The United Arab Emirates has been known for the massive economy it has built around crude oil over the last few decades. But things are changing now as fossil fuel sales and usage are expected to decrease with more electric vehicles taking the road. Now UAE is thinking of branching out and making the best of the next digital revolution and has been making all the right noises by boosting up its tech industry and startup scene.
In the first half of 2022, investments worth $1.73 billion through 534 deals were brought into the Middle East, up from $1.33 billion in the first half of last year – a sharp 64% rise year-on-year. Of this $1.73 billion, UAE received 37.2%. In 2021, UAE received 46% of all the investments into the Middle East and Africa, said the country’s Ministry of Economy.
It was in 2016 that the UAE started its tech and startup journey by setting up the Sharjah Research Technology and Innovation Park. The aim was to give birth to startups in water management, renewable energy, transportation, manufacturing, and agriculture.
While getting a visa in other countries is difficult, UAE welcomes investors with open arms if they have the talent, especially in digital technology. While permanent residency is not provided immediately, a company can be started within a day in the UAE.
Oil Capital Is Helping Foster Quick Growth Of The Tech Ecosystem
As the UAE has a large capital to deploy, accrued over the years from its oil economy, entrepreneurs’ confidence in incubating companies here is higher. Also, mobile phone penetration of 41.48% allows companies to explore B2C business possibilities. Added to this is the high-quality, world-class infrastructure across UAE, and the tax-free environment is the cherry on the cake.
This early start on the tech road has helped the UAE achieve a unique position by attracting nearly 50% of all regional investments. It also has the highest concentration of high-value talent. This is because UAE started the tech journey early and is gaining from the snowballing effect. It is quite an achievement that UAE is getting the biggest share of the pie as compared to other countries that are bigger geographically and population-wise.
Not just that, the UAE is diversifying quite aggressively. Recently, it announced the setting up of an $800 million fund to invest in the space business. Apart from this, the UAE is also home to the world’s biggest vertical farm, showing the country’s versatility when it comes to investments.
It has created a ministry for artificial intelligence, identifying the future of this emerging technology to lay out the path for this growth industry. Most of this is again possible due to the huge capital they have available in hand.
While other countries in the Middle East are wracked by war and frequent government changes, the UAE has been stable, which is a crucial factor in attracting investors. UAE is determined to wean itself away from oil and is investing in renewables and other digital technologies to be comparable to the best in the world.