ICT SMEs get more support in the Middle East
Small to medium sized enterprises (SMEs) form the backbone of growing economies and global industries. They act as both a keystone and catalyst for driving innovation, employment and investment.
In the Middle East and North-Africa region, SMEs employ approximately 71% of the workforce. However, their contribution towards the region’s GDP is only 28%.
According to the International Finance Corporation, the region's labour force participation rates are among the lowest globally. The Arab world needs to create more than 85 million jobs during the next 10 years to be at par with the global workforce participation level.
The technology sector remains a key economic driver; regional governments are pushing new initiatives to support ICT SMEs. These include: Technology specific funds, subsidy programmes and incubation services.
The Saudi Telecom Group recently invested US$50 million in an ICT fund for SMEs. The UAE’s Telecom Regulatory Authority (TRA) has set up a fund of over US$ 20 million to support ICT firms.
In the UAE, SMEs currently represent around 95% of registered businesses. The local government continues to set strategic plans that support SME development through developing and promoting entrepreneurial mindsets. A survey revealed that 58% of the start-ups in UAE will be working across borders by 2013, further justifying the economic pay-off of supporting growing SMEs - to be global enterprises of tomorrow.
Technology funds in the UAE are mostly led by financial houses and supported by the local government. In the past few years banks have launched numerous SME funds of over US $ 100mil, and more than 70% of the funds were availed by new start-ups. Abu Dhabi Commercial Bank, HSBC, are amongst the leading banks providing SME funds.
The UAE government is an advocate of providing SMEs subsidies. They extend their support through the provision of equipment, endorsement letters allowing easier borrowing from banks, etc.
Government bodies and special programmes in UAE most widely host incubation centres targeting SMEs and entrepreneurs. These centres provide reduction in operational costs through providing physical work space, access to knowledge pool, and e-services amongst other resources.