Advancing Entrepreneurship in the United Arab Emirates

264 Pages·2018·2.439 MB·English

by  Wasif A. Minhas

WASIF A. MINHAS
ADVANCING
ENTREPRENEURSHIP
IN THE UNITED
ARAB EMIRATES
Start-Up Challenges
and Opportunities
Advancing Entrepreneurship in the United Arab
Emirates
Wasif A. Minhas
Advancing
Entrepreneurship in
the United Arab
Emirates
Start-up Challenges and
Opportunities
Wasif A. Minhas
Higher Colleges of Technology
Sharjah, United Arab Emirates
ISBN 978-3-319-76435-1 ISBN 978-3-319-76436-8 (eBook)
https://doi.org/10.1007/978-3-319-76436-8
Library of Congress Control Number: 2018936327
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To the United Arab Emirates. Jewel of the Middle East and an example to
all young Countries.
Foreword
I am honored and humbled to write this foreword for a book that delves
into a topic which is close to my area of research interest—
“Entrepreneurship”. The topic is of particular relevance to the United
Arab Emirates (UAE) because of a paradigm shift in the growth curve of
this nation in the past decades. The outlook of the local Emirati popula-
tion has undergone a remarkable transformation from the families of the
pearl divers to oil exporters to an ambitious, well-educated, innovative
young generation who are ready to march ahead on their own.
The global crisis of 2008–2009, resulting in widespread unemploy-
ment and unprecedented levels of job loss, provided me with an oppor-
tunity to explore the entrepreneurship intentions among the youth of
UAE. Almost a decade back, I started carrying out primary research
among Emirati youth who had undertaken Business Studies in their
undergraduate programs. It was amazing to witness the immense interest
among university students in starting their own ventures and, most
importantly, Emirati females exhibited exactly the same intentions and
entrepreneurial propensity as their male counterparts—a result that was
an eye-opener in this part of the globe. They cited job creation as their
most important contribution as a future entrepreneur and were extremely
confident of their capabilities. However, the students highlighted the
need for the right environment with a focus on entrepreneurship educa-
tion as the prerequisite to their success. They pointed out the need to
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viii Foreword
develop a generation of people who are more creative and risk-taking and
prepare them for leadership in the new global marketplace.
My first round of studies on entrepreneurial propensity among the
Emirati youth gained the support of Wharton Business School to take
this project further ahead and study the performance of the existing
entrepreneurial ventures, in the form of family business firms in the
UAE. The older-generation entrepreneurs and their family-run busi-
nesses form the backbone of the UAE—an estimated 75% of the private
economy in the Middle East is governed by 5000 families who generate
70% of regional employment. My results indicated that younger and
smaller firms in the UAE had higher market valuations (Tobin’s Q) and
family firms showed strong financial soundness in terms of returns on
assets and equity—a result that was quite contrary to opinions and beliefs
about the Middle East.
My research studies showed that on one hand, there was a remarkable
success story of the family-owned business which highlighted the glory of
the older-generation entrepreneurs in building up the primary and sec-
ondary sectors in the UAE. On the other hand, there is a strong spirit of
entrepreneurship among young Emiratis who need to be exposed to a
conducive environment where they can flourish. Today, the UAE
Government has openly recognized the need for economic diversification
where entrepreneurship, innovation, start-ups, and new enterprises have
to play a significant role in building up a knowledge-based economy.
However, one needs to fully understand and appreciate that the older
model cannot be applied or implemented in the present context. This was
the clear lacuna that was identified in my research—a wide gap that has
emerged today between entrepreneurial intentions and implementation.
As the nation waits for the glorious history of the family-run firms to
repeat itself in the UAE, the ongoing changes in regulations, economic
environment, competition, peer pressure, globalization, processes, and
practices have made it far more difficult for the present generation to
implement their intentions. There is, therefore, a pressing need to bridge
this gap by exploring the possible reasons for the high intentions and low
implementations.
It gives me immense pleasure to introduce this book Advancing
Entrepreneurship in the United Arab Emirates which took up the research
Forewor d ix
from the point where I had left it—with a clear focus on understanding
the barriers, obstacles, and challenges faced by the Emirati youth during
their decision-making process. This research explores the journeys of
potential Emirati entrepreneurs in the UAE and provides very interesting
insights into some of the personal traits that influence the making of a
successful entrepreneur—like the drive for success, the need for achieve-
ment, an attitude for taking risks, and the capacity to innovate. The book
then goes on to delve beyond the basic motivational, inspirational, and
personal characteristics to explore practical solutions in terms of cultural
issues, educational background, access to finance, and government sup-
port, to name a few.
Finally, the researcher proposes a model of entrepreneurship for the
UAE where the themes and sub-themes from the qualitative research
were interconnected to identify distinct pathways for the future actions
of an individual. This exercise also provides a taxonomy of Emirati entre-
preneurs which helps distinguish support for Emirati who are at different
stages of their entrepreneurial journey. The model helps us understand
and realize why and how two individuals with the same entrepreneurial
intentions, ambition, and motivation in their youth end up choosing dif-
ferent career paths later in their lives. This model serves a dual purpose;
first, it offers valuable insights to potential entrepreneurs to better under-
stand their own intentions, perceptions, and also be aware of the chal-
lenges that lie ahead. Second, once the barriers and obstacles are identified,
it gives clear directions to the concerned organizations (government,
policymakers, financial organizations, incubators, and educational insti-
tutions) to provide suitable support mechanisms that help establish an
environment more conducive for further developing entrepreneurship in
the UAE.
In this book, Minhas carried out extensive and intensive research to
identify the issues, barriers, and challenges that are confronting the
Emirati youth today. The book provides the much-needed solutions to
empower them to act on their intentions. The publication would prove
to be extremely insightful not only to future entrepreneurs but also to
government organizations, policymakers, financiers, incubators, and
educational institutions that would have to be strongly involved in
x Foreword
extending the necessary support to potential entrepreneurs in their future
pursuits.
I would like to extend my heartiest congratulations to Minhas for his
valuable contribution in this field and the commendable research he has
undertaken to explore the opportunities and challenges of the young and
aspiring Emirati entrepreneurs.
Higher Education Academy, Heslington, UK Sudipa Majumdar
Middlesex University, Dubai, UAE
Preface
In its short history the United Arab Emirates (UAE) is at a cross roads,
yet again. The country is going through widespread structural changes as
it tries to make a shift from a fossil fuel to a knowledge based economy.
Young Emiratis are needed and expected to lead in this endeavor, espe-
cially as entrepreneurs who not only create wealth but jobs and opportu-
nities, to help the UAE establish itself as a leading global economic power
house. However, when it comes to young Emiratis, studies conducted in
the region highlight participation levels in entrepreneurship are dispro-
portionate to the levels of investment in the sector. Thus, this book seeks
to understand some of the reasons behind this entrepreneurial gap, the
challenges and opportunities, and ultimately how we may be able to
advance entrepreneurship in the UAE. But the rationale to select entre-
preneurship as a research focus goes beyond this immediate need and
stems from a belief that entrepreneurship is needed so much more than
ever before.
As with the UAE, it seems our civilization is also at the cusp of a new
transformational phase, but then it always is, whether it be the fourth
industrial revolution, geo-political events, or indeed the latest economic
calamity. The fact is that our modern civilization is in a constant state of
flux that seems to be increasing in intensity. Change, more specifically
economic change, is a ubiquitous component of human existence. It has
surpassed previously coveted social constructs such as Government or
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