Abu Dhabi Model Economies: Entrepreneurism, education, innovation and diversification lie at the root of the capital's Economic Vision 2030.
Abu Dhabi's vision of the future is well on the road to reality
On the surface, Hiba Abu Seedo may seem like just another entrepreneur.
But the Al Ain resident is a crucial part of a carefully crafted plan for the economic future of Abu Dhabi.
When the Abu Dhabi Economic Vision 2030 was rolled out in 2009 to highlight a new strategy for diversifying the capital's economy away from oil, numerous organisations started realigning their own plans with the goals of the Government.
Abu Dhabi University set out to create a unique educational centre to incubate new businesses, grow existing small and medium-sized enterprises (SMEs) and boost the overall number of entrepreneurs in the region. The end-result is an Innovation & Entrepreneurship Centre, which offers a courseon how to start a new business, which Ms Seedo recently completed.
"We have built our plan on the … plan," says Rima Shaban, a manager of the centre. "We're trying to encourage our students and faculty to turn their outcomes of studies into real businesses. We're trying to get them to commercialise these ideas," Ms Shaban adds.
Ms Seedo, who has taken information technology courses and is now focusing on creating a company that sells apps for electronic gadgets such as mobile phones and tablets.
"I want to start my own business developing mobile applications," she says.
Yet it's not enough that Ms Seedo is hoping to launch a new venture. According to the 2030 Vision, Abu Dhabi aims to fuel the growth of a more diversified economy and reduce its relatively high dependence on oil, as well as the cyclical swings that accompany its reliance on the resource. Arriving at that goal requires increasing productivity in a high-tech, knowledge-based economy. That is where business ideas from individuals such as Ms Seedo come into play.
She's understandably tight-lipped about new ideas in the pipeline, although a working prototype of her most recent app creation - iDrive, which filters calls while users are driving in a bid to curb local road accidents - was one of the winners at the latest Mobile Application Contest organised by the Khalifa University of Science, Technology and Research.
But while conceptual seeds for new ventures are taking root, they need far more in the way of initial support to grow into viable businesses, experts warn. Some of the biggest hurdles for aspiring entrepreneurs include high setup costs and the length of time it takes to get a trade licence and approval from the right agencies, says Vikram Venkataraman, the director of Salvus Strategic Advisors, a consultancy that helps SMEs find capital support and launch in the UAE.
"Startups should have low costs for setting up and a single-window clearance [with] an easy licensing system, because time is money for a small entrepreneur," he says.
"If you're going to make him run around like a headless chicken for licences for one week [or] two weeks, that's gone for him. That's huge."
Currently it takes an average of 15 days to officially start a new venture in the Emirates, which is significantly longer than the averages of one week in Norway, three days in Singapore and a single day in New Zealand. Compared with other countries around the world, the UAE ranks 76th overall when it comes to the number of procedures required to begin a business, according to a report released this year by the World Economic Forum and the Insead business school.
"I think nations are looking to the private sector and, in particular, startup companies to create jobs and support the economy," says Elizabeth Williamson, an associate at Clyde & Co, a legal consultancy with offices in the UAE. "Some countries are assisting SMEs by exempting them from certain legislation" and trying to "reduce the amount of red tape faced by businesses", she adds.
The UK recently exempted businesses with fewer than 10 employees from new domestic regulation for three years, while Germany's lack of restrictions on smaller firms makes it easier for business owners to lay off employees who are not pulling their weight. "There's certainly an argument that simplifying legislation for those running SMEs will actually allow them to do just that [run them]," says Ms Williamson.
"I hope for the sake of SMEs that this trend continues."
To prepare for the plan, as well as to glean more insight on fostering entrepreneurship and boosting the number of startups, officials from Abu Dhabi examined and sometimes travelled to some of the most business-friendly countries around the world.
"My team has looked at programmes from different areas such as Singapore, Australia and the UK, and they have seen what has come up [in] those countries and put together a programme that is very suitable for us in Abu Dhabi," says Fahad Saeed Al Raqbani, who is the director general of the Abu Dhabi Council for Economic Development and helps oversee the Akoun programme, which fosters entrepreneurship among Emiratis in the capital.
Mr Al Raqbani says the Government is "not in the copy, paste environment completely. But we will look at successful countries … and take what best fits with our culture in order to help [entrepreneurs] in the best way.
"We always look forward to improving the business environment in Abu Dhabi, whether for entrepreneurs or general businesses."
A number of programmes have been started to spark growth within the local SME sector. Akoun, which aims to motivate students to become entrepreneurs, recently ran a competition where the most unique business ideas from young people were awarded funding support.
The organisation has partnered regional entities including the Abu Dhabi Chamber of Commerce and the Western Region Development Council to help spread its message throughout the region. Another important ally, the Khalifa Fund for Enterprise Development, also provides funding for new ventures from Emirati entrepreneurs. It launched four years ago with a total capital investment of Dh2 billion (US$544,529).
"I don't think we need a new programme in place to support the UAE nationals," says Mr Al Raqbani. "I think what we need is more awareness [about existing programmes].
"Having a programme in place is one thing, but having the people aware of the programme is something different. The more people [who] know about the Khalifa Fund and Akoun, the more our objectives are going to be met."
While providing enough seed money to support the creation of new firms is certainly one of the main focuses of the Khalifa Fund, the organisation along with Akoun is also making an effort to provide forums and advisory services to help mentor new entrepreneurs. And their partners are getting involved; the Centre of Innovation & Entrepreneurshipat Abu Dhabi University offers mentoring workshops where entrepreneurs in training programmes can access free advice from veterans in the business community.
"Abu Dhabi in [the 2030] plan is planning to support early startups quite substantially," says Vishnu Deuskar, the managing director of Salvus, an SME advisory company.
"But [entrepreneurs] need to organise themselves, approach the business properly [and have] financial discipline. All these things are also important," he says.
"Not having funding is definitely one of the major issues, but it's also like a whipping boy - because it's easy to say, 'it doesn't develop because there is not enough money'."