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The Future of SMEs in the UAE

The Future of SMEs in the UAE

Published on: January 2023​ Author: Engy Shibl |Sarah Shaer |Dr. Fadi Salem |Salma Refass  Non-Resident Authors: John Lilly white, Google Research Associate, MBRSG; Zina Akrout , Research Associate, MBRSG Genre: Economics|United Arab Emirates (UAE)​ Category: Economic Policy​

Despite global governments’ efforts, Small and Medium Enterprises (SMEs), which usually represent the majority of economic activities at national levels, were among the hardest hit by the COVID-19 pandemic. For many start-ups and SMEs, that period represented an extraordinary phase of insecurity, anxiety, and frustration. SMEs’ contribution in the United Arab Emirates amounts to 60 per cent of the country’s GDP. Prior to the pandemic, they represented no less than 94 per cent of all companies operating in the country and employed more than 85 per cent of the private sector’s labour force. For its strategic importance, during the past two years, the government extended numerous incentives and safety nets to this vital sector of the economy. Two years on, signs of economic recovery are becoming louder. Nevertheless, there is still limited understanding of the impact of that period on the vital SMEs sector, and no in-depth assessment of the challenges, the implications of the policy interventions, or the outcomes and lessons learned from that period for the future of the SMEs and start-up sector.

This report presents the results of pioneering national-level fieldwork by The Mohammed bin Rashid School of Government (MBRSG), in partnership with the Ministry of Economy and with support from Google. It details how the ramifications of COVID-19 in the UAE have impacted SMEs. Driven by data, the report aims to extract trends, develop lessons, and highlight policy directions that can contribute toward the ease of doing business across the SME ecosystem in the country. Through primary fieldwork, it extracts insights from the practical experiences of a sample of more than 280 SMEs and start-ups collected throughout an unprecedented and economically turbulent period. In doing so, the report’s findings give voice to the diverse types of start-ups and SMEs that went through significant upheavals during that period. Building on the case of the UAE, the valuable findings presented here aim to contribute to developing evidence-based policy directions for the sector across the region.

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