Abu Dhabi aims to become global business hub

“Welcome to the financial hub of the region. Welcome to the capital,” Ahmed Jasim Al Zaabi, chairman of the financial hub Abu Dhabi Global Market (ADGM), began his speech Abu Dhabi Financial Week (ADFW) Opening Ceremony November 2022.

Everything about the ceremony is designed to shock and impress the audience. The acrobats, over the top music, CNN hosts, choreographed drone light show must be jaw-droppingly expensive. There are no compromises.Attendees left no doubt how serious it was Abu Dhabi Determined to become a global financial and commercial center.

Previously held as a conference dedicated to fintech, ADFW was expanded in 2022 to include days dedicated to cryptocurrencies and sustainable development. The event perfectly showcases where Abu Dhabi hopes to position itself in the future.

Abu Dhabi is wealthier than neighboring emirate Dubai, but less glamorous. Abu Dhabi, home to most of the United Arab Emirates’ (UAE) gas reserves, is also its seat of political power, but foreign companies, investors and tourists have historically gravitated toward Dubai. Now, Abu Dhabi is looking to escape Dubai’s commercial shadow and become a global hub for innovative companies.

ADFW is a statement of intent. A big, shiny, loud, well-designed set showcases the many businesses that Abu Dhabi hopes to become the cornerstone of a new diversified economy.

wow factor

At a side event during ADFW, the Abu Dhabi Investment Office (ADIO), the UAE’s investment promotion agency, set the stage for some of the most prominent investors who have recently set up operations in the city.These include former France international footballer Patrick Evra, former NBA basketball player Metta Sandiford-Artest, as well as Canadian businessmen and regular attendees shark tank The TV show Kevin O’Leary.

All these celebs have built digital businesses in Abu Dhabi, and the acting chairman bid farewellAbdulla Abdul Aziz Al Shamsi said the emirate’s digital infrastructure gave it a competitive advantage as an investment destination.

“We provide companies with an unrivaled infrastructure,” said Al Shamsi. “Not only the built environment, but also the infrastructure in the virtual space that utilizes advanced technology. We are the first to introduce 5G technology. This is a great benefit for innovators.”

ADIO runs a program called Access Abu Dhabi that specifically helps women and minority entrepreneurs set up business in the city. Key to ADIO’s message is the philosophy of inclusivity and safety. Many attendees at the ADIO event spoke about how safe the city was, and the diversity of participants showed that Abu Dhabi is more inclusive than internationally recognized.

Al Shamsi insists he is not particularly interested in changing perceptions or comparing Abu Dhabi to other markets around the world, but says entrepreneurs interested in learning about the emirate will find plenty of opportunities.

“[Abu Dhabi Finance Week] It’s a further affirmation of the fact that when you’re here, when you see it, it changes your mindset…” Al Shamsi said. “Whatever you hear elsewhere, when you’re there different. When you make this effort, you realize the potential of Abu Dhabi’s innovation ecosystem. “

get capital

“The question becomes, what is the next disruptive technology?” Alshamsi said. “What is the next innovation in financial services, and will it be born in this region? Our view is, yes.”

One of the strongest factors attracting companies to the Abu Dhabi market is the potentially large amount of capital available. The UAE hosts several sovereign wealth funds with a large pool of investment capital, and they are increasingly willing to invest in innovative organisations.

For example, Mubadala, Abu Dhabi’s second-largest sovereign wealth fund with $284 billion in assets under management at the end of 2021, announced at ADFW that it is accepting Strategic stake in AirCarbon Exchangewhich is establishing the first regulated carbon trading exchange and clearinghouse at ADGM.

O’Leary is a major investor in cryptocurrencies and his presence at the event highlights how Abu Dhabi’s interest in cryptocurrencies has increased and has recently become more controversial. Just before ADFW took place, major cryptocurrency exchange FTX collapsed, sparking fears of contagion across the market. O’Leary was a paid spokesperson for FTX.

Of all the planned sessions during ADFW, the most notable was an interview with Changpeng Zhao (known as CZ), the CEO of another major cryptocurrency exchange, Binance. While the main auditorium was packed, with only standing room at the back of the room, those hoping for interesting details from CZ about FTX’s demise and its role will be disappointed. The softball question he was brought up on purpose avoided controversy.

Binance received a financial services license from Abu Dhabi during the ADFW, meaning it can act as a broker-dealer for cryptocurrencies and digital assets in the jurisdiction. The decision and CZ’s presence prompted harsh criticism from economist Nouriel Roubini, who spoke on another panel. Roubini called the crypto ecosystem “completely corrupt” and labeled CZ a “walking time bomb.”

Abu Dhabi’s embrace of cryptocurrencies shows its willingness to tap into new markets, but the market’s uncertain future also reveals the risks of the strategy.

entrepreneurial economy

Off the main stage, ADFW attendees can learn about Abu Dhabi’s understated work to establish the emirate as an innovation hub.

hub 71 Founded in 2019 as a technology ecosystem to support start-ups. According to Ahmad Ali Alwan, Deputy CEO of Hub71, today it consists of more than 200 start-ups, directly created more than 800 jobs, raised about $1 billion and generated more than $700 million in revenue.

Hub71 helps start-ups at the ideation stage, develops an incentive program to take them through Series A funding, and then also offers tailored support to late-stage start-ups looking to scale up. It has a network of more than 30 venture capital fund partners that engage with the community and has partnerships with more than 20 companies that support start-ups.

Alwan explained that initially its “incentive program involved providing subsidized housing, health insurance and office space. This has evolved into a flexible set of incentives that companies can choose from and decide how to take advantage of, including consulting Talent support and other services.”

Hub71 started working with Techstars, a US-based company that runs similar accelerator programs around the world. Techstars has projects in both Abu Dhabi and Dubai, with the former focusing on femtech, healthtech and adtech.

Techstars CEO Maelle Gavet said its partnership with Abu Dhabi is particularly focused on “helping create a stronger ecosystem locally, partnering with local entrepreneurs who were born and raised in the UAE”.

This hints at the difference between Dubai and Abu Dhabi in building business centers. While Dubai’s success has been based on bringing in talent, relying heavily on foreign workers, Abu Dhabi wants to build something more organic and deeply rooted.

Historically, Dubai has been very successful in attracting expats, and this has only been enhanced during the Covid-19 pandemic, when Dubai remains openeven at the height of lockdowns around the world. UAE has the highest reliance on expatriates In any country in the world, they account for 88% of the total labor force.

While Gavet said Abu Dhabi was a “different environment”, it could “benefit from what Dubai is doing to put the UAE on the map for tech companies and expatriates”. Dubai has a denser ecosystem of entrepreneurs, venture capital and late-stage capital, but the Abu Dhabi government has been very active in encouraging and funding the innovative tech sector, Gavet said.

“We’re all about impact,” Alwan said. “We want to make sure that the companies we attract and support are Abu Dhabi success stories.”

Abu Dhabi hopes that the state’s full support for its plans will help it get ahead of other financial centers around the world and become a hub for future technologies and industries. Whether through accelerator programs like Hub71, support for corporate expansion through ADIO, funding from Mubadala or other sovereign investors, and regulatory protection from ADGM, the state plays a role in every part of the ecosystem.

ADIO’s Al Shamsi calls Abu Dhabi “the land of opportunity” and has big ambitions for what it can achieve.

“We want to be a financial hub, a gaming hub, an industrial hub,” Al Shamsi said. “We want to be the economy of the future when it comes to applying these advanced technologies to solve important global challenges.”