The United Arab Emirates (UAE) offers an increasingly rich vein of opportunity for UK SMEs. We talk to the UK's Department for International Trade representative in Abu Dhabi about success and where to find it.
To many, the Middle East region is all about oil. The United Arab Emirates (UAE) – a federation of the seven emirates of Abu Dhabi (its capital and the largest Emirate), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain – has the seventh-largest oil reserves in the world, for example. It is also major natural gas producer. But for many years now, it has been channelling its vast oil revenues into a programme of diversification.
This continuing agenda gives UAE a bright future. And it presents UK businesses with significant opportunities to be part of this success story.
It is important for overseas business to understand that each emirate has its own character and commercial plans, says Douglas Barrett, Director for Trade & Investment, Department for International Trade (DIT), British Embassy, Abu Dhabi. Indeed, although Abu Dhabi and Dubai tend to stand most prominently as pillars of UAE commerce, they are quite different, he reports.
UAE is an “incredibly diverse” country, says Barrett. By far the greatest number of western expatriates are from the UK (around 120,000), most of whom live in Dubai. There are also around 5000 UK-based SMEs operating in UAE, again mostly located in Dubai. These businesses service rapidly expanding sectors such as media and ICT. “Because Dubai has so successfully built itself as the commercial capital of the MENA region, it is the sought-after place to live and work,” he says. Core aspects such as defence and monetary policy are managed at a federal level but each emirate takes care of most of its own needs thereafter. Much focus across UAE is now on the education and healthcare sectors, says Barrett. “The education sector is diversifying its offering across the board, from the premium school ‘brand names’ to more affordable education provision,” he explains. In healthcare, the need is for both general and specialist hospitals and clinics. In both sectors, the requirement is broad; buildings and services, infrastructure, equipment, facilities management and personnel training. There is plenty of opportunity for UK businesses to add value here. But SMEs do very well in the creative and ‘experience economy’ sectors, the latter covering anything from shop and mall fit-out to museum.
“However, there is one big driver that looms over everything,” notes Barrett. “And that is Dubai Expo 2020.” This event, from October 2020 to March 2021, will be the biggest global Expo, with an expected international audience of 25 million. “It will probably be the most important thing Dubai has ever done,” he adds. The opportunity for UK business here is abundant: the building of the 4.38 square kilometre Expo area is just the start. It involves the creation of a new town and retail developments in Dubai South, the extension of the metro system and the full physical and service infrastructure to support all of this
For UK businesses seeking to exploit all these developments, Barrett has some clear advice. "Please do your homework before you come out here," he implores. People need to understand what the market is before doing anything. "Many people think they know the Emirates, having travelled through or holidayed here. But they don’t. The number of British people living here makes it seem all too easy."
To achieve success, the first port of call for UK SMEs is to get in touch with DIT, says Barrett. There is precedent for success. DIT has strong representation in UAE for good reason: in terms of exports to UAE, the UK is the fourth largest market outside of Europe (behind Japan, the US and China). With the right support, the opportunities are many. After all, he adds, "the UK and its business sector is held in high esteem here".