Businesses in the UAE and Israel are seeing immense opportunities around trade, investment and collaboration following the signing of the Abraham Accord, an agreement to normalise relations between the two countries, say senior executives at Dun & Bradstreet, one of Wall Street’s oldest data and analytics providers.
The status of the UAE as a pre-eminent business and logistics hub – a gateway to the Middle East and Africa – as well as demand for innovation and high-tech solutions will attract Israeli companies and set the scene for greater collaboration, says Doron Cohen, Executive Chairman of Dun & Bradstreet Israel.
“There is only one word to describe all of this, and that is ‘excitement’,” says Cohen. “This is an opportunity that I didn’t believe I would see in my lifetime.”
A flight time of around three hours between the two countries is a drawcard for businesses, investors and travellers.
Tourism in the UAE is set to be one of the first industries to get a boost from the accord, with an influx of Israeli tourists expected as Covid-19 is contained and regular flights begin, says Manjeet Singh Chhabra, Managing Director – CRIF Gulf (Dun & Bradstreet).
The opening of new kosher restaurants and kosher options at hotels should make the Emirates more attractive to Jewish visitors.
There is only one word to describe all of this, and that is ‘excitement’. This is an opportunity that I didn’t believe I would see in my lifetime.
“I don’t know any Israeli who doesn’t want to fly to Dubai now. Already there’s been advertising on TV for three weeks,” says Cohen. Dubai real estate is also being advertised on Israeli media, including the fact that the cost of living in Dubai compares favourably with Tel Aviv.
“UAE businesses truly know how to cater to the rest of the world. They realise what needs to be done, and it gets done very quickly,” says Chhabra, adding that news of the accord has given a welcome boost to business sentiment in the Emirates as many begin to recover from the Covid-19 impact.
Prospects for collaboration
A raft of deals and agreements have been signed between companies and organisations in both countries, including to combat Covid-19, highlighting the opportunities for collaboration in areas such as health, technology, agriculture and finance.
Israel is known as the startup nation for its advanced technologies such as artificial intelligence, fintech and aerospace, and Cohen sees opportunities for joint ventures, collaboration, and for UAE companies to use that cutting-edge technology to gain an edge in the market.
UAE businesses truly know how to cater to the rest of the world. They realise what needs to be done,
and it gets done very quickly.
And as the UAE pursues a food security strategy to enhance local production, Israel’s know-how around growing food in the desert and desalination technologies should prove attractive to the UAE, Bahrain and the wider region, he says.In turn, that means that UAE companies can adopt proven technology, rather than trying to reinvent the wheel, says Chhabra. “Not only that, there is a possibility where both countries can join hands, co-innovate and make their new products and services available to rest of the world.”
SMEs set to benefit
The UAE and Israel share a remarkable degree of symmetry when it comes to their economic size and structure. Both countries have similar populations– with 9.8 million inhabitants in the UAE, compared with 9.1 million in Israel – and GDP, which was worth $421 billion (Dh1.54 trillion) in the UAE and $395 billion in Israel.
Small and medium enterprises (SMEs) also make up a major share of the economies of both countries, with around 450,000 SMEs in the UAE and some 550,000 in Israel, says Cohen.
Some aspects are complimentary. “In the past five years, about 70 per cent of the UAE’s transactions have been made with a target company outside of the UAE, while in Israel it’s almost exactly the opposite – around 60 per cent of all transactions have been made with Israeli target companies, with money coming from the outside to invest in a technology, agriculture, fintech, and other sectors,” he explains.
For Israeli companies, the fact that the UAE ranks as 16th in the world in the Ease of Doing Business index (Israel ranks 35th) and the efficient company set-up process in the various free zones make it attractive both for the local market and as a gateway to the wider region, adds Cohen.
Making use of data
Despite their enthusiasm, both men emphasise the importance of using robust data to size up potential market opportunities and perform due diligence on potential partners, as well as the need to professionally manage compliance and regulatory requirements.
UAE companies looking at opportunities in Israel – whether a large corporate or an SME – should “work smart and leverage the power of data,” says Chhabra, noting that CRIF Gulf (Dun & Bradstreet) has already worked with a number of UAE companies to analyse the Israeli market, such as cloning their ideal customer in the Israeli market context, charting the competitive landscape, and determining how a company’s unique selling proposition positions them within their market segment.
“People are hungry for this, but there is so much information out there, we need to analyse it, cut through the deluge of data points to find the right information, and make sure that it’s not getting cluttered in my decision-making,” says Chhabra.
Using data analysis to size up potential market opportunities can also help SMEs gain funding for an expansion, typically one of their biggest hurdles, notes Chhabra.
“Banks want to know that a company has done its homework when contemplating expansion. By accessing the right information and preparing a sound business plan, they can present information in the manner that banks and investors will understand. And that opens a big world of opportunities for them.”
Doing due diligence
Meanwhile, as Covid-19 disrupts global payment patterns, it has enhanced the need to carry out due diligence on prospective partners and suppliers, says Cohen.
“A company that you knew last year as a solid company that could pay its bills – that’s not necessarily correct today. What you knew only a month ago, or six months ago, may no longer be the case today.
“This makes it more important than ever to look at the long-term record of a potential partner or supplier to verify whether they have the financial resources to weather this pandemic,” he says, noting that Dun & Bradstreet has built a dedicated global Covid-19 index that can be applied within minutes to a company’s entire supply chain.
It comes as Covid-19 has accelerated the transformation of businesses, which Chhabra says will be a lasting impact of the pandemic.
“Digitalisation is no longer a luxury – for any business that wants to be successful, they have to embrace it. Businesses that are agile and adaptive are going to be the winners in the long run."