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What is the current state of the UAE’s startup ecosystem?

What is the current state of the UAE’s startup ecosystem?

Despite the Covid-19 crisis, here’s why this is a good time to start a business in the UAE, opines Mana Al Suwaidi, executive chairman, Startegi Advisors

How has the Covid-19 pandemic affected the UAE’s startup ecosystem?

It has encouraged more innovators and entrepreneurs to step forward and take advantage of various government funds and incentives to nurture and grow new businesses. The UAE has announced special stimulus packages specifically for the startup ecosystem to help entrepreneurs plan for the post Covid-19 environment and new business opportunities.

In the past, funding was the biggest challenge that local entrepreneurs faced. Has that changed in recent years?

Yes. Our region has seen some of the best innovators successfully obtaining funding and getting noticed on the world stage as reflected in global investors coming forward. Following the pandemic, even more local and regional entities such as The Sharjah Entrepreneurship Centre (Sheraa), Dubai Future Foundation and the Abu Dhabi Executive Council, as well as InspireU and Social Development Bank in Saudi are stepping forward to offer stimulus packages to help entrepreneurs.

What are the main hurdles that startups now face?

Growth prospects during a pandemic can be challenging as consumers are hesitant to try new products and services put forward by innovators. Also, getting funds for R&D will get tougher in the face of competition, as more ideas and innovations flow from jobless employees looking to set up their ventures.

Also, has the stigma associated with failure among startups now diminished as the market has matured?

In the past, investors were hesitant to support new ideas, but startups with no products to their name have used technology to offer convenience to both consumers and businesses, and have become multi-million dollar powerhouses. The market hence is more welcoming to new SMEs and startups today than ever before.

Which are the segments you see most opportunity in for startups? Is now a good time to set up a business in the UAE?

For people who have lost jobs or have always wanted to be their own boss, there is no better time. It is cheaper to set up and get started now, as business licence fees have been slashed, rents have gone down and manpower is easier to come by during this time.

Lastly, what is the outlook for the future? How do you expect the UAE’s startup ecosystem to evolve?

We will see a surge in the number of startups as people get more innovative and use technology to support businesses that have faced turbulence from unforeseen forces such as Covid-19.

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