, developed in partnership with professional associations, is helping to make graduates more attractive to prospective employers. The UAE’s Higher Colleges of Technology (HCTs) are currently implementing a ‘Hybrid Education Model’, awarding students with professional certificates in addition to their academic degrees. This initiative not only aids universities in bridging the skills gap and making graduates more attractive to prospective employers, but it also serves as a unique and sustainable employment initiative in the region.
However, it is in the arena of supporting innovation and helping to nurture start-ups and grow SME communities that is providing the strongest support for the UAE. By supporting start-up business and promoting the importance of innovation, the benefits of employment growth and the creation of a more dynamic economy soon become clear.
By facilitating better access to global markets and supporting knowledge networks, the UAE can strengthen the contributions – employment, tech innovation and so on – start-ups can make to the region. If the 600m will in some way allow new companies to operate more efficiently and access international markets at competitive costs, I’m confident that the world will certainly hear more and more from the UAE in the increasingly fast-paced, tech-enabled world of the 2020s.
Jane Khedair, Director, Institute of Innovation and Entrepreneurship, London Business School