Abu Dhabi set to launch industrial fund for SMEs
Abu Dhabi is set to launch new industrial fund by the end of the year, which would support the growth of the SME sector, a high ranking official of the emirate's Industrial Development Bureau revealed.
Ahmed Al Balooshi, Executive Director, IDB, Department of Economic Development, said Abu Dhabi has been revising its policies and legislation to make it easier and more attractive for small and medium enterprises to invest in its industrial sector.
"SMEs are an essential part of the emirate's diversification plans, and to support them, Abu Dhabi has been revising labour and land lease regulations. We are putting a lot of effort into reducing the operational cost of SMEs and entrepreneurs," Al Balooshi told delegates at the Global Manufacturing and Industrialisation Summit (GMIS) underway in the Russian city of Yekaterinburg.
At a panel discussion that focussed on the role and function of nature-inspired technologies in Fourth Industrial Revolution, the IDB official said the new industrial fund, which is expected to be launched by the end of the year has been designed to support the growth of the SME sector. He did not reveal further details about the fund.
In 2018, the UAE's Securities and Commodities Authority announced plans to launch a platform to finance SMEs. The regulator said it was working with the Organisation for Economic Cooperation and Development and UAE Ministry of Economy, which will provide a regulatory and legislative framework to finance SMEs. Once the framework is approved the financing platform will be launched. The platform would involve funds with the authority to raise financing for SMEs, in a similar manner to collective project financing, SCA said.
According to the Federal Competitiveness and Statistics Authority, the contribution of the SME sector to the UAE's GDP is estimated at 53 per cent in 2019, up from about 49 per cent in 2018. The federal government aims to increase this rate to around 60 per cent by 2021, underscoring the importance of this sector, which encompasses around 95 per cent of the firms in the country and employs 86 per cent of the total workforce in the non-oil private sector.
Suhail Mohammed Faraj Al Mazrouei, the UAE's Minister of Energy and Industry, said shaping the future of manufacturing with new nature-inspired technologies in the 4.0 Industry would be a key factor to transform the world economy for the better. The GMIS Summit provides an ideal platform for policy makers and academia to engage with each other, with the ultimate goal of sharing learnings among as many countries as possible, said the minister.
Khaldoon Al Mubarak, Group CEO of Mubadala Investment Company, who was also a panellist at GMIS, said diversification is key for investment companies too, and pointed out that in the sovereign fund's 20 years of operations, the company's investment portfolio has gone from being 100 per cent focused on the energy sector to under 20 per cent today. He praised the vision of His Highness Sheikh Mohammed bin Zayed, and said the UAE leadership placed great emphasis on how the country was diversifying as an economy beyond oil & gas.
Saeed Ghumran Al Remeithi, CEO, Emirates Steel , explained how UAE's leading steel producer had developed in tandem with Abu Dhabi's diversification ambitions and, having supported the UAE's construction boom, it was now looking to become a catalyst for a downstream metals industry by increasing its flat steel production in the next few years.
He said Emirates Steel was supporting Abu Dhabi's environmental initiatives by reducing its carbon dioxide emissions by 40 per cent through a joint carbon capture project with Abu Dhabi National Oil Company. He predicted that hydrogen would replace natural gas in the steel production process in the not-so-distant future.
Li Yong, director general of the United Nations Industrial Development Organisation, said Industry 4.0 represented the convergence of manufacturing and digital industries, and pointed to drone technology already being used for precision agriculture and food security. Yong said the potential positive impact of the Industry 4.0 for mankind cannot be overstated and that GMIS was created to promote this technology within the manufacturing sector.
Denis Manturov, Minister of Industry and Trade of the Russian Federation, said the new industrial era is characterised by a focus on digitalisation and artificial intelligence. As all countries embrace a new industrial paradigm, Manturov said, they must embrace the important task of rebuilding the biosphere and the key to this is the introduction of nature-inspired technologies.
Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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