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UAE – Two-thirds of UAE small and medium-sized enterprises (SMEs) and start-ups surveyed cited a “negative financial impact” from the coronavirus pandemic.
A paper entitled “The Future of SMEs in the UAE – Drafting a future roadmap and lessons learned for the post-pandemic phase” was sponsored by the Mohammed bin Rashid School of Government (MBRSG) in collaboration with the Ministry of Economy and with support from Google Launched next.
About 66% of the surveyed small and medium-sized enterprises said they had sought financing in the past two years, while only 12% of medium-sized enterprises said they had cut training costs, and 15% had cut employee benefits due to the epidemic.
transfer production
Some 38% of surveyed SMEs reported shifting production to new products and services due to the impact of Covid-19
A third of SMEs surveyed said the government relief measures had eased financial stress, with 9 percent saying it had “saved the company from bankruptcy” and 16 percent saying it had helped them retain talent and prevent layoffs.
Before the pandemic, UAE-based SMEs reported widespread challenges in implementing online payment systems, but 56% claim it has become ‘easy’ or ‘very easy’ since Covid-19.
Based on years of on-the-ground research by MBRSG Policy Research, the report identifies the challenges facing small and medium-sized enterprises (SMEs) in the UAE and suggests future policy directions for strengthening the sector.
policy seminar
The report is based on a series of policy workshops and a national survey involving some 500 start-ups and SMEs over the past two years, as well as a series of interviews with stakeholders across the UAE.
Findings from fieldwork conducted during and after the pandemic also contrast with earlier policy research by the Faculty, which explored ecosystems before the Covid-19 pandemic, providing a rare perspective on emerging challenges and shifts in the department.
Abdullah bin Ahmed Al Saleh, Undersecretary of the Ministry of Economy, said: “The SME sector is a veritable pillar of the UAE’s national economy. In fact, no less than 94% of companies in the UAE fall into the SME category, considering that Up to this point, empowering this key sector is a priority for the UAE leadership and government, and paving the way for further economic and social development. The findings of the study shed light on the current state of the industry and help to develop better policies to support the future of the industry.”
evidence-based research
Dr Ali Bin Sebaa Al Marri, Executive Director of MBRSG, said: “As a research-oriented institution, MBRSG is committed to developing data-driven and evidence-based research and policy analysis that challenges and how they can best be addressed through flexible policies and tailored regulations.”
“This report seeks to do just that, delving into the devastation of the Covid-19 pandemic and its impact on the UAE economy and SMEs before providing informed recommendations to policymakers.”
Commenting on the research, Anthony Nakache, Managing Director, MENA, Google, said: “SMEs play a vital role in the UAE economy and to thrive, they need the right environment and policies. In the UAE, we work with the public There is ongoing partnership and collaboration between ministries such as the Ministry of Economy and MBRSG to share knowledge and best practices to enable SME growth in the digital world.”
Regional Innovation Frontiers
The UAE is firmly at the forefront of regional innovation, with 251 scale-ups, accounting for 42.8% of the total recorded in the MENA region. The report highlights how government policies and initiatives have enabled the country to reduce the burden of Covid-19 on the SME sector. At the same time, new agile responses in terms of policy, legislation and interventions are helping to retain existing talent and attract more during the crisis, especially in the digital space. This response has ultimately allowed the country’s SME sector to not only survive the pandemic but, in the case of some sectors such as the digital economy, to thrive.
Dr Fadi Salem, Director of Policy Research at MBRSG and co-author of the report, added: “While the data show positive results for the UAE in terms of agility and digital transformation in the sector, the overall picture is mixed based on our findings. Some challenges remain exist, mainly related to banking, licensing, intellectual property management and difficulties in procurement with public bodies, such as payment restrictions and delays.”
Based on the findings of the MBRSG Policy Research Group, the report sheds light on the progress of future policies in six categories: the role of SMEs in “R&D governance policy”; financing mechanisms for SMEs; building an export economy; and government payments and tenders to accelerate digital economy transformation .
Copyright 2022 Al Hilal Publishing and Marketing Group Courtesy of SyndiGate Media Inc. (Syndicate Information).
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