Long before oil turned the UAE economy into one of the world's strongest, the nation's economic foundations consisted of entrepreneurs trading with clans in the Gulf and on the subcontinent. Now Abu Dhabi's leaders want to resurrect that commercial past, Dh5 million (US$1.36m) at a time, through grants from the Khalifa Fund for Enterprise Development.
The Dh1 billion fund, which is supported by the Abu Dhabi Government, aims to support local entrepreneurial efforts while enlarging the nation's economy beyond oil and gas. The Khalifa Fund has disbursed Dh391m in financing from its inception three years ago, Hussain al Nowais, its chairman, said yesterday. Building a strong entrepreneurial class is important for a thriving economy. In most developed economies, small to medium-sized enterprises (SME) employ most workers and tend to fuel the creation of other start-ups, which creates a virtuous growth cycle.
In particular, the Khalifa Fund is targeting Emirati entrepreneurs who have plans to create manufacturing companies. The fund will provide financing of up to Dh10m for these kinds of industrial projects, twice the amount available generally, said Mr al Nowais, who also serves as the head of a number of major government companies including Abu Dhabi Basic Industries and Union Railway. The organisation currently limits funding for each project to Dh5m but will increase the ceiling to Dh10m for manufacturing projects.
The emphasis on supporting the formation of more industrial companies is meant to bolster production and manufacturing industries in the capital, which is in line with the Abu Dhabi Economic Vision 2030. The Government's strategic plan identifies engineering and construction, tourism, information technology, food and beverages, metals and petrochemicals as sectors for investment. As of April, the fund had received more than 4,000 applications for entrepreneurial projects since its inception. It had approved 211 of those, giving out Dh346m in loans to young entrepreneurs at that time.
The 219 projects assisted by the Khalifa Fund to date have spanned various sectors, all with a goal of diversifying the emirate's economy away from oil export revenues. Mr al Nowais said the government was also committed to supporting entrepreneurs who did not receive money from the fund. "In line with this, we are extending our services through a new membership programme, which includes non-finance-related services such as complimentary fees for conducting business, helping acquire government tenders, opening business opportunities and connecting projects," he said.
The fund has also organised more than 100 training workshops, which have attracted about 1,600 UAE nationals in Abu Dhabi, Al Ain and the Western Region. The fund's work was endorsed yesterday by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. Sheikh Mohammed said the diversification of the economy required a comprehensive strategy emphasising the development of SMEs. The fund should employ "modern tools and methods in developing the skills of the beneficiaries", he said.
Institutions of higher education have also begun efforts that complement those of the Khalifa Fund in supporting start-up activity, largely by fostering entrepreneurship at an early stage, encouraging students to formulate small business ideas and devise ways of commercialising them. Abu Dhabi University announced it had formed a Centre of Excellence for Innovation and Entrepreneurship to be an "incubator" for ideas for small technology-related ventures, seeding funds for small business projects, building prototypes, training and mentoring, and easing networking.
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