YES MINISTER

Abu Dhabi 2017 | ECONOMY | VIP INTERVIEW

TBY talks to HE Eng. Mohammed Ahmed Bin Abdul Aziz Al Shehhi, Undersecretary of the Ministry of Economy of the UAE, on the country's foregrounding of innovation, the Bankruptcy Law, and job creation.

The UAE leads the way in innovation in the Middle East. Which sectors have benefited the most from investment in innovation?

Establishing a culture of creativity, knowledge, and innovation in the country is crucial to our socioeconomic development. Ever since the government began laying the foundation for an environment that encourages knowledge and innovation, we have seen higher interest in entrepreneurship. As a direct result SMEs and start-ups are getting access to much-needed funding. Efforts for human capacity building, especially among citizens, have been ramped up to complement economic growth. Knowledge and innovation play a crucial role in the country's efforts to diversify its sources of income as well by building an industrial environment fueled by knowledge, innovation, modern technology, and scientific R&D. Additionally, sustainability is improved through the enactment of important policies aimed at promoting faster industrial growth in line with the UAE Vision 2021. All sectors are fully committed to the UAE's bid to create a knowledge- and innovation-driven economy thanks to their proven benefits. At the Ministry of Economy, for instance, we have launched 12 relevant initiatives and 39 projects covering a wide spectrum of creative developmental activities, specialized micro-projects, and manufacturing and research initiatives. As I have mentioned, the process of building a strong foundation for fostering knowledge and innovation is already in full motion, and we can already see positive results.

With a 16% share of the national GDP, the industrial sector has been positioned as a beacon of economic diversification. What have been the major advances made by the UAE in this regard over the past year?

In 2016 we witnessed a high-performing and vibrant local industrial sector thanks to key government policies such as the economic diversification strategy. The sector's core areas have remained resilient despite global uncertainties, in part due to this all-encompassing strategy, which also seeks to reinforce the performance and efficiency of the local business community. The UAE is now in fact the third most efficient market in terms of goods, which could be viewed as the result of our government's efforts to reduce our reliance on oil. The non-oil sector's GDP contribution in 2015 climbed to about 77% at current prices and 70% at constant prices. Economic diversification, along with the sustainability policy, has become more embedded in our various developmental programs and initiatives. For our part, the Ministry is fully committed to doing its share by continually supporting investment spending on strategic and value-added projects.

The newly implemented Bankruptcy Law has raised expectations regarding better practice for indebted SMEs and tighter regulations to guarantee a more competitive economic environment. What is your view of the impact of this law on the national economy?

The government has enacted this law and undertaken other measures precisely to fuel the growth of SMEs, which are considered the backbone of the local economy. Increased incentives, the establishment of a common definition for SMEs, and the provision of modern facilities and benefits tailored to fit the needs of SME owners and local entrepreneurs have been put in place to spur sectoral growth. Moreover, the approval of the Executive Regulations to the Federal Law on SME projects to incentivize local businesses and provide them with access to funding has further stimulated its expansion. The Ministry of Economy has forged strategic partnerships with various countries to further invigorate the SME sector, improve its competitiveness, ensure its sustainable growth, and widen its reach by facilitating its entry to new foreign markets, with an emphasis on innovation, technology, and knowledge.

What are the economic prospects of the ongoing plan to build a vibrant knowledge-based economy in the UAE in terms of job creation, attracting young entrepreneurs, and contributing to the country's economic diversification?

At the Ministry, we seek to highlight the role of industrial innovation in building a sustainable and knowledge-based economy in the UAE. This reflects our belief that innovation is vital to the country's ongoing diversification plan and the development of key economic activities such as job creation and entrepreneurship. All our efforts are geared toward putting the UAE in the top-10 countries on the Global Innovation Index, in line with UAE Vision 2021. The UAE has already achieved significant milestones and progress in its journey towards economic prosperity as evidenced by its inclusion in the 2016 Global Innovation Index. The country is now considered to be at the forefront of comprehensive economic development across the region. Furthermore, in terms of fostering a culture of creativity and innovation in the country, the Ministry of Economy has opened the state-of-the-art International Centre of Patent Registration (ICPR) in collaboration with its South Korean partner. Aside from overseeing the registration of patents in the UAE, the new international center will also conduct a skills development training program for professionals in the field of intellectual property as well as pursue research on relevant topics.