The environment for startups has always been competitive and besides the challenges of getting funding and finding the right talent, founders often struggle to gain a foothold in their markets.
Add to this the growing competition in places like Hong Kong, London, New York, or Silicon Valley, and, amazingly, any startups can get off the ground. However, a new launchpad for startups has begun to emerge – the UEA. The country has become such a popular destination that it has even earned the Silicon Valley of the Middle East.
This might be a bit of hyperbole, but the truth is that the environment for startups in the UAE is one of the world’s best. One big reason for this is the country’s business-friendly environment. Another reason is that the country has become a hub for research, education, and even advanced manufacturing.
Add to this the fact that the region is home to some of the wealthiest family offices and sovereign investment funds, and it easy to see why startups are flocking to this oasis in the Arabian desert.
While Abu Dhabi and Dubai tend to get most of the exposure, other emirates do their part to spur innovation. This includes Sheikh Saud bin Saqr al Qasimi, the emir of Ras Al Khaimah, who has invested close to $2 billion to upgrade the emirate’s healthcare system. Granted, much of this investment was in hospitals, clinics, and laboratories, but the Sheikh has also led investments in healthcare-related technologies.
Projects such as these prove that founders can not only work on their startups in the UAE, but they can also find lucrative markets for their solutions. This creates a win-win as founders get the flexibility in ownership and tax structures, as well as access to capital. At the same time, the citizens of the UAE get the opportunity to benefit from cutting edge technologies.
This has helped the country to continue to climb the Global Innovation Index. Of the 128 countries measured by the index in 2016, the UAE ranked 41st. In fact, the country ranked 7th in Asia. Based on current trends, it is quite likely that the UAE will crack the Top 40 most innovative countries in the world this year and might even catch up with countries like Malaysia and Latvia in the next few years.
Part of the reason for the rapid rise in the Global Innovation Index is the combination of investments in education and digital infrastructure and the UAE’s increasingly important role in global financial markets.
Both trends have helped to raise the country’s competitiveness, and more importantly, the UAE is not home to many of the companies which are changing the global marketplace. These include startups focusing on technologies such as blockchain, artificial intelligence, and even drug discovery.
Another asset that helps the UAE is its connectivity. This not only includes digital connectivity but also trade links and the infrastructure within the country. The UAE is strategically situated on the Persian Gulf, and the country is within a six-hour flight of nearly half of the world’s population.
The country also has a long tradition of entrepreneurship, and this spirit of independence and interest in business has begun to draw attention. Recently Forbes highlighted the most promising startups. While many of these were located in Dubai or Abu Dhabi, some of these startups were operating in some of the lesser-known emirates, such as Ras Al Khaimah.
It’s not just startups who are flocking to the UAE. Google recently announced that the company would be setting up an Innovation Hub in the country. One of the launch goals is to enable students and teachers in STEM (Science, Technology, Engineering, and Math) subjects. This upskilling will help Google hire more local talent, which will be the catalyst for more startups in the country.
Given these trends, it is easy to see why more startups are coming to the UAE. The country is modern, well-connected, innovative, market-oriented, and importantly, where startups can get funding. Another trend is that startups are finding out that the UAE is not just Dubai or Abu Dhabi but also includes smaller emirates like Ras Al Khaimah. In the end, this makes the UAE the destination of choice for founders to work on their startups.