Small slice of a bigger picture

What can the size of a pizza delivery area tell you about the health of the economy? Quite a lot, it seems.

Ian Ohan, the GCC area developer and owner of NKDPizza, has seen his business grow. Pawan Singh / The National
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It may seem like a strange indicator, but Ian Ohan knew Dubai's economy was getting back on track simply by studying his company's delivery areas.

The data showed that more people had moved in throughout the year, while takeaway orders grew and rents rose.

While the last factor may not be particularly good news for Mr Ohan, the GCC area developer and owner of NKDPizza, they all point to a stronger economy and better business environment.

And they also suggest something else: that the successes - or struggles - of some small and medium-sized enterprises (SMEs) act as a barometer for the wider economy.

"We have probably seen a 15 to 20 per cent increase in the residential population base in our [three] delivery areas," said Mr Ohan, who appeared at an event organised last week in Dubai by Al Tamimi Investments for aspiring entrepreneurs.

Ravi Bhusari, the co-founder of Duplays, a website that organises sport leagues and events in the Emirates, said the business expanded substantially throughout this year, driven in part because people have still been moving here.

"Sport is pretty recession-proof, so although a lot of people have looked to scale down where they live or cut back on expensive brunches, sport is still part of their diet," he said.

Next year will continue to be competitive, and businesses need to remain responsive. But the UAE is heading in the right direction, according to the experts.

"The UAE is on the right track and will achieve steady and consistent growth [throughout] 2012," said Jitendra Gianchandani, the chairman and managing partner of Jitendra Consulting Group.

But what do the small business owners think?

Most agree the Emirates will benefit from events elsewhere in the region.

"My personal opinion, and I think it's a well-known theory here, is that Dubai is a net beneficiary of the Arab Spring and instability in the region. So I think we will probably see a lot more Arab expats moving to Dubai," Mr Bhusari said.

Both NKDPizza and Duplays plan to expand next year, perhaps a sign of confidence in the economy.

But research by Duplays, which also organises corporate events, suggests that while consumers may be spending, some companies are still keeping a tight hold on the purse strings.

"We have been pitching to companies … over the last say month, month-and-a-half as they're setting their budgets for the next year and it seems pretty consistent from this year," said Derv Rao, the co-founder of Duplays.

"It doesn't seem there's a big slash but they're also realising that their employees have to feel good about working given the turmoil that's going on everywhere."

Entrepreneurs welcomed efforts by the Government to improve the business environment, including the bankruptcy law unveiled recently. But Mr Ohan questioned whether the impact would be immediate.

"I don't think there will be much of an impact from 2012," he said. "I think it will be a lift in sentiment because the Government is making these efforts."

Other entrepreneurs called for more legislation specific to SMEs to make it easier for start-ups.

"As a small business we have to pay the same amount of money to start a business as a multimillion-dollar company," said Mohamed Parham Al Awadhi, who co-founded the shawarma restaurant chain Wild Peeta with his brother Peyman.

"We have to have the same resources as a much larger company to operate so it's highly expensive and highly bureaucratic and unfortunately a lot of small businesses close down because of it."

Banks are increasingly catering to small companies. Government business development agencies such as Dubai SME are helping to improve the environment for entrepreneurs, but the Emirates still has a "long way" to go, Mr Al Awadhi said.

"The problem is if the small business legislation is not implemented fast enough, some of the greatest ideas to come out of the UAE will die before anyone learns about them."

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