An Agency of the Department of Economic Development – Government of Dubai

Dubai Entrepreneurship & SME Development Agenda:

“Creating Real Value for Sustainable Economic Development”

Presented By

Essam DisiDirector – Strategy & Policy

Mohammed Bin Rashid Est. for SME Development (Dubai SME)

An Agency of the Department of Economic Development – Government of Dubai2

DUBAI SME – An agency of the Department of Economic

Development – Government of Dubai

An Agency of the Department of Economic Development – Government of Dubai

Introduction

Dubai SME was Established in 2002 by

H.H. Sheikh Mohammed Bin Rashid Al Maktoum

Vice president and Prime minister of UAE, Ruler of Dubai

Goals:

- To promote entrepreneurship and risk taking culture among young Emiratis

- To provide startup support to Emirati entrepreneurs and encourage new concepts and innovations.

- To diversify the economy towards more private sector participation of Emiratis in business

- To position Dubai as the Global Entrepreneurship Hub

An Agency of the Department of Economic Development – Government of Dubai

The Dubai SME Definition

Micro

Small

Medium

Trading

< = 9

Employees Turnover

< = AED 9 mn&

< = 35 < = AED 50 mn&

< = 75 < = AED 250 mn&

Manufacturing

< = 20

Employees Turnover

< = AED 10 mn&

< = 100 < = AED 100 mn&

< = 250 < = AED 250 mn&

Services

< = 20

Employees Turnover

< = AED 3 mn&

< = 100 < = AED 25 mn&

< = 250 < = AED 150 mn&

According to DSC Database:

SMEs count for 95% of the total enterprise population in Dubai SMEs employ around 42% of Dubai’s workforce SMEs contribute 40% of Dubai’s value add

An Agency of the Department of Economic Development – Government of Dubai

Number of Establishments and Sectoral Distribution

SMEs account for 95% of the business establishments in Dubai, with a majority of these operating in the Trading sector

Micro firms account for 72% of the total business count in Dubai,

followed by Small and Medium firms accounting for 18% and 5%

of the total business count, respectively.

Manufacturing8%

Trading57%

Services35%

Sector-wise Split of SMEs in Dubai

Micro, 72%

Small, 18%

Medium, 5%Large , 5%

Size-wise Split of Business Establishments in Dubai

In terms of a sector-wise split, the Trading sector accounts for

a majority of SMEs, followed by Services (35%) and

subsequently by Manufacturing (8%) .

Source: Dubai Statistics Center

An Agency of the Department of Economic Development – Government of Dubai

GDP Contribution and Employment Distribution of SMEs

SMEs contribute 40% to the GDP and 42% to the total employment in Dubai’s economy

SMEs contribute 40% to the total value-add in the economy. Trading SMEs are the highest contributors to the total value add in the economy.

Source: Dubai Statistics Center

SMEs contribute 42% to the total workforce.Majority of the workforce employed by the SMEs is in the Services sector.

60%17%

15%9%

Gross Value-add by Size of Firms

Large

Medium

Small

Micro

13%

41%

47%

Sector-wise Split of Value-add by SMEs

Manufacturing

Services

Trading

58%11%

16%

15%

Contribution to Employment by Size of Firms

Large

Medium

Small

Micro

16%

51%

33%

Sector-wise Split of Workforce Employed with SMEs

Manufacturing

Services

Trading

An Agency of the Department of Economic Development – Government of Dubai

SME Development Needs

In 2002, Dubai SME conducted a comprehensive study to identify the most critical development needs of SMEs in Dubai.

Based on the study results and inline with government plans, Dubai SME launched the first SME Development 5 years Strategy.

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An Agency of the Department of Economic Development – Government of Dubai

Key Challenges

7 key challenges were identified. Out of these 7 challenges 4 were internal challenges and 3 were external contextual factors.

Internal Challenges

1. Finding new customers / markets

2. Access to finance for growth and development

3. Getting right skilled manpower for business

4. Access to specialized business knowledge (know how / IT)

External Contextual Factors

1. Information about suppliers and customers

2. Clarity on processes to enforce commercial contracts

3. Greater clarity on government policies and procedures

An Agency of the Department of Economic Development – Government of Dubai

STATE of SMEs in Dubai

In 2014 Dubai SME conducted a detailed analysis of the sector and launched the first ever state of SME report to highlight the characteristics of the sector and share it with all stakeholders

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An Agency of the Department of Economic Development – Government of Dubai

Sector-wise State & Characteristics of Dubai SMEs

There are variations in state and characteristics of SMEs across sectors

51% of the SMEs surveyed are exporting to other countries (as compared to 44%

in EU and 18% in New Zealand).

