25 January 2012
No matter how they are defined, small and medium-sized enterprises (SMEs) dominate the UAE economy. In the UAE, and across the Gulf Co-operation Council (GCC) and Middle East and North Africa (MENA) regions, they will account for the vast majority of the new jobs that are created.
This matters a lot, because the demographics of the MENA region are such that the numbers of young people seeking work will surge in coming years. All the governments in the region face this major strategic challenge: if there is not significant job creation over the next 10-20 years, the governments face the prospect of a surge in political unrest that is fomented by angry, unemployed/under-employed and often quite well educated young people.
The real and enormous achievements of the GCC governments in terms of their countries' economic development obscure a crucial fact: entrepreneurs who want to establish new businesses - which are invariably SMEs by some relevant definition - face considerable obstacles.
In the UAE, the obstacles include a lack of finance. There are also - by European or North American standards - a lack of official incentives. The government does not have income tax revenue that it can recycle to entrepreneurs. This means that entrepreneurs have to bear substantial upfront costs such as licensing fees and visa fees. These expenses - and the costs of hiring office space that may not be needed - are higher than in other countries.
These and other issues relevant to the SME sector were discused at a roundtable of panelists, which included senior executives from Gulf Finance, HSBC, Envestors and Next Level. Two successful SMEs based in the UAE, Zawya and WMS Metal Industries, were also represented at the roundtable and their experiences of setting up and growing their businesses helped to make the discussion insightful and rewarding.
Click here for the full report: Insight Discovery: SMEs and Aggressive Growth - What are the Challenges that Need to be Overcome? (Jan-12)
Zawya 2012
No matter how they are defined, small and medium-sized enterprises (SMEs) dominate the UAE economy. In the UAE, and across the Gulf Co-operation Council (GCC) and Middle East and North Africa (MENA) regions, they will account for the vast majority of the new jobs that are created.
This matters a lot, because the demographics of the MENA region are such that the numbers of young people seeking work will surge in coming years. All the governments in the region face this major strategic challenge: if there is not significant job creation over the next 10-20 years, the governments face the prospect of a surge in political unrest that is fomented by angry, unemployed/under-employed and often quite well educated young people.
The real and enormous achievements of the GCC governments in terms of their countries' economic development obscure a crucial fact: entrepreneurs who want to establish new businesses - which are invariably SMEs by some relevant definition - face considerable obstacles.
In the UAE, the obstacles include a lack of finance. There are also - by European or North American standards - a lack of official incentives. The government does not have income tax revenue that it can recycle to entrepreneurs. This means that entrepreneurs have to bear substantial upfront costs such as licensing fees and visa fees. These expenses - and the costs of hiring office space that may not be needed - are higher than in other countries.
These and other issues relevant to the SME sector were discused at a roundtable of panelists, which included senior executives from Gulf Finance, HSBC, Envestors and Next Level. Two successful SMEs based in the UAE, Zawya and WMS Metal Industries, were also represented at the roundtable and their experiences of setting up and growing their businesses helped to make the discussion insightful and rewarding.
Click here for the full report: Insight Discovery: SMEs and Aggressive Growth - What are the Challenges that Need to be Overcome? (Jan-12)
Zawya 2012
