Dubai’s innovation ecosystem

Asia Amanda Salvaterra, innovation ecosystem officer at HIT Foundation, analyses Dubai’s innovation ecosystem.

The study of ecosystems and the choice of Dubai

Innovation ecosystems are complex networks of different actors that work together to generate, develop and disseminate innovations in a territory. By studying the composition of ecosystems through a quintuple helix approach (government, scientific research, business, civil society and the environment) it is possible to understand the process of interaction and contamination that leads to the creation of innovation in a specific territory. Starting from these studies, it is possible to intervene on policies making them more efficient and effective, on the creation of new opportunities (such as courses of study or calls), on the attraction of talents, organizations, companies and financial resources, which can make a territory more competitive at national and international level.

The article presents the summary of the study of Dubai’s innovation ecosystem, which is particularly rich in food for thought and best-practices. The choice of the emirate is due to its reputation for being home to great companies and home to great innovators; Through the study below, we want to understand which elements of innovation could be adapted to the Italian context, in order to make our nation more competitive and digitally evolved.

Dubai in a nutshell: from its origins to a world leader

Dubai is one of the seven emirates that make up the United Arab Emirates (UAE), second in size to the capital Abu Dhabi, but first in commercial and tourist importance. The city is divided into two major areas: Old Dubai and New Dubai; In the first there are tradition and culture, in the second, on the other hand, innovations and tourist activities.

The history of the United Arab Emirates is very articulated and complex, despite the fact that the main developments have only taken place in the last 300 years. The Dubai area, in fact, has been inhabited since 3000 years before Christ, but it was not spoken of as a real city until 1833, the year in which the first tribe settled around Dubai Creek, a natural river present in the area.

In 1892 the United Kingdom took over the guardianship of the emirate, whose economy began to be activated in 1894, through the strengthening of trade (mainly in pearls). From the early twentieth century, Dubai slowly began to grow, until the 1960s, which marked the reawakening of the emirate: oil deposits were discovered, giving rise to the export of black gold. By the end of the decade, the city had the infrastructure it needed to grow: bridges, roads, electricity and water supply networks, a telecommunications system, and an airport had been built. In 1971 the United Arab Emirates was officially founded, with the declaration of independence from the United Kingdom: from that moment on, Dubai went hand in hand with the other emirates, also thanks to the discovery of gas and oil deposits in the Margham desert. The 1980s were characterized by an urban boom and a great effort was needed to accommodate the growing number of inhabitants: in 1990 they reached the figure of 550 thousand, up to 3.3 million in 2019 and 3.6 million today, making Dubai the emirate with the largest population among all seven.

In 2021, the city was voted the third best city to live in for expats from all over the world: one of the reasons is the ease of operating in the area speaking English, together with job opportunities, the ease of starting businesses, the excellent performance of the healthcare system and the high level of training centers. Currently, the people who inhabit the territory are from over 200 nationalities, making the city an international hub.

Dubai today is also known for its artificial architectural works, including the Burj Khalifa, the tallest skyscraper in the world at its inauguration, the “Three Palm Trees” (or “Palm Island”), artificial peninsulas located in the Persian Gulf whose shape recalls that of the tree of the same name, and the “World”, an artificial archipelago made up of three hundred islands that, if seen from above, They recall the shape of our planet with its continents. The Dubai Municipality has also established eight protected areas, covering approximately 31% of the emirate’s total area, to protect, restore and promote the natural biodiversity of the reserves through a range of scientific research, monitoring, education and sustainable recreation initiatives.

Innovation in Dubai: some facts

To study Dubai’s innovation ecosystem, it is necessary to consider all sectors: training, the economic and political set-up, and the level of digitalization of the territory.

The UAE ranks among the top 20 countries in the world when it comes to the quality of education available. Private schools, which make up 90% of Dubai’s education system, offer curricula for the UK, USA, India, France, Canada, Germany and many other countries. The tertiary education sector has grown rapidly: in 2008 there were only 12,000 students enrolled in private universities and colleges, while today the number exceeds 28,000. Among the more than 400 academic programs available, almost 40% concern faculties that revolve around the world of business while the remaining 60% range from research in the field of science and computer science to engineering and design, from law to medicine, from communication sciences to educational sciences.

