DUBAI: The UAE is supporting more Emiratis to become entrepreneurs as the Gulf nation plans to become home to unicorns — startups with a value of over $1 billion — a minister in-charge of developing the sector said.
A few years ago, around 1.5 percent of all graduates were starting their own business right after graduating, with 100 percent commitment to their business, and now this rate has jumped to about 5 percent, said the UAE’s Minister of State for Entrepreneurship and SMEs, Ahmad Belhoul Al-Falasi.
“Three times the number of Emiratis is now seeking to start a business. So I think that’s one thing. The other element is we need to find a way and policies that allow them to move from being an employee to an entrepreneur,” he told Arab News in an exclusive interview on the sidelines of the Top CEO event in Dubai.
The surge in nationals turning businessmen in the UAE was accelerated by the pandemic as many “smart” graduates couldn’t find jobs, he added.
One of the pioneering ways the UAE is promoting entrepreneurship is by offering state employees paid leave for a year to look after their businesses and explore their lives as entrepreneurs before fully committing to their career path.
Al-Falasi added: “We also announced on that front, the entrepreneurial leave policy, where we say, if you are a national in federal government and you have a side business — we call them sidepreneurs — and you’ve reached a point where that business needs your attention but you still don’t want to leave the comfort of your job, we give you an annual leave up to one year with 50 percent of your pay.
“That employee can go and focus on his or her business and then come back in a year and decide.”
The UAE has set its ambitions clear about unicorns in its ‘Entrepreneurial Nation’ initiative, under which it plans to have 20 of these startups valued at $1 billion-plus each by 2031.
Referring to the 20 unicorns target, he said, “I think, at the end of the day, if you look at the domino effect, once you have the first five or seven unicorns, it becomes extremely fast.”
The minister used India as an example. The country just celebrated its 100th unicorn a while ago, and they only started focusing on startups 14 years ago, he added.
“So they’re the third largest ecosystem globally after the US and China. But they started much later. And that shows you that there’s a ripple effect of having the first couple of unicorns.
“For example, a lot of the employees and the co-founders from the first unicorn Careem are now investors in other startups.”
He explained that creating the right ecosystem for these startups is what will lead in the end to seeing many of them turning into unicorns.
“It’s to ensure that the ecosystem, whether it’s funding, whether it’s access to talent, whether it’s access to markets, whether it’s through signing FTAs with different countries, they are all falling into place to create an ecosystem that’s conducive to growing and creating unicorns.”
The UAE is formulating regulations to attract new businesses and startups to the nation, disclosed the minister.
Furthermore, Al-Falasi revealed that the UAE government is trying its best to make the country the first choice to start a business in the region.
“We are now looking into regulations that will make the UAE more attractive to start your business. We may not be the largest market but today the UAE is the best market to start a business. So, we’re trying as much as we can to make the UAE the best choice to start a business,” Al-Falasi told Arab News.
Substantiating the UAE’s investment-friendly nature, Al-Falasi revealed that 42 percent of all venture-backed startups in the UAE were started outside the UAE, which means this 42 percent reached the country seeking investment.
“Equally important is from all the venture capital that was invested in the UAE, more than 50 percent was international investors. So, maintaining that internationalization is extremely important for the UAE. And I think that’s the selling proposition and talent,” continued Al-Falasi.
Talking about the small and medium-sized enterprises sector, Al-Falasi said that the SME sector is critical for the UAE and the entire world.
Al-Falasi revealed that SMEs account for two-thirds of global employment and generate over 50 percent of the global GDP. He also added that the UAE always tries to create a productive environment where SMEs can evolve and develop.
“We do expansions. When we sign bilateral agreements with different countries, like the one we signed with India last week, it will become much easier for SMEs to expand between the two countries,” stated the minister.