How strong is the current climate for tech start-ups?

Tuning into tech

The decline in oil prices has made the region’s drive for diversification even more valid, and technology is one sector that many view as increasingly important. From software development to app creation, gadgets to innovation, tech is a rising star. The UAE ranked 36th last year in a world innovation index (Insead): by far MENA’s leading performer, and proof that previous investment in tech support, education and R&D is paying off.

Looking ahead, the recent partnership between Dubai Investment Development Agency and AstroLabs, for example, has been seen as one strong sign that the outlook for UAE tech start-ups is healthier than ever.

Through the partnership, announced in January, Dubai FDI and AstroLabs will reach out to potential investors and global technology companies considering expansion to Dubai. The aim is to attract the best technology start-ups from around the world. (AstroLabs is a member of the global Tech Hub network of Google for Entrepreneurs, and has provided training and support to over 100 tech start-ups in the UAE, Saudi Arabia, Egypt, Jordan, and Lebanon in the past 12 months.)
The deal follows the announcement last October, when the Dubai Government said it planned to invest AED 4.5 billion to make the Emirate an innovation hub for global technology businesses and entrepreneurs.

That has been mirrored by a similar vision from Abu Dhabi-based Khalifa Fund for Enterprise Development. They plan a new initiative for 2015 aimed specifically at the technology sector, which they view as a priority. Through the initiative, tech companies will be able to apply for financing, training and support.
For local companies already in the sector, these developments are extremely positive. Of course attracting others here means increased competition, but it’s healthy competition. Not least because hi-tech is a sector that tends to work best when a critical mass of companies groups together. Fostering a shared culture, pooling resources and forging partnerships all breed the sense of a ‘tech hub’ that is so powerful – both in attracting even more business and talent, and in fertilizing genuine global successes.
Sentiment in the sector certainly seems to be healthy. In November for example, Dubai Silicon Oasis Authority (DSOA) published a survey among technology start-ups and emerging SMEs in the MENA region. Conducted in collaboration with Google and YouGov, the survey polled 150 tech firms across the UAE, Saudi Arabia, Egypt, Jordan, Lebanon and Morocco. 84 per cent of respondents saw considerable potential for the tech sector in new markets. While part of this positivity stems from the ‘push’ support of the region’s governments and investing bodies covered above, ‘pull’ factors are also playing a part. For example, extremely high smartphone use and the popularity of social media in the UAE is encouraging for tech firms operating in these fields. Similarly, 58 per cent of respondents in the DSOA survey were optimistic about the surge in online shopping and e-commerce in the region as a driver for tech growth.

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