During recent years, the UAE government has been actively and systematically working on the diversification of the local economy. Although the country has enough oil and gas reserves for several more decades, they are well aware of the limitation of natural resources, and therefore a new industrial strategy relies on SMEs (small and medium enterprises) in the UAE free zones.
SMEs already make up a large part of the local economy. Thus, small and medium-sized companies make up 95% of all companies in the country, they employ over 85% of all workforce in the private sector of the UAE, but this applies to trade and services sectors. As for the industry, the role of SMEs is not so noticeable for now. The new strategy is intended to strengthen the role of SMEs in the local industry. Indeed, now there are not many small and medium-sized industrial companies that can boast a success story in the UAE.
According to the new industrial strategy, Adnoc (Abu Dhabi National Oil Company) will spend up to 40% of its income to pay for services and goods of local industrial SMEs. This should be about 100 billion dirhams per year, which will significantly increase the income of local small and medium-sized companies in the UAE. As it is expected, the market volume of small and medium-size companies in the UAE will increase from $360 billion to $920 billion, that is, an increase of 156%, which significantly improves the investment prospects in the region.
