2021 was a landmark year for start-ups and SMEs with the UAE government issuing several edicts and resolutions through the course of the year aimed at helping private enterprises thrive through 2022 and beyond.
Last month, Dr. Ahmad Belhoul Al Falasi, UAE Minister of State for Entrepreneurship and SMEs, said that the UAE has set its ambitions clear about unicorns – having 20 of these start-ups valued at $1 billion-plus each based here by 2031.
This will form the basis for the UAE’s ‘Entrepreneurial Nation’ initiative, which will work on creating public-private alliances and funding possibilities to help startups grow, the minister said.
Recognising that UAE businesses will have to compete for talent with companies all over the world, the country’s leaders launched remote-work visas – which allow foreign workers to live in the country for a year at a time, even if they are employed by an overseas entity. The government also expanded its Golden Visas program.
Speaking to TRENDS, Talal Bayaa – CEO and Co-Founder at Bayzat, said: “To capitalise on these initiatives, UAE businesses must cater to the moods of the talent pool to ensure that workplaces are desirable.”
A recent study showed that potential recruits rank flexible, diverse benefits above compensation when selecting an employer.
Bayaa said, “Success in 2022 will require acceptance by employers that they are now the ones being evaluated. They are being judged on whether they can become employee-led, on whether they are proactive on diversity and inclusion, on whether they encourage employees to bring their whole selves to work, and on whether they take the time to personalise the employee journey. It is time to become output-obsessed rather than input-oriented.”
The National Program for Coders which was announced last year aims to attract 100,000 skilled software professionals to the country and create 1,000 digital start-ups.
“The UAE is recognising that high levels of technical skills proficiency are essential to thrive in the digital economy. To help future-proof the country’s economy, it launched its National Program for Coders in 2021, aimed at creating 100,000 software professionals and 1,000 digital enterprises. Initiatives like this will go a long way towards building a strong local talent pool with digital skills. The National Programme for Coders, combined with Dubai Future Accelerators, and incubators such as Hub 71 and the DIFC FinTech Hive, will help promote the UAE as an entrepreneurial hub where digital innovators can flourish,” Anthony Tattersall, Vice-President for EMEA, Coursera, told this scribe.
Vinayak Mahtani, CEO, BNBME Holiday Homes, said, “I believe the UAE has done several interesting strategic decisions to help the Entrepreneurs and start-ups. The weekend being aligned globally allows business to focus and operate faster. Earlier with Friday being off here and Sunday in the rest of the world it would take 3-4 days to get a response from the rest of the world. Apart from the weekend they have also made the business owner feel more secure with allowing 100% ownership in several businesses. And then the investor and golden visa just makes it even more interesting.”
Challenge: Cost of company establishment
Responding to a question about the high cost of the company establishment for startups in the UAE, Talal Bayaa – CEO and co-founder at Bayzat, explained: “While the cost of starting a company may not seem prohibitive to some, it is all relative. Compared to other countries, where one can set up a single-person entity and legally work from their home, the cost in the UAE is more expensive. However, in terms of the critical challenges for early-stage start-ups: (i) finding product market fit, (ii) fundraising and (iii) building the right team are much larger obstacles.”
Bayaa added: “The impact of lowering company establishment costs is to decrease the financial risk of starting a start-up, and this means more people will be willing to try entrepreneurship. This will definitely have a positive impact for the ecosystem and the economy.”
Jeremy Shorter, Program Director – Abu Dhabi, Flat6Labs, said, “The cost of establishing a business is crucial as this can be a big factor in the location of incorporation. Start-ups operate lean methodology when it comes to setting up and want to be as cost effective as possible.”
On his part, Vinayak Mahtani believes that the most critical challenge for the start up is getting the proof of concept and showing it is scalable. Once you have this then you are sorted.
Challenge: Changing workforce paradigms, adapting to an increasingly millennial and Gen-Z workforce
Giving his point of view, Jeremy Shorter said: “Start-ups have the upper hand here, after all, they are predominantly created and led by millennials and Gen Z individuals. This gives them a deep understanding of the current sentiment of the global talent market. The challenge here might be start-up leadership teams understanding how to maintain a scalable structure from the early stages of the business.”
Vinayak Mahtani said, “I think the millennial and Gen Z workforce suits a start up more than the corporate world would. The generation work different to the previous generations- it’s not about the number of hours you have to work but rather about the objectives that need to be achieved. This suits start-ups very well.”
Talal Bayaa explained, “Perhaps the biggest impact of the change in workforce dynamics and demographics has been on performance management – simply put, the old ways of monitoring performance are no longer relevant! Performance management methods and their metrics have evolved to support the creation of trusting, productive work environments in remote setups. Motivation has replaced intimidation as the predominant productivity methodology. Measurement of output has replaced measurement of input. Continual feedback has replaced periodic appraisals. Empathy has replaced policy.”
Tools / Programs to empower regional start-ups
Talking about the role of tools/programs such as online professional education, to incubators and accelerators in empowering regional start-ups for success, industry specialists said that incubators and accelerators provide a platform for knowledge sharing between experienced professionals and entrepreneurs, and new founders. They play an important role in accelerating the learning curve for young start-ups, which improves their chances of success, they added.
The UAE’s Top 10 Startup Incubators & Accelerators are DIFC Fintech Hive, Dtec, Faster Capital, Flat 6 Labs, In5, Intelak, Krypto Labs, Plug And Play, TURN8, and Wamda.
Talal Bayaa, said, “The UAE has done a great job in building a network of tech hubs, incubators, and accelerators to attract entrepreneurs from across the world, as well as help them hit the ground running. There are easily a dozen today that operate at a really high level, and have attracted world-class talent to the country.”
Anthony Tattersall said, “Developing a homegrown pool of technically proficient professionals will be key to the success of the UAE’s digital start-ups, and this means that start-ups need to offer their employees opportunities to continuously upskill and reskill. Online professional education is well-placed to cultivate those professionals.”
Tattersall added, “For example, an online learning provider like Coursera can provide companies with world-class content from both top universities – University of Michigan, Stanford University, Yale University – and reputable industry leaders (Google, IBM, Meta) that is tailored directly to the job-relevant skills their employees need most. In contrast to the many enterprise solutions that offer micro-learning, we offer a dynamic learning experience that helps learners develop true mastery of skills — what we call deeps killing. This helps create the better-prepared workforce the UAE’s start-ups will require to thrive in the digital economy.”
Jeremy Shorter said, “Incubators and accelerators play a pivotal role in the success of regional start-ups. With the regional ecosystem being in its infancy in comparison to some of the more developed entrepreneurial ecosystems globally, accelerators and incubators are providing the much-needed safe space for experimentation that is so important at the early stages of business. In addition to that, they are providing the start-ups who want to scale out of the region and become global exports with access to the global market through coaching, training, and strong partnerships that they can leverage.”
Vinayak Mahtani said, “These are great tools because they all for collaborative thinking and working. They break down complete resources and make the affordable to startups to use. It’s all about sharing in this economy.”