Navigating Dubai’s next chapter of growth
Majed Al Suwaidi is the managing director of Dubai Media City and lead of in5
Startups have always played a crucial role in the social and economic development of Dubai and the UAE. While they were dealt a blow by the pandemic, their agility and skill helped the country respond effectively to the global health crisis. They also raised millions of dollars in investment during the first six months of the year, suggesting venture capital activity could continue unabated as we gradually return to normal.
This is a somewhat bullish outlook considering the continued economic uncertainty. But it is also entirely plausible if we stick to a few simple rules, namely: developing homegrown entrepreneurs by creating an enabling ecosystem with world-class infrastructure, networking, mentorship, training opportunities, and access to investors. This creates sustainability and resilience, ensuring Dubai continues to be a home to great success stories.
The business case for developing environments focused on community-building, incubation and scale for startup and SMEs is clear. Combined, these sectors contribute up to 40 per cent of the Middle East and North Africa’s (Mena) gross domestic product and 50 per cent of its employment opportunities, according to the International Monetary Fund.
The industry is an engine of growth and technological advancement that local and international angel investors, venture capitalists and corporate lenders remain keen on tapping into.
During the first six months of 2020, in5 members raised more than Dh65 million in direct investment through multiple funding sources. After generating more than Dh400 million between 2013 and 2019, the half-year figure is the highest six-month amount generated by in5 startups since we established the enabling platform seven years ago.
On top of this, we welcomed 41 new companies onto the incubation programme in the first six months of the year, bringing to the total number of active startups at in5 to 216.
And we are also not the only ones to witness healthy investment activity against a backdrop of uncertainty and headwind, with several reports highlighting significant six-month investment growth for Mena-based startups.
This goes to show that the Middle East has created an enabling environment for startups and entrepreneurs – and their success during such testing times is encouraging as markets get moving again. But where do we go from here, and how do we create the perfect ecosystem in the post-pandemic world?
Navigating Dubai’s next chapter of growth – one rooted in resilience and innovation – will require the continued development of the unique kind of environments catalysing the creation and evolution of highly scalable and sustainable companies. We need to create entrepreneurial communities supported by an array of independent organisations and individuals collaborating, interacting and spurring one another on.
This starts with a framework that helps entrepreneurs take their idea from concept to prototype to market. Of course, there is no one-size-fits-all approach because startups and entrepreneurs require different things subject to their business needs. Broadly, though, companies at the pre-seed and seed stage require incubation and simplified business setup to obtain a trade licence and visas.
In conjunction to this, you need to provide mentorship, networking and training opportunities. Now more than ever we have recognised the importance of infrastructure; you can have the best idea in the world, but it will get nowhere if you do not have good office space, roads, electricity, water access, mobile services, and high-speed internet. With investors in cash-preservation mode and startups facing similar uncertainty, we’ve continued to invest in infrastructure and equipment to provide entrepreneurs from across the region – and further afield – with everything they need.
Across our three innovation centres – in5 Tech, in5 Media and in5 Design – we have continued to develop and improve our physical and digital infrastructure, creative co-working spaces and state-of-the-art facilities.
At in5 Tech, launched in 2013 in, we have established a lab that offers access to technology and devices to help members and startups leverage cloud computing, robotics, 3D printing, artificial intelligence, virtual reality, and other Fourth Industrial Revolution technologies. in5 Design, introduced in 2017, features prototyping labs with state-of-the-art systems and machinery for designers working with metals, wood, plastics, textiles and exciting new materials. Introduced in the same year, in5 Media has advanced audio and video recording studios, high-end production facilities and a green room designed to support creative talent.
This infrastructure helps entrepreneurs and startups create new products and services, but effective ecosystems need to provide avenues to affluence. We’ve created a network of more than 100 investors and mentors – led by a steering committee comprised of companies such as Accenture, Microsoft, angel investors, educators and industry experts. This team provides advice and guidance on a range of topics including burn rate and capital deployment to law, marketing and strategy. It's complemented by regular advisory sessions led by organisations such as IBM who share big-business expertise on staying ahead in a competitive market.
Such knowledge is imperative for the startup community which, despite raising significant funds this year, still faces revenue and burn-rate challenges. By providing training and development, networking and mentorship opportunities, physical and digital infrastructure and streamlined business setup services, talent has a platform to grow.
As ecosystems pivot and evolve during these exceptional times, developing skills and attracting homegrown and overseas talent is critical to the growth of startups and SMEs. Consequently, this becomes critical to the performance of regional economies. We will continue to invest in our ecosystem and work closely with the relevant authorities to improve rules and regulations to provide simple and seamless setup processes that improve ease of doing business here and enable local and international startups to establish themselves in one of the world’s most liveable cities.
Navigating Dubai’s next chapter of growth will require the innovation of entrepreneurship to build on the UAE’s knowledge-based economy and create an ecosystem fit for the post-pandemic world.