Life after COVID: Dubai Future Foundation charts plans for entrepreneurs

Dubai: Empowering startups and entrepreneurs and promoting digital economic activities are critical for the future of a sustainable economy at both national and global levels, the Dubai Future Foundation said in its 5th report on the future of entrepreneurship and innovation launched jointly with the Dubai Future Council for Entrepreneurship and Innovation Ecosystem.

The report, titled ‘Life After COVID-19: Innovation and Entrepreneurship’ is part of a series of forward-looking reports to tackle the different challenges that the UAE and the Arab world will face once the pandemic subsides.

The series comes at a crucial time when public and private sector organisations need to be well-prepared for the future and the challenges and opportunities that come with it.

Based on the recommendations and proposals of the members of the Council, the report tackles current and future challenges of the entrepreneurial and startup sector at a national and global level. It also highlights mechanisms to reduce the effects of the spread of COVID-19 on startups and their growth opportunities and suggests motivational packages and incentive schemes as a means to support the startup sector and economic development in the country.

Entrepreneurship in the UAE

The report states that the COVID-19 crisis will impose real challenges on startups in the UAE as is the case globally, However, the UAE is one of the countries best prepared to deal with future changes in the innovation and entrepreneurial sector. Small startups constitute about 50 per cent of companies registered in Dubai and represent about 47 per cent of the UAE’s annual GDP.

According to the 2019 MENA Venture Investment Report, the UAE attracted the largest share of inward venture funding in the MENA region, accounting for 60 per cent of the total, followed by Egypt and Saudi Arabia with 14 per cent and 9 per cent respectively.

The future for startups

Startups and entrepreneurs are working to adapt to the new situation by shifting towards fundraising via digital channels. MAGNiTT revealed that its online tool to raise funds for startups has seen an increase in requests for financing emerging projects by 117% per month since last January, which can be attributed to companies looking for alternative ways to raise funds during the current crisis.

According to an independent survey conducted by MAGNiTT Research, 59% of the founders of companies in Arab countries announced that their businesses were affected by the crisis, while 48% said achieving revenues is their main concern and 53% are opting for a strategy shift amid the pandemic to sustain and grow their business.

Challenges ahead

The report highlights the incentives that the UAE has initiated to support startups and entrepreneurs as it acknowledges the pivotal role that small and medium enterprises play in various economic fields. The UAE promotes innovation and sustainability of the entrepreneurial sector by facilitating the issuance of commercial licenses and visas as well as managing cash flows and increasing reliance on the concept of working remotely. The UAE has also kept pace with rapid changes in the technology and innovation sector, in addition to updating private legislation and regulations in light of global changes, especially in the health, education and energy sector.

Recommendations

The report offers a number of proposals to enhance the innovation ecosystem in the UAE and the region, which include reducing or delaying office costs, utility bills and license fees as well as offering open grants, providing loans and flexible financing. The report also suggests and promotes the concept of funding salaries for a short period of time, reducing living costs, increasing mobility across visas and free zones for highly skilled talents and supporting temporary employment as means to support the startup sector.

Support and financing

The report argues that government support for startups will restore the sector to pre-crisis levels once the COVID-19 pandemic recedes. It says the innovation sector will have a catalytic role in supporting the growth of startups and entrepreneurs in the UAE by enhancing financing and providing low-cost financial services.