Dubai is a digital startup hub and international hub that welcomes founders from all over the world. The emirate offers several opportunities: it has many incubators and acceleration programs, which help startups and companies to create innovative solutions for the future in different application areas.

In 2023, the UAE ranked seventh among the countries with the highest per capita income in the world, reaching $53,707, while GDP amounts to about $507 billion, about 10% of the world’s GDP.

Dubai, along with the other emirates, enjoys the reputation of a “Stand Out Nation” (i.e. a nation with a high rate of technological evolution and innovation), and is therefore part of the digital elite that is gradually becoming increasingly competitive in terms of innovation and digital development worldwide.

The social media engagement rate supports the UAE’s reputation in terms of digitalization, having exceeded 100%. The country is also home to gamers (90% of the population claims to play video games) and crypto investors (11.4% of the population owns cryptocurrencies). 26.4% of the population also participates in telemedicine-related initiatives, reflecting the high level of innovation in the healthcare sector. The UAE ranks ninth globally in terms of e-Commerce penetration, and the average digital spend per capita amounts to $3,775, about double the global average.

Politically, Dubai is ruled by a constitutional monarchy, whose leader is known as the Emir of Dubai: His Highness Sheikh Mohammed bin Rashid Al Maktoum, who is also the Vice President and Prime Minister of the United Arab Emirates.

Dubai’s economic policy is based on safeguarding and respecting the freedom to engage in any type of activity; On a trade level, there are few restrictions on imports and exports. Since the establishment of the UAE, Dubai has developed a distinct identity as a modern and dynamic emirate, setting the strategic plan on five areas: economic development; social development; infrastructure, territory and environment; justice and security; excellence in government policy.

In detail of the ecosystem: the “Dubai Free Zones” and the public innovation bodies

A special feature of Dubai’s innovation ecosystem are the “Dubai Free Zones“, geographical areas in which companies can conduct business activities with tax and regulatory advantages, such as exemption from income taxes for a fixed period, and customs concessions for exports and imports. A key feature of free zones is that companies can be 100% owned by foreign investors, without the need for local partners.

One of the key players in the study of Dubai and its free zones is TECOM Group, a public company that carries out real estate activities in the territory of the emirate. Since 1999, it has been developing strategic and sectoral business districts across Dubai, playing a key role in cementing its status as a global hub for business and talent.

The most important realities that TECOM Group has developed are the “citadels of innovation“, i.e. real technological hubs (some in the form of free zones), in which companies and workers can find fertile ground full of ideas for planning innovation. Commercial offices, co-working spaces, and conference rooms are offered in the citadels, while also providing companies with operational support, such as business licenses, work visas, and much more.

The citadels are developed around different areas of application:

• ICT sector, with the Dubai Internet City and the Outsource City. The first citadel is the emirate’s main tech hub and is dedicated to creating a holistic workspace for the city’s tech companies. The second, on the other hand, is dedicated to outsourcing and shared services, such as call centers, data centers, and back-office operations;
• Media & Production: The entertainment ecosystem is characterized by state-of-the-art infrastructure and purpose-built facilities, including sound stages that have supported major film projects. Citadels focused on this sector are the Dubai Media City (hub for the media industry, home to global brands), the Production City (business community oriented to print, publishing and production) and the Studio City (film and television production);
• the digital industry sector, developed by the Industrial City, an ecosystem of integrated offers between industrial land, warehouses, offices and showrooms, and the Dubai Design District, where every day trendsetters and forward-thinking people shape the future of design;
• The Dubai Knowledge Park and the Dubai International Academic City are home to several educational institutions. For example, Dubai Knowledge Park is home to Heriot-Watt University, a renowned UK university that focuses on business, engineering, and social sciences, and the Manipal Academy of Higher Education, an Indian university that offers programs in fields such as engineering, business, and medicine.