Only 13% of the surveyed SMEs were found to have implemented some level of

innovation. (compared to 23% in both New Zealand and EU-)

Only 26% of SMEs provide need-based or comprehensive training to their employees

Only 24% have a regular KPI-based performance evaluation (63% NZ and 55% UK)

Only 21% of SMEs indicated deployment of advanced IT systems (ERP, CRM)

Only 6% of SMEs surveyed have online ordering capabilities (12% of SMEs in EU)

34% of the SMEs indicated that they have a formal organization structure.

50% of the SMEs indicated that they maintain audited financial statements.

80% of SMEs had used their personal money to finance to start a business.

Only 23% of SMEs have accessed bank finance in the last 5 years (56% need finance)

Only 19% of SMEs in Dubai have a high scalability potential (due to high overhead

structures, coupled with high existing capacity utilization levels)

An Agency of the Department of Economic Development – Government of Dubai

Dubai SME2021 Plan

Based on inputs from all stakeholders and inline with the Dubai 2021 plan, Dubai SME launched its SME2021 Plan

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An Agency of the Department of Economic Development – Government of Dubai

Key Initiatives

Strategic initiatives are grouped under 4 Dimensions:

D1Entrepreneurship

Promotion

D2Ecosystem

Development(policy & regulation)

1. Partnering with regional and int’l stakeholders to promote entrepreneurship 2. Establishing university entrepreneurship centers

3. Advocating on innovation, IP, and productivity policies4. Advocating on assessing the impact of new regulation on SMEs 5. Establishing a platform to voice concerns of SMEs 6. Advocating policies to increase SME access to finance

D3Business

Development Programs

7. Setting up sector based startup advisory services8. Setting up sector based capability development programs9. Developing an SME professionalization program10. Establishing sector focused incubators 11. Promoting an equity financing culture 12. Establishing IP awareness / support program13. Expanding the Dubai SME 100 Initiative & offering targeted growth support14. Developing and Executing an SME EXPO2020 Plan15. Promoting SME products domestically and abroad

D4Research & Statistics

16. Developing a Strong internal database and statistical reports 17. Developing Internationally comparable statistics and macro data on SMEs18. Establishing an Entrepreneurship Research Network

An Agency of the Department of Economic Development – Government of Dubai

Development Advisory

Market Access (GPP)

FundingEntrepreneur

RelationsBusiness

Incubation

Capability Development

Policy Advocacy

Outreach & Marketing (YBL, YEC, Road Shows, Exhibitions)

Services for Emirati Entrepreneurs & SMEs

Bus. PlanStart up advisory

5% with local Gov.10% with Fed. Gov Private Sector

Financial AdvisoryCredit G.S MoUs

TL subsidyLabor G. MoUs

Idea LabPre incubationIncubation

Training Calendar Diploma(Entrepreneurship / Intilaq / Specialized)

An Agency of the Department of Economic Development – Government of Dubai

Less than 12 yrs 15 – 21

(5-15)

Ministry of Education

Entrepreneurs Established

SMEs

Start Ups

Gov. Procurement

Prog.Intelaq Program StartUp

Subsidies

Strategic Initiatives

An Agency of the Department of Economic Development – Government of Dubai

Thought Leadership

• Despite the limited resources, Dubai SME developed its 5-year plan (2010-2014) and decided to focus on creating thought leadership to position Dubai’s entrepreneurship development agenda as one of leading approaches in the region.

• A number of content rich initiatives were launched:

• SME Definition

• SME Development Needs

• SME Industry Studies

• SME Corporate Governance

• SME Friendliness Index for Banks

• SME Pulse

• State of SMEs Report

An Agency of the Department of Economic Development – Government of Dubai

International exposure

Dubai SME has also represented Dubai in many international forums to showcase Dubai’s entrepreneurship development agenda as one of leading approaches globally.

An Agency of the Department of Economic Development – Government of Dubai

Achievements

20,210+Entrepreneurs assisted through

SME Advisory Services

3,336 +SMEs launched. (Facilitated to

obtain licensing and registration

services)

AED 2.4 Billion +Government Contracts facilitated to our

qualified SMEs through GPP

AED 250 Mn +Government subsidies and facilities

provided to Emirati Entrepreneurs

and SMEs

An Agency of the Department of Economic Development – Government of Dubai

"Everyone dreams, but only the leader can change dreams into reality"

His Highness Sheikh Mohammed Bin Rashid Al MaktoumVice President, Prime Minister of United Arab Emirates and Ruler of Dubai.

Thank You