Dubai: Dubai SME witnessed a 50 per cent increase in membership this year, according to CEO Abdul Baset Al Janahi.
Dubai SME was formed in 2002 as an agency in the Dubai Department of Economic Development (DED) with the goal of developing local entrepreneurship as an alternative career choice amongst the local residents.
“Over the last 11 years, we have helped more than 13,000 Emirati entrepreneurs through our various services ranging from incubation, subsidised start-up (fee waivers & reductions), funding, capability development, links to government procurement and business advisories to set up their businesses and developed them to the next level.”
Dubai government is trying to promote entrepreneurship as a means to diversify the economy into newer sectors, niche services and new business models. Enterprises classified as small or medium-sized as per the official SME definition of Dubai SMEs, short for small and medium enterprises, employ around 42 per cent of Dubai’s workforce and account for about 40 per cent of Dubai’s GDP. Al Janahi said that since inception, Dubai SME has supported around 1,500 SMEs.
“Despite to this number, there is a growing community of budding and potential entrepreneurs who benefit from Dubai SME initiatives aimed to identify, nurture and promote entrepreneurial acumen,” he said.
“We share platforms with various stakeholders such as government officials, business leaders, financial institutions, educational institutions and social development initiatives to exchange ideas to sustain and advance the entrepreneurial culture in the country.”
Most of the SMEs in Dubai belong to the services and trading sectors. Dubai’s diversified economy and status as a business hub offers a wide field for SMEs to explore a variety of sectors and drive innovations. Over the years, local SMEs have established their presence in such sectors from manufacturing and exports to retailing and consultancy services. Jitendra Gianchandani, Chairman and Managing Partner of Jitendra Consulting Group, said that the remarkable growth in the number of SME beneficiaries is a good indication of the overall performance of SMEs sector in Dubai.
“There is stability in this business and I think that the SME sector’s performance is improving but at snail’s pace,” he said.
However, Gianchandani calls for further support to this sector. “At times the government seems very selective and slow in offering support to SMEs. Banks and governments have to jointly work out the plan to lift the SMEs sector.
“Both public and private sectors should be integrated to support the SMEs sector,” he said.
Acknowleging all the initiatives carried by Dubai SME to support this sector, Gianchandani pointed to the difficulties and challenges in the market.
Challenges
According to the latest quarterly survey done by Dubai SME, competition from local and international players is the topmost challenge facing Dubai’s small and medium businesses. Increasing rents was cited as a key challenge, while the availability of skilled labour and cost of finance are also among other key challenges.
“Financial support is the major stumbling block for SMEs,” Gianchandani said. “Yes, they need working capital support until they reach break-even point, which is the first three to five years.”
Dubai SME offers various services ranging from incubation, subsidised start-up (fee waivers and reductions), funding, capability development, links to government procurement and business advisories. These services are being offered based on the needs of the entrepreneur or start-up.
Going forward, Al Janahi said; “Our strategy is three-fold: advocating a pro-business and pro-enterprise environment; seeding and nurturing start-ups; and grooming willing and growth-oriented SMEs. We provide a complete ecosystem where entrepreneurial talent is encouraged and translated into real business projects with all necessary support from infrastructure, advisory and capability development to marketing and business expansion.”
Global hub for entrepreneurs
Dubai SME’s vision is to make Dubai the global hub for entrepreneurs and start-ups.
Al Janahi said: “We aim to grow with this sector and lay the pipeline for future large businesses that can contribute new economic value. “
“Our focus is on improving and upgrading SME capabilities, creating linkages and networks for SME growth, and on grooming entrepreneurs and SMEs. This year, with the establishment of the Mohammed Bin Rashid Fund (MBRF) at Dubai SME, we will devise schemes to encourage more locals to start their businesses with financial support.”
