With an estimated windfall of more than USD 30 billion in value add, the delayed Dubai Expo 2020 is forecast to have a significant impact not only on Dubai’s economy but on that of the UAE and the wider Middle East and North Africa (MENA) region well into the future.
In the year that the UAE celebrates the 50th anniversary of its formation as a federation, Dubai and the UAE will be front and centre of the world stage for business and innovation. This is also the year in which Dubai Plan 2021 and the UAE’s Vision 21 plan move closer to fruition – ambitious targets, outlining optimistic and aspirational strategic goals for the economy, people and government.
But what specific benefits can Expo 2020 bring, and how can it boost the SME landscape to help entrepreneurs in the UAE and beyond?
Boost to foreign investment
Dubai Expo 2020 is a big deal. This is the first time in its entire history that the event has been hosted in the Gulf or MENA region. Coming hot on the heels of the coronavirus pandemic, it will be the largest global gathering since 2019, with between 20 million and 25 million visitors expected over six months.
In short, it will be a face-to-face celebration of the triumph of innovation and the power of human collaboration – a chance to underscore the post-pandemic relevance of its three core themes: opportunity, mobility and sustainability.
This appeal is expected to bring in between USD 100bn and USD 150bn in foreign direct investment (FDI) across sectors such as financial services, tourism, hospitality, real estate and infrastructure/ construction.
With the focus moving inevitably towards sustainability (COP26 opens just weeks after Expo 2020 kicks off), the event will be a chance to show off the UAE’s green credentials, as it invests heavily in renewable and sustainable energy and promotes green growth. Expo 2020 itself has a target of 50% of its energy requirement from renewables, including the first mega-sized application of integrated solar and photovoltaic generation.
Entrepreneurs and business owners keen to take advantage of the greener landscape are thus more likely to see the UAE as a natural place to seek investment for green innovation technology. And the figures speak for themselves: despite the pandemic’s negative impact on FDI flows, Dubai maintained high investor confidence in 2020, with total estimated FDI capital flows reaching AED 24.7bn, not far off the AED 28.6bn total for 2015.
How could this benefit your SME?
Even if you’re not currently looking for inward investment in a UAE SME, the greater the foreign investment interested in the UAE, the greater the economic boost to the region. The entire business ecosystem and economy will be positively affected, which means that SMEs here – both local and international – will see a boost in activity and business.
International investors have long been attracted to Dubai because it represents an increasingly favourable destination for FDI. Major legislative steps have already been taken to promote Dubai as worthy of international investment; the 2016 Bankruptcy Law modernised the UAE’s previously unpredictable insolvency laws. And a 2018 UAE investment law has, for the first time, allowed foreign equity ownership of up to 100% of onshore UAE companies in certain strategic sectors.
In addition, foreign investors see it as an ideal access point into regional markets. At the gateway between east and west, and within an eight-hour flight of two-thirds of the world’s population, it presents an opportunity to gain access to more than 1.7 billion consumers in MENA, Pakistan and India.
This further enhances Dubai’s reputation as a global platform for trade and investment. As the world focuses in on Dubai and the UAE, Expo 2020 will give the region a unique chance to showcase those advantages.
Increase in jobs and the talent pool
Enhanced economic activity is expected to create nearly 300,000 new jobs in Dubai and throughout the UAE, and attract an entirely new talent pool. Some predict that Expo 2020 will have a significant impact on the wider region too, with 60 jobs being generated across the MENA region for every one created in the UAE.
In total, nearly one million job-years are forecast to be created between 2013-2021 – the equivalent of an approximate average of 50,000 full-time-equivalent (FTE) jobs per annum.
How could this benefit your SME?
Enhanced economic activity will attract more talent to the UAE and create more business opportunities for SME owners and entrepreneurs. Expo 2020 has awarded 4,500 contracts, more than half of which have been won by SMEs, representing investment of nearly AED 5bn and guaranteeing some 12,600 job-years.
In addition, entrepreneurs, startups and small businesses can take advantage of the government’s District 2020 signed strategic partnerships with Dubai SME and the Mohammed Bin Rashid Innovation Fund, which allows them to pursue expansion through the District 2020 platform.
During its legacy period (April 2022 to December 2031), the Expo 2020 site will be redeveloped to further ease new business set-ups; over 80% is planned to be retained for District 2020, and it will eventually provide a home for a mix of corporations and SMEs.
District 2020’s development is designed to embody the UAE’s Vision 2021 by supporting sustainable economic development and creating a business ecosystem that underpins growth industries like transport, tourism, construction and education.
New business opportunities
With more companies opening offices in the UAE in the lead-up to Dubai Expo 2020, more business opportunities have been created and will continue to be created over the next six to eight months and beyond.
How can we be so sure? Because, even without the added boost of a world expo, the region has been relentlessly pushing an SME agenda to encourage growth.
In the UAE, the government has for many years been championing small businesses, with Dubai SME offering support to entrepreneurs in all phases of development. Further aid has been available from agencies such as Dubai Future Accelerator, which helps entrepreneurs to use the city as a ‘testbed for creating solutions to the global challenges of tomorrow’.
Initiatives like these have, over the last few years, translated into tangible benefits for SME owners, with the UAE ranking 21st out of 190 in The World Bank’s 2018 Doing Business report, jumping to 16th place in its 2020 ‘Ease of doing business’ ranking.
In addition, government-backed accelerators like Dubai Future Accelerators and StartAd in Abu Dhabi, not to mention Abu Dhabi’s own Khalifa Fund, have been helping to create a flourishing ecosystem to encourage SMEs to thrive.
The massive influx of investment as a result of Expo 2020 can only enhance these opportunities further.
How could this benefit your SME?
With over 20 million visitors expected at Expo 2020, startups and SMEs will enjoy significantly more exposure to potential investors, partners and collaborators. It’s the perfect time to leverage your products and services, and a unique opportunity for enhanced networking in an environment where people are open and willing to engage.
Expo 2020 presents business owners with a unique international business platform for marketing your business to an audience of local, regional, and global consumers and investors. A reported 80% of attendees are coming to Dubai expecting to be able to hold networking and collaborative events, with the ultimate aim of expanding global trade.
Expo 2020 is a one-off platform for UAE business owners to expand into new markets and develop long-lasting business ties under the auspices of innovation, as well as sustainable development and growth. So far, nearly 40,000 SMEs from over 150 countries have listed on Expo 2020’s Online Marketplace to do just that.
Expo 2020 presents unrivalled opportunities
Dubai Expo 2020 will provide an unprecedented platform for SMEs the world over to establish themselves in the UAE, as they seek to demonstrate their own contributions to opportunity, mobility and, in particular, sustainability.
It will offer entrepreneurs and business owners the chance to attract investment, develop new markets and collaborate on new products and services to address the world’s most pressing issues.
The UAE is taking the opportunity to showcase its ecosystem for business and innovation in the region; for SMEs, Expo 2020 is an unmissable chance to market the contribution of your own business amidst the favourable environment it is creating.