UAE start-ups must stay ahead of the curve

Innovation critical to meet the challenges, says Andrea Di Anselmo, the president of INSME.

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Start-ups need to innovate faster than other sectors of the economy, and investors, banks and governments have to better understand this requirement, according to the International Network for Small and Medium Sized Enterprises (INSME).

"They will be the SMEs of the future and now they are facing challenges connected to the speed of change," said Andrea Di Anselmo, the president of INSME. "They need to innovate at a pace which is faster than usual. They need access to knowledge, global markets and innovative forms of finance. Loans and guarantees are important, but venture capital, business angels are more important."

Mr Di Anselmo was speaking yesterday at Khalifa Fund's 10th INSME on Yas Island. The UAE is investing heavily to promote the growth of small and medium enterprises in a bid to diversify the country away from its dependence on oil and gas.

Policymakers have focused on the sector’s role to spur job creation and grow the non-oil economy.

“Financing options are not as developed as in the West and people are not very familiar with all the contractual forms of financing and the appetite for venture capital is not fully developed yet – but its growing,” said Mohamed Hamdy, a UAE-based angel investor.

“You’re starting to hear VC funds raising money and trying to deploy capital in the start-up phase. But the pool is not deep enough, and it’s a unique asset class from what we’re used to – which is private equity.”

halsayegh@thenational.ae

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