Dubai Internet City, as well as other citadels, offers among its services the “Go Freelance” platform, a community of freelancers that simplifies the processes for finding and making project proposals and expanding their network through a marketplace.

Dubai’s government bodies are also pushing for an increasingly innovative environment.

The Digital Dubai Authority (or “Digital Dubai”) was created to develop and oversee the implementation of policies and strategies that govern issues related to technology, data, digital transformation and cybersecurity of the territory. Digital Dubai brings together the expertise of four entities: Dubai Electronic Security Center, Dubai Statistics Center, Dubai Data Establishment, Smart Dubai Government Establishment, to make Dubai a leading global digital economy. Since its inception, Digital Dubai has launched over 130 initiatives in partnership with government and private sector entities. Among the main ones are the Dubai Data Initiative, the Dubai Blockchain Strategy, the Happiness Agenda, the Dubai AI Roadmap, and the Dubai Paperless Strategy.

Another government body committed to the development of innovation is the Dubai Silicon Oasis Authority, which manages the Dubai Silicon Oasis (DSO), a free zone dedicated to technology and innovation. It has been designed to be a technological and industrial hub, hosting companies operating in the fields of ICT, electronics, nanotechnology and technological disciplines. Among the initiatives organized by the DSO, you can find the Smart City of Dubai, the 2021 Strategy, the Dubai Digital Park.

The Dubai Future Foundation is committed to creating a cohesive innovation ecosystem that includes accelerator programs, incubators, labs, regulatory sandboxes, and knowledge platforms, with the aim of designing a city fit for the future.

The foundation’s activities are divided into five strategic areas:

1. Future, Foresight & Imagination;
2. Content And Knowledge dissemination;
3. Capacity Building;
4. Future Design & Acceleration;
5. Future Experience.

Another notable public organization is the Dubai Chamber, whose mission is to represent, support and protect the interests of the business community by creating an enabling environment, promoting the city as an international business hub and supporting business development.

On a commercial level, the Dubai Multi Commodities Centre (DMCC) is very important: it aims to promote commodity trade and foster Dubai’s economic diversification; It is the world’s most interconnected free zone and the main trade and business hub for raw materials. Inside, for example, you will find:

• Dubai Gold & Commodities Exchange, one of the world’s leading commodity exchanges;
• Dubai Diamond Exchange, which promotes the trade in diamonds and gems;
• Global Blockchain Council: created by the Dubai Future Foundation to explore and discuss current and future applications and organize transactions through the blockchain platform;
• Astro Lab: Google’s only technology center partner in the Middle East and North Africa region, created as part of the Digital Economy Acceleration Project.

With the aim of empowering future generations and enabling them to develop sustainable solutions to facilitate the process of knowledge and research in the Arab world, the Mohammed bin Rashid Al Maktoum Knowledge Foundation (MBRF) was established. The Foundation is committed to creating knowledge-based societies across the region by funding research projects, activities and initiatives. In addition, it promotes ideas and innovation, focusing on its main pillars: education, entrepreneurship, research and development.

Despite some “dark” sides related to activities that are not always legal and the lack of integration between the natives of the territory and the varied foreign population, Dubai’s ecosystem is interesting for anyone who wants to build a startup, find work and opportunities for exchange and professional growth.

Free zones are an example of best-practice: they create high entrepreneurial value through the attraction of talent from abroad, thanks to the possibility of growing one’s business without the often slow and complex bureaucracy that characterizes many other countries (including Italy). The citadels of innovation are also a strong point of the Emirate’s ecosystem: unlike some innovation hubs that can be found in Italy (where mainly companies are located), the citadels become the “family” of the workers who live there: there are apartments, restaurants, gyms, cinemas, dedicated transport, doctors’ offices, as if they were small cities in which to build one’s life. Of course, this also has its downsides (lack of separation between private life and work, sectoralization of connections), but it leads to having a solid and constantly active community of innovators in different sectors. (Photo: Startupbusiness)

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