#SWS2014 - Dubai SME Trends

Organized under the slogan “Enabling Global Ambitions”, the SME World Summit 2014 was organized in Dubai on March 26 and 27, 2014. Small to Medium Enterprises (SMEs) currently account for more than 70% of the economy, and in light of Dubai recently being awarded the Expo 2020 bid, it is only logical to expect that more individuals will consider starting up their own businesses.

SME World Summit 2014

During one of the panel's, Essam Disi, Senior Manager of Strategy and Policy Department at Dubai SME, presented the following statistics as pertaining to small and medium enterprises operating within the Emirate:

• 51% of Dubai SMEs are exporting to other countries as compared to 44% of SMEs in Europe, and 18% in New Zealand
• 13% of Dubai SMEs have implemented some level of innovation
• 21% deployed advanced IT systems
• 6% of SMEs have online ordering capabilities (12% in Europe)
• 26% provide need-based or comprehensive training to their employees
• 24% have a regular KPI-based performance evaluation
• 34% have a formal organizational structure
• 50% maintain audited financial statements
• 8% use their personal money to finance to start a business
• 23% have accessed bank finance in the last 5 years (56% need finance)
• 19% have a high scalability potential due to high overhead structures, coupled with high existing capacity utilization levels

The SME ecosystem in Dubai currently compromises of the regulators, the financial institutions (banks), and the owner of the SMEs. Those owners who were in attendance during the Summit highlighted that financing was one of the key challenges they faced. Roberto Rocha, Senior Advisor at the World Bank, during his keynote speech on "The Development prospects of SME sector in Dubai in light of winning of the Expo 202 bid" highlighted the following constraints to SME financing in the MENA region:

1. Lack of a strong financial infrastructure
2. Gaps in legal and institutional framework
3. Ineffective policy interventions
4. Good private initiatives that are not well disseminated

Therefore, the message from the Summit is clear. For SMEs to flourish in Dubai's booming economy over the next few years, they will need to improve drastically on the financial reporting mechanisms, and put in place a more formal and organized structure for it to operate in. There is also a call for the financial institutions to facilitate lending mechanisms for SMEs, and for regulations to be put in place to protect and support the those organizations. 

Are you an owner of a SME business in Dubai? What are your thoughts on this?