This has been a tough year across the world – the global spread of Covid-19 has meant that no region or country has been immune to its adverse social and economic impact. However, the way the crisis has been handled has differed widely worldwide.
While lockdowns were initially common in most nations, subsequent measures have been largely decided on an individual basis. Looking at Dubai, the emirate was quick to introduce precautionary measures as it reopened the economy and continues to monitor the situation closely, with violators facing stiff penalties.
The first in the GCC region to welcome tourists in July, Dubai has now resumed most business activities.
All this has helped ignite the recovery process for companies operating in the emirate. Business conditions in Dubai’s non-oil private sector improved for the third straight month in September, IHS Markit’s monthly Purchasing Managers’ Index (PMI) found. With a rise in activity and new business, Dubai’s PMI rose to 51.5 in September from 50.9 in August, remaining above the 50 mark that indicates growth.
Although the travel and tourism sector continued to decline, it was at the slowest pace since February, the report found.
“Just like many other major cities around the world, Dubai has gone through a major transition over the last six months with its economy and business landscape reshaped by Covid-19,” says Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry.
“This is a pivotal moment for Dubai as the emirate is just beginning to restart its meetings and events industry after reopening its borders to tourists only a few months ago.”
Trade has already been increasing – exports by Dubai Chamber’s members had a combined value of more than Dhs45bn between June and August 2020, a 7.4 per cent increase compared to the March-May period. The average number of exporters over the three months ending in August also stood at 4,630, up almost 14 per cent during the same period.
But while some economic sectors faced challenges due to restrictions this year, others such as e-commerce, logistics and healthtech have thrived in recent months, driven by digital transformation.
“Companies are reinventing their business models and fast-tracking digital strategies as they prepare for a post-pandemic recovery,” says Buamim.
As a non-profit that seeks to support businesses in Dubai and promote the emirate as an international hub, Dubai Chamber has remained “fully engaged” with its community to keep them informed of the latest economic developments, market trends and global opportunities, the CEO states.
“A few months ago, we launched the Business Connect portal – which has helped companies deal with the impact of Covid-19. Through this experience, we have learned the importance of investing in innovative solutions and adapting to new market conditions,” he adds.
THE STARTUP FOCUS
A big emphasis for Dubai Chamber has been the small and medium business sector. Although many SMEs have been hit hard by the crisis, Buamim asserts that several new opportunities have also opened up. In line with market trends, a growing number of startups are emerging in the fintech, healthtech, education, e-commerce, sustainability, wellness and supply chain spaces.
“While Covid-19 has posed some challenges for startups and SMEs in Dubai, it has also created an opportunity for young and smaller businesses to experiment, innovate and reinvent existing business models. B2B technology startups, in particular, have demonstrated greater resilience as they capitalised on new market opportunities and benefitted from the various programmes, initiatives and support offered under Dubai Startup Hub, which is Dubai Chamber’s entrepreneurship arm,” he explains.
Established by Dubai Chamber in 2016, Dubai Startup Hub aims to encourage entrepreneurship in the emirate. In the first half of 2020, it supported 1,200 startups through various initiatives such as organising over 20 webinars focusing on topics such as funding, banking, global expansion, market research and data.
This year, it also held the first edition of the Emirati Development Programme – an initiative delivered jointly with Dubai Technology Entrepreneur Centre (DTEC) to provide Emirati startups with one-on-one mentorship support.
The programme saw 30 Emirati entrepreneurs graduate with 88 per cent of them “furthering their business ideas after graduation,” states Buamim.
“Another interesting trend we have seen this year is a growing interest in Dubai among startups from other countries such as India, China and several African markets. We have capitalised on this demand with the recent launch of the first-ever Dubai Tech Tour, a virtual trade mission organised in co-operation with Dubai Chamber’s Mumbai office, which is joined by 15 Indian scale-ups specialising in fintech and healthtech,” he explains.
Dubai Startup Hub also held the annual Dubai Smartpreneur competition – now in its fifth edition – which concentrated on the areas of mobility, sustainability and opportunity this year. It received 300 applications, a 23 per cent increase compared to the previous cycle, with 82 per cent of the business ideas submitted by UAE-based startups.
“This is an indication that the entrepreneurial spirit in the UAE remains very strong, while these young startups are bringing unique business concepts that fill market gaps and drive sustainable growth,” states Buamim.
Overall, the amount of funding secured by Dubai Startup Hub’s members in the first half of 2020 accounted for 90 per cent of the full year of 2019.
“This is a positive sign that businesses are looking to startups to kick-start new projects and take digitalisation efforts to the next level. There is now a renewed sense of optimism among startups as business gets back on track and companies prepare for a busier and more eventful fourth quarter,” says Buamim.
Dubai Chamber is currently preparing to launch a new programme for more established startups (scaleups) in Dubai, as well as a new edition of the Dubai Startup Hub networking series to offer guidance on how to launch startups in particular sectors.
It also plans to launch a comprehensive report on the startup outlook for 2021 by the end of this year.
Looking ahead, the prospects in Dubai and the UAE remain strong for startups, stresses Buamim.
The recent reshuffling of the UAE government is a “strategic move aimed at harnessing the power of the digital economy in the post-Covid era”, with the appointment of a new minister of state for Entrepreneurship and SMEs – Ahmad Belhoul Al Falasi – highlighting the sector’s importance.
“Startups will have a major role to play in advancing these efforts by driving innovation and supporting the country’s transition to a digitally-driven economy,” adds Buamim.