The Growth of Tech Start–Ups in the UAE

ardent Head of Marketing, Victoria Scott spoke to Dipti Vaidyanathan, the Trade Manager – Tech Sector at The British Centres for Business UAE to find out exactly what is going on in this vibrant part of the world.

VS: Is there an increasing drive for British Businesses to tap into the UAE markets – if so why do you think this is?

DV: The UAE is UK’s 12th largest trading partner globally and is the only country in the world where there are 2 British embassies (one each in Dubai and Abu Dhabi). Brand UK is highly respected and there is a constant demand for British products and services. British businesses are seeing the opportunity to tap into a UAE market with promising growth trends in the IT sector e.g:

  • The United Arab Emirates is the global leader in smartphone penetration and the IT spend is expected to grow by 5.32% in the UAE by 2015.
  • The MEA (Middle East and Africa) regions has the lowest percentage of e-commerce vs. offline retail sales globally, representing a huge opportunity especially for startup communities
  • The local government is playing a significant role in IT and is predicted to spend around $1.12 billion in 2015 which is almost 1/4th of the total IT expenditure

VS: Are the companies mainly expanding or are you also seeing start –ups?

DV: Globally recognised as the Middle East’s most dynamic leader in diversification, UAE’s public and private sector infrastructure has reached new levels of sophistication, and with that comes massive IT investment. The UAE is seeing a mix of both. There are mid and large sized companies that are setting up regional head offices in Dubai and Abu Dhabi not only to expand within the emirates but also to reach out to the wider MENA (Middle East and North Africa) region. There is also a growing start-up community in the UAE, more specificially in Dubai, and a corresponding number of initiatives and hubs where entrepreneurs can find support and assistance to help them as they start out.

 

VS: We are seeing an enormous growth in technology based companies in the UK – is this something you are seeing in UAE?

DV: The Dubai Strategic Plan 2015 has identified the role of advanced technology as a priority for growth and the rapidly increasing IT market has been built on a series of reforms and incentives. These initiatives and reforms have led to not only implementation, but also a surge of IT manufacturing and services as well as local research and development. The connectivity to the fastest growing IT markets in the world and a tax free environment makes Dubai not only an attractive destination, but also essential part of global technology business plans. The International Data Corporation (IDC) reported that out of the AED 79 billion (USD 21.5 billion) IT spend across the entire Middle East for 2012, Saudi Arabia and the United Arab Emirates were responsible for more than half the amount. With an economy that drives and thrives on innovation, the UAE is continuing to play a considerable role in increasing that investment.

VS: What is the impact of tech sector in preparation for Expo 2020?

DV: The Expo 2020, to be held in Dubai, is expected to attract more than 25 million visitors and create approximately one quarter of a million jobs according to a recent article by AME Info. A massive event of this scale will require huge technological investment and apart from large IT firms that will have a stake in contributing to the event, a number of smaller tech firms are also poised to benefit from the win. “Technology will play a key part in Dubai’s plans. This is a great achievement for Dubai and the wider Middle East region. The expo will have important benefits for the country, generating  $36.7 billion for the UAE economy,” says Alfonso di Ianni, senior vice-president at Oracle East Central Europe, Middle East and Africa.

 

VS: How does the BCB help new companies in UAE, particularly in the tech environment?

DV: The BCB is a British Government sponsored organisation that both helps UK companies become established in the UAE by way of the unique incubator platform we have established and also through our Trade Services arm (we are UK Trade & Investment’s delivery partner in the UAE) where we advise & support UK companies in 4 sectors -Tech, Creative, Retail and Food & Drink. We are seeing a lot of interest from tech companies in setting up offices in Dubai. A clear case in point is that 40% of the BCB’s incubator clients provide tech-related services. With regards to Trade services, the BCB can assist by way of conducting a detailed research on the tech-environment in the market, connect you to potential partners, distributors, resellers or specific contacts as appropriate to your company offering.

VS: What are the key elements to marketing a new company to the UAE market and how do the principles differ from doing the same in the UK?

DV: The UAE has a very diverse demographic ratio. To put this into perspective, the local Emiratis constitute less than 20% of the population. The expatriates are a predominant mix of South Asians, Europeans and Arabs among others. Therefore a new company wishing to enter the market should clearly identify its target audience while preparing an entry strategy. Though the UAE has a significant population with disposable incomes, companies need to conduct adequate research to ascertain and compare price points as well as competition and speak to local industry experts. Cultural sensitivities also need to be kept in mind while promoting products or services. It is also necessary to comply with the federal laws governing business activity, obtain correct authorisation and licences prior to conducting trade within the UAE, as well as to be properly advised as to the requirements which apply in each particular Emirate.

VS: What would be your top 3 tips to a business wishing to enter the UAE market?

DV: Doing business in the UAE is increasingly about “partnership” and contributing to both capability building and profit. Having a presence or partner is the key. Identify a USP or differentiating factor to showcase your products or services. UAE is a a relationship driven market and face-to-face contact is a lot more effective than virtual communication.

Dipti Vaidyanathan is the Trade Manager – Tech Sector at The British Centres for Business UAE

www.bcbuae.com