The development direction of the UAE
The United Arab Emirates is attempting to break the stereotype of the Middle East as solely an oil region, concentrating instead on developing its technology and startup sector.
In the first six months of 2022, the Middle East region saw an impressive increase of $530 million in investments, with 354 deals made – a 64% growth rate compared to the same period in 2021. The UAE was the major recipient of venture capital in the Middle East and Africa, with 46% of the total funds coming to the country, according to the Ministry of Economy.
TechCrunch reported on the technological advances in the United Arab Emirates, such as the $800 million investment in space initiatives, the world’s largest vertical farm, and the investment in the prop-tech startup Huspy.
In 2017, the United Arab Emirates set up a ministerial post for AI and appointed H.E. Omar bin Sultan Al Olama, who had prior experience in the banking and telecoms industries, to the position. During my interview with him, he shared his insights on the emerging UAE startup and venture capital scene as well as the country’s tactics in drawing in American venture capital. Here are some of the edited highlights from our exchange.
Venture capital in the UAE
Upon examination of the geography, it is clear that the UAE accounts for more than half of all venture capital investments in the entire region. This is an impressive feat, but it becomes even more fascinating when you consider the size of the population. There is a high concentration of highly skilled people, as well as the infrastructure to support the growth of successful startups that have the potential to expand and develop.
The amount of investments this year has far surpassed our expectations. Over the first six months, $1.73 billion was invested into the Middle East with 37.2% of it going towards UAE ventures alone. If you look at investments from 2021 to 2022, January saw a 2.5-fold increase whereas February and March experienced a 1.5-fold surge in investment followed by an upturn of 1.4 times in May and June demonstrating a growth rate only slightly lower than its predecessors at 0f 1.2 times.
What Strategies Are Being Used to Attract Tech Companies to the UAE?
The UAE is known for its attractive benefits, such as no taxation. This has made it a go-to financial hub in the region and one of the most lucrative places to invest globally. Investors appreciate its system of transparency as provided by government legislation that does not limit business opportunities due to ethnicity, sex or nationality. It is a welcoming atmosphere where individuals of all backgrounds and nationalities can prosper without fear of prejudice or disadvantage due to their race, gender, or place of origin. Overall, this creates an environment conducive to success and economic prosperity regardless of who you are.
Analyzing the various elements of the startup ecosystem that could be incentivized to make launching a business in the UAE more attractive than in other countries. The government created visas allowing people working specifically in digital economies to gain permanent or long-term residency quickly, and streamlined processes so companies can be established within just one day. Additionally, It provided access to programs such as incubators, accelerators and government contracts which serve as further incentives for entrepreneurs.
As the UAE moves forward in incorporating Artificial Intelligence into its culture, there is an underlying question of what exactly will this mean for the quality of life. While economic gain isn’t always a key factor when it comes to integrating AI into everyday lives, having policies and legislation that protect against any potential negative outcomes is imperative. We spoke with experts to get their thoughts on how best the UAE should move forward in ensuring AI creates a positive future.
May 18, 2023