Small and medium-sized enterprises (SMEs) play an important role in the UAE’s economy and contribute substantially to income, output and employment.
Acknowledging the importance of SMEs in the country, Crowe Horwath UAE in partnership with the Dubai International Financial Centre (DIFC) yesterday hosted a groundbreaking conference that sought to discuss special fiscal and other support measures to help the sector.
While many small businesses continue to struggle with employment levels, reduced access to finance and increased costs of credit, one thing remains clear: the resilience of the SME sector. Policymakers in the country have applied a diverse range of support processes that are not only targeted on sustaining domestic activity, but also at encouraging SMEs to build international businesses.
The breakfast conference that targeted players in the SME sector included business owners and finance institutions representatives.
Expert panelists included Alexandar Williams, who is presently the Director of Business Development at the Department of Economic Development (DED) – Government of Dubai, Paul Boots, the COO of Beehive, UAE’s first online marketplace for peer-to-peer financing and David Moleshead, the Chairman and Founder of Envestors, a company that has been raising funding for and investing into successful SME’s since 2009 within the MENA region.
The discussion began with a focus on the important role that SMEs are playing in providing employment opportunities to local and expat nationals in the country. SMEs’ greatest contribution in the UAE lies in national job creation. They tend to be more labour intensive and at a macro level, provide a substantial contribution to employment.
Last year, a World Bank survey of 47,745 businesses across 99 countries revealed that firms with between 5 and 250 employees accounted for 67% of the total permanent, full-time employment. SMEs were also creating more jobs than large enterprises.
While the UAE population is expected to grow at a rather fast clip, it is obvious that government sectors have their absorptive limits, as employers. They will not be able to create enough jobs to absorb that many graduates being churned out by universities and colleges. Hence SMEs will have to play a leading role in job creation.
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In his keynote address, Dr Khalid Maniar, the Founder and Managing Partner of Crowe Horwath UAE, called on authorities to move fast to ease access to finance and implement a better regulation agenda, “factors that are key for SMEs to thrive and provide job opportunities in this market.”
“SMEs are the main drivers of job creation, growth and economic diversification in all stages of development. This economic diversification and job creation will not succeed if SMEs do not receive the support they need,” he urged.