Entrepreneurship, SMEs and local economic development in Abu Dhabi

235 Pages·2016·4.23 MB·English

ENTREPRENEURSHIP,
SMES AND LOCAL DEVELOPMENT
IN ABU DHABI
Boosting the entrepreneurial
ecosystem
This paper is published under the responsibility of the Secretary-General
of the OECD. The opinions expressed and the arguments employed herein
do not necessarily reflect the official views of OECD member countries.
Authorised for publication by Stefan Kapferer, Deputy Secretary-
General and Director, Centre for Entrepreneurship, SMEs and Local
Development.
© OECD 2016
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TABLE OF CONTENTS – 3
Table of contents
The OECD reviews on “Entrepreneurship, SMEs and Local Development” .....7
Acknowledgments ..................................................9
Acronyms .......................................................10
Executive summary ................................................13
Assesment and recommendations .....................................17
Chapter 1. Setting the context: the Emirate of Abu Dhabi
in the United Arab Emirates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Introduction ...................................................27
The Emirate of Abu Dhabi in the United Arab Emirates (UAE) ...........27
An economic overview of the Emirate of Abu Dhabi ...................31
Entrepreneurship and SME trends in Abu Dhabi. . . . . . . . . . . . . . . . . . . . . . .39
SME and entrepreneurship policies in Abu Dhabi. . . . . . . . . . . . . . . . . . . . . .45
Thematic policy areas ...........................................52
References ....................................................67
Chapter 2. The entrepreneurial and SME ecosystem of Abu Dhabi:
Key stakeholders and the policy framework . . . . . . . . . . . . . . . . . 69
Key stakeholders in the entrepreneurial and SME ecosystem of Abu Dhabi ...69
The policy framework for entrepreneurship and SME development .......80
Conclusions and policy recommendations ...........................98
References ...................................................100
Chapter 3. Human capital development in Abu Dhabi . . . . . . . . . . . . . . . . . 100
Introduction ..................................................100
Issues in human capital development and social inclusions .............102
Human capital development and social inclusion in Abu Dhabi ..........103
The way forward ..............................................113
Conclusions and policy recommendations ..........................129
References ...................................................132
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016
4 – TABLE OF CONTENTS
Chapter 4. Innovative entrepreneurship and SME innovation
in Abu Dhabi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Introduction ..................................................137
Assessment of the Abu Dhabi innovation ecosystem ..................138
Implementing the way forward ...................................145
Policy recommendations ........................................170
References ...................................................173
Chapter 5. Entrepreneurship and SME financing in Abu Dhabi . . . . . . . . . 175
Introduction ..................................................175
The state of entrepreneurship and SME financing in Abu Dhabi .........175
Major stakeholders in entrepreneurship and SME financing .............187
Conclusions and policy recommendations ..........................209
References ...................................................213
ANNEX I. General policy assessment scores ..........................215
ANNEX II. Priority policy actions to strenghten the entrepreneurial and
SME ecosystem of Abu Dhabi ............................217
ANNEX III. UAE federal laws affecting doing business in Abu Dhabi ......229
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016
TABLE OF CONTENTS – 5
Tables
Table 1. Overview of UAE Vision 2021 29
Table 2. Abu Dhabi’s GDP nominal growth, 2009-2013 31
Table 3. Abu Dhabi’s export volumes, 2008-2103, and as a percentage
of GDP, 2013 32
Table 4. Abu Dhabi’s Foreign Direct Investment flows, 2008-2012 32
Table 5. Percentage Distribution of Public Expenditures in Abu Dhabi 33
Table 6. Contribution to Abu Dhabi’s GDP by main economic sector,
2010-2013 35
Table 7. Sector distribution of employed population in Abu Dhabi, 2013 38
Table 8. Trends in business licenses in Abu Dhabi, 2009-2013 43
Table 9. Types of Business Establishments in the Emirate
of Abu Dhabi, 2012 43
Table 10. Average enterprise size by sector in Abu Dhabi, 2012 44
Table 11. Types of business licenses in Abu Dhabi 49
Table 12. Free zones in Abu Dhabi 50
Table 13. Closing a business in the MENA region, 2009 89
Table 14. Key supply and Demand Side Challenges in Accessing
SME Finance 178
Table 15. Main characteristics of KFED lending activities 192
Table 16. Main financial information of KFED lending 192
Figures
Figure 1. Inflation rates in Abu Dhabi, 2005-2013 34
Figure 2. Pillars of Abu Dhabi Policy Agenda Vision 45
Figure 3. Abu Dhabi Economic Vision 2030 47
Figure 4. Global and Regional Focus Sectors 48
Boxes
Box 1. Main policy recommendations 25
Box 2. The dualism of the UAE labour market 39
Box 3. The profile of the Emirati entrepreneur 41
Box 4. The federal SME Law 51
Box 5. Main examples of industry-university collaboration in Abu Dhabi 53
Box 6. The work of the Tawteen Council in the area of VET 54
Box 7. Main Federal innovation policies of the UAE 59
Box 8. Issues and trends in access to finance in the UAE 62
Box 9. International examples of inter-ministerial institutionalised
collaboration 79
Box 10. Ireland's SME Advisory Committee 80
Box 11. Ireland's enterprise policy for economic recovery 83
Box 12. Examples of demand-side policies for innovation 87
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016
6 – TABLE OF CONTENTS
Box 13. The importance of insolvency regimes for entrepreneurship
and SME development 90
Box 14. Singapore's bankruptcy law 91
Box 15. The US bankruptcy law 92
Box 16. The French "auto-entrepreneur" regime 95
Box 17. Local good practice: The KFED's kitchen incubator project 97
Box 18. Partnership between the Jordan government and INJAZ JA
to expand entrepreneurship capacity in Jordan 111
Box 19. The Austria National Action Plan for Gender Equality
in the Labour Market (2010-2013) 114
Box 20. The Kanagawa Women’s Worker Collective 118
Box 21. Employment social enterprise “AbilityOne”, the United States 120
Box 22. The start-up subsidy for the unemployed in Germany 123
Box 23. Finland’s Entrepreneurship Education Strategy 125
Box 24. International good practices in entrepreneurship education initiatives 127
Box 25. The Singapore National Science and Technology Board 147
Box 26. The Georgia Research Alliance and Eminent Scholars
Programme, United States 148
Box 27. Managing business incubators: The case of Oxford Innovation 152
Box 28. Interface – the knowledge connection for business in Scotland 154
Box 29. Taiwan’s Industrial Technology Research Institute (ITRI) 156
Box 30. The UK Design Council 158
Box 31. Brighton Fuse: Benchmarking creativity and design
in the United Kingdom 160
Box 32. The seven main operational guidelines for business accelerators 165
Box 33. The Dutch Growth Accelerator Programme 166
Box 34. The Management 4 Growth Programme, Ireland 168
Box 35. Mexico’s Unified Registry of Movable Property Collateral 180
Box 36. Model credit bureau 181
Box 37. Examples of credit mediation schemes 183
Box 38. Credit guarantee schemes 196
Box 39. The Crowdfund Act under the JOBS Act in the United States 204
Box 40. The Vigo Accelerator Programme, Finland 206
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016
7
The OECD Reviews on “Entrepreneurship,
SMEs and Local Development”
This study forms part of the series of OECD Reviews
on Entrepreneurship, SMEs and Local Development. These reviews
examine the opportunities and challenges for entrepreneurship and SME
development and the role that policy can play in case study regions, cities
or localities. They investigate the extent to which the local business
environment is favourable to start-ups and SME growth and assess the local
economic policies in place and the improvements that can be made. The
issues examined include management and workforce skills development,
access to finance, innovation and knowledge transfer, entrepreneurship
and start-ups, internationalisation of SMEs, and the local strategic and
governance framework of entrepreneurship and SME policies.
The reviews follow a methodology which is based on a background
questionnaire, a fact-finding mission, desk research and a local
stakeholder workshop. The final outcome is a report analysing local
framework conditions and policies to support entrepreneurship and
SMEs and identifying priority policy actions and international policy
examples relevant to the identified development challenges. The policy
guidance and recommended actions contribute to the creation of more
entrepreneurial local economies offering better job opportunities and
increased economic growth and resilience.
Governments, development agencies and other interested organisations
at national, regional and local levels are invited to contact the OECD
Secretariat for further information – Jonathan Potter, Senior Economist,
Centre for Entrepreneurship, SMEs and Local Development (jonathan.
[email protected]) – and to consult the OECD website: http://www.oecd.org/
cfe/leed/boostingentrepreneurship.htm.
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016

