In recent months people in Dubai -most of the expats who make approximately 93% of the population- seriously worry about the stability of their jobs and their future in the country. Low oil prices mean reduced government spending on projects and fiscal deficit for oil producing countries. Moreover, at this point of time, it seems as this will be a rather prolonged development which will affect UAE public spending policies. Articles about layoffs have been popping up in regional newspapers lately. International banks like HSBC and Standard Chartered, along multinational corporations like Chevron and Zurich Insurance amongst others, actively have been downsizing workforces and capacity of operations. The global sentiment in 2015 was “slow growth,” but the outlook for 2016 suggest that the global economic growth will strengthen.
A few key economic drivers are likely to support the stability of Dubai’s economy in the coming years. First of all, the majority of the population is young and it is projected to grow by approximately 20% up to 2020. Secondly, having into consideration the geopolitical instability of MENA region and the recent events in Egypt and Turkey, Dubai’s status of a “safe haven” for regional tourism and as a business hub will be reinstated in 2016. More visitors from across the GCC countries, Iran and the rest of the Middle East can enjoy Dubai’s beautiful beach hotels, modern and stocked up with novelties shopping malls, and the “unique experiences” that multiple theme parks offer. And only if all of these goodies providers lower a little their charges, they will benefit from a stable and increasing inflow of loyal customers. On the other hand, business that are looking to expand their operations in the region can’t find any better professional environment.
As other big cities with growing multicultural and young population, Dubai needs to offer lifestyle beneficial factors to its inhabitants of mostly foreign workers. Money is not the single motivating factor for people to relocate across borders and to change their lifestyles. Wellbeing, quality of life is very important to young consumers who come here mostly from the developing countries of Asia, be it as expat workers or tourists. Unique experiences and luxury items possession is equally attractive. Therefore, all sorts of small businesses providing for such needs have the potential to thrive and grow. The most significant obstacle is high cost of setup in terms of fees and rent, but in the era of technology there is a variety of solutions for such issues.
For example, new suburban districts need grocery stores, laundry kiosks, ladies salons and barber shops, childcare facilities. Property developers have built communities on the outskirts of the city where accommodation is cheaper, but there is nothing else than the residential buildings there. The opportunities are also plenty for small businesses run from home or run by housewives, especially if there is a legal provision to keep them on the safe side.
There are also plenty of opportunities for growth for franchises in the service, healthcare and retail industry. If you have a small cafe in JLT that is doing well with homemade desserts and selected coffee blends, you can definitely try the same concept in Remraam or Falcon City. Large coffee and pharmacy chains are setting up small shops across all residential communities. The same is valid for nail spas, yoga and dance studios.
In the central and well developed areas of Dubai, the small business opportunities are more or less explored. Still, old-fashioned and expensive service providers will have to close down or reposition themselves, while new business concepts can flourish.
Settling down. During the past decade, Dubai has grown at exceptionally fast pace. Tens of thousands family villas and tall towers have been erected in a matter of a year or two, while new roads have been constructed just in weeks. It is not over yet. Now it is the time to fill all of these homes with people. These new consumers, mostly working class expats, definitely will need a lot of services and goods.
Therefore, the successful small business concepts are not limited just to a few niches, but rather to a few all-time well performing industry sectors. These include healthcare, education, technology, hospitality and retail. Small business ventures with modern consumer propositions that are strategically positioned in the right locations have the potential to flourish.
In 2016, Dubai’s entrepreneurial spirit will be more alive than ever! Entrepreneurs will be constantly encouraged with multiple campaigns and initiatives by government and private organizations. They can even find a substantial funding, if they are smart and passionate about their small business ideas.