If the Middle East and Africa have seen the biggest improvement in the climate for entrepreneurship, then the United Arab Emirates is the country within that region where change to the business environment has been most dramatic. The 2006 Global
Entrepreneurship Monitor study, an influential report on enterprise around the world, ranked the UAE 41st out of 62 countries for the promotion of an environment for start-up businesses and entrepreneurial activities. In the 2007 study, it had risen to 25th.
Professor Preiss of Zayed University, who co-ordinated the UAE GEM study, says that the role of the government has been crucial in enabling this change.
“There is immense government support for entrepreneurs in terms of finance and educational programmes within the UAE,” he says. “The government is highly motivated towards strengthening the basis of the economy, and in so doing there may well be a shift in the balance from the public to private sector. While the public sector in many countries has been a very strong recruiter of graduates, in the future, the private sector is expected to take up a more active and important role in hiring and recruitment.”
“There is immense government support for entrepreneurs in terms of finance and educational programmes within the UAE.”
Ramesh Prabhakar, Managing Partner of Rivoli Group, a luxury goods retailer with around 300 stores across the Middle East, agrees that there has been a sea change in the business environment in the UAE over the past decade. He puts this down to the partnership between government, public and private sector. “The government strategy has been far-sighted. The commitment to create a world-class infrastructure for business – in terms of communications, rapid public sector decision-making, banking and finance – has clearly paid off.”
But there remain some significant hurdles to entrepreneurship in the UAE in terms of infrastructure, bureaucracy and intellectual property. According to Professor Preiss, one of the biggest challenges is the perceived risk of starting a new business and fear of failure. “If a new venture fails in the UAE, there is a tremendous risk under the current legal system that one could be sent to jail if there are any unpaid debts. It’s not like in the US, where after bankruptcy, one can start up another venture a few years later.”
“I spend a lot of time thinking about how we can recruit and keep the best people to build the business.”
In the long-term, availability of talent is also likely to be an issue. “Good people are essential to deliver the kind of service excellence that we as a company expect,” says Mr Prabhakar. “There is a relatively limited labour market in the UAE and a lot of competition for good people. I spend a lot of time thinking about how we can recruit and keep the best people to build the business, about how to share my passion and commitment to outstanding quality with everyone in our business.”