ACKNOWLEDGMENTS – 9
Acknowledgments
The OECD review on “Entrepreneurship, SMEs and Local
Development in Abu Dhabi: Boosting the Entrepreneurial Ecosystem”
was requested by the Khalifa Fund for Enterprise Development and
carried out by the OECD LEED Programme in partnership with the
Khalifa Fund. The aim has been to assess the strengths and weaknesses
of the Abu Dhabi entrepreneurial and SME ecosystem, identify existing
policy gaps and provide policy recommendations on how to address these
gaps, based on the experience of OECD and non-OECD countries and
regions. The fact-finding mission in which the OECD expert team met
with Abu Dhabi government entities and private-sector stakeholders was
undertaken on the week of 16-20 November 2014, while the main findings
of the report were presented to an audience of local stakeholders in a
workshop organised by the Khalifa Fund for Enterprise Development in
Abu Dhabi on 8 December 2015.
The report was prepared and edited by Marco Marchese, policy
analyst at the OECD, with substantial written contributions made
by Karen Chapple (University of California at Berkeley), Emily Cox
(UAE-based consultant), Marco Marchese (OECD), William O’Gorman
(Waterford Institute of Technology), Ricardo Pinto (Pinto Consulting)
and Stephen Roper (Warwick Business School). The review owes much
to the support and co-operation of Abu Dhabi government officials from
the Khalifa Fund for Enterprise Development and, in particular: Abdullah
Al Darmaki (Chief Executive Officer), Manish Kotwala (Director,
Strategic Planning and Performance Management Department), Ahsan
Ali (Director, Credit Department), and Hadef Al Shamsi (Manager,
Stakeholders Management Unit).
This project was led by Marco Marchese under the direction of
Jonathan Potter in the OECD LEED Programme.
ENTREPRENEURSHIP, SMES AND LOCAL DEVELOPMENT IN ABU DHABI © OECD 2016