No Fear

How will Dubai SME help nationals increase their presence in Dubai’s workforce?

Dubai SME’s primary role is to encourage and enable Emiratis to start a business and be owners of businesses as an alternative to seeking employment in the public sector. Over the last 10 years, we have seen more Emiratis setting up businesses that, in many instances, have thrived. In 2013, with the establishment of the Mohammed Bin Rashid Fund (MBRF) at Dubai SME, we will devise schemes to encourage more locals to start their businesses with financial support. As with our current funding approach, Dubai SME will continue to enhance ways to enable the Emirati entrepreneur to be effective and skillful in setting up a business. Other major initiatives to enhance the Emiratization of business will focus on capability development. Our entrepreneurship diploma is very popular with the Emiratis who are committed to attend and learn the fundamentals of setting up and running a business.

How important are SMEs to the economy?

The Dubai SME sector, like in most other economies, is extremely important. It contributes 40% of Dubai’s annual GDP and accounts for 42% of the Emirate’s workforce. Dubai’s diversified economy is based largely on SMEs, which serve many parts of the industry value chain. Dubai’s SMEs have also been the bedrock of stability in times of crisis, and are a source of entrepreneurship, innovation, and new business model creations. The real economy grows when the SME sector grows. In 2012, the Department of Economic Development in Dubai issued 16,688 business licenses, up 16% from the previous year, while license renewals increased 3% to reach 101,766. Given the business categorization in Dubai, the increase in license transactions clearly points to rising SME activity and the continued sustenance and stability of the local SME market.

What new developments will be happening at Dubai SME in 2013?

There are several big initiatives in the process of being launched in 2013, including breakthrough changes in some of our existing initiatives. First, we are about to launch our very own fund—the MBRF—to support more Emiratis to start and launch their businesses. It will cover three components, depending on the stage and need of the entrepreneur. For early stage ideation, we will provide seed grants to transform ideas into testable and executable businesses. The grants will cover such allowable costs as market feasibility studies, purchase of equipment, and engaging consultants for feasibility studies. Another component of the fund is the loan-guarantee scheme. A couple of partner banks will provide the credit due diligence based on our feasibility studies. The banks will also be incentivized to support local SMEs through a fund that will be leveraged by the bank to support more SMEs. A final component we are planning is equity, in which the MBRF takes a stake in selected start-ups and/or high-potential SMEs, founded on a development objective that is based on a fair return for a future sell-off to investors. Another major initiative is the second cycle of the SME100 ranking initiative. Our success in the first ranking and the post-ranking work has yielded very positive pay offs. To date, we have reached record levels of more than 3 million SMEs being nominated and more than 300 SMEs applying with full submission of three-year audited financials. The ranking will be announced in October or November 2013. We are delighted and honored that HH Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai’s Executive Council, is the Patron of the Dubai SME100.

Thirdly, we are expanding the Young Entrepreneur Competition (YEC) competition, currently in its ninth year, to reach out and educate our next generation of entrepreneurs who are now in schools.