The United Arab Emirates focuses on innovation to further diversify the economy and lay the foundation for becoming the Silicon Valley of the Middle East. The government has announced the creation of a technology hub in Abu Dhabi and monetary incentives to attract startups and venture capitalists, seeking to transform the UAE capital into a preferred destination for tech companies.
Named Hub71, after the UAE’s founding year, the hub will provide a dynamic environment for innovation and entrepreneurship and will provide $367 million in investment in funds and start-ups in its first five-year cycle.
The new technology hub occupies four floors of a building in the capital’s financial district.
Also drawing on the government’s Ghadan 21 program – a series of economic stimulus measures worth $13.6 billion – Hub71 will also be able to offer financial incentives to start-ups, including discounted licenses, office space, residential housing and health insurance. Specifically, it will offer subsidies to startups, including 100% subsidies for housing, office and health insurance for up to five full-time employees for two years, and subsidies of up to 50% for three years for tech companies with six to twenty-five full time employees.
For the first time, Hub71 will bring together three fundamental pillars essential to the success of the Abu Dhabi technology ecosystem: provision of capital, enablers and strategic partners. Abu Dhabi Global Market (Adgm) will be the reference point and home for Hub71.
Abu Dhabi aims to be the gateway to emerging markets such as India, China and Africa, but also to established markets in Europe and North America. The UAE ranked 26th globally and third in the MENA region in 2018 in the Global Entrepreneurship Index and is aiming to rise in the rankings. So far, 93 percent of startups in the country are based in Dubai. According to studies undertaken on at the Annual Investment Meeting held in Dubai from 8 to 10 April, of the over two-thirds of start-ups in the UAE, around 69 percent are active in e-commerce, infrastructure, and software. Of these, 52 percent are Business to Consumer businesses and 93 percent are based in Dubai.
In 2018, 366 investments were made in startups based in the Middle East and North Africa (MENA) region amounting to $893 million total in funding, according to a MAGNiTT startup platform report released in January. The increase in investments compared to 2017, in which $679 million were invested, is equal to 31 percent. The number of transactions increased by 3 percent on an annual basis.