The Role of Government in Supporting Entrepreneurship ...

1 The Role of Government in Supporting Entrepreneurship & SME Development Mohammed Bin Rashid Establishment For SME Development MBRE 2010. Entrepreneurship Why? Different individuals have different reasons that direct them towards taking Entrepreneurship as a career. Some of these reasons are: .. Knowledge exploitation Surviving Higher purpose Wealth Creation Cool / Life style Innovation / Creativity Inspired by someone Independence / Being the Boss .. Government Role Has there been a particular set of public policies which have served to encourage Entrepreneurship in Dubai? We Don't say NO ! 2. MBRE A Government SME Development Agency Government of Dubai Department of Economic Development Dubai Events Foreign Agencies &Promotions Investment Establishment Office Established in 2002, Joined DED Group in 2008, New Mandate in 2009. 3. Expanding Entrepreneur Development Role to SME Development Role Facilitate, Enable, Support and Develop Programs focused on sectors policy development and advocacy (remove barriers), training & capability development (sector productivity &.)

2 Competitiveness), incubation, access to finance and market access SMEs strategy & Policy Entrepreneurs Industry/sector Knowledge & focus Skills Advocacy Funding Management Resources Funding Markets Markets Know-how Innovative SMEs (SME 500). Focus on Intellectual Property (IP). Creation, Attraction, Ownership, Protection, Commercial exploitation 4. MBRE's Vision, Mission & Roles Vision Dubai as a Global Center for Groom Innovative SMEs Seed Advocate Roles Mission SMEs Development Foster the development of a Entrepreneurship (Groom Dubai's Top flourishing entrepreneurial Development culture and a competitive SMEs). SMEs sector to support Focus on Policy Advocacy, Intellectual Dubai's economic development goals Property, Innovation, Technology & Design- oriented businesses 5. Slide | 5. Moving Forward - The New Economic Imperative Better path Output Productivity (economic growth) New path Need to move to Innovation new growth path More path More labor Moving Forward: a and capital different economic development path From Bigger to Better Dubai's current situation in key Decreasing returns for each sectors, additional unit of labor and Real estate capital Increasing macroeconomic challenges (demographics, environment, infrastructure).

3 Reaching optimal scale Rising cost of growth Reaching minimum scale Inputs 6. Slide | 6. (Labor and capital). Phases of SME Development Execution 2011 2015 (and beyond). 2010. Current MBRE Current MBRE Activities Activities + +. 2002- 2009 Innovative SME financing options, SME Definition including VC capabilities and Licenses &. SME Policy Needs Credit Guarantee Scheme Entrepreneur Dubai SME 500. Relations. IP and Innovation Plan Business Incubation SME capability development Center SME Sector studies SME Development programs Fund Program Training Council Market opportunities BV Community Account Management System for (GPP) Entrepass Scheme Dubai SME 500 by Key Industry Awards Dubai SME 5-Year Plan Sectors Past & Current Baseline Setting &. Activities Self Sustaining Steady State Capacity Building 7. Services & Functions Policy Advocacy Capability Development Business Incubation Development Entrepreneur Advisory Relations Funding Market Access (GPP).

4 Outreach & Marketing 8. Policy Advocacy Role MBRE plays a crucial role in advocating the Government to create an environment conducive to Entrepreneurship and SME Development UAE Federal Government : - New Companies Law Lower Start up cost (Minimum capital requirements were abolished for company establishment). Promote Entrepreneurship - New Bankruptcy Law (in-progress) and reduce fear of failure . - SME Development Law (in-progress) Coordinated support policies, Unified Definition, and Improved statistics 9. Business Environment UAE has improved its ranking in the World Bank's Ease of Doing Business Report From 47 to 33 (2010). It was also listed among the Top 10 Reformers 10. Business Environment Entrepreneurial Activity According to GEM (2009 Global Report): UAE has the highest increase globally in new startup activity 38%. (Comparing 2006-2007 results to those in 2008-2009 ). Competitiveness: UAE has improved its ranking in the Global Competitiveness Report from: 2008/2009: 31.

5 2009/2010: 23. 11. strategy & Policy The role of the strategy & Policy Division is to lead and facilitate the expansion of the establishment's mandate towards a full fledged SME. Development Agency. It has taken the responsibility of the implementation of the following crucial initiatives: SME Definition Foreign IP Attraction Program SME Policy Needs (Entrepass Scheme). IP and Innovation Plan Academic Business Linkages SME Sector studies SME capability development programs SME Development Council Dubai SME 500. Dubai SME 5-Year Plan The SME Definition Any entity engaged in an economic activity, with a legal form (registered as a business either with a Commercial Registry (DED) or with a free zone / industrial zone) and meets the thresholds of employee headcount AND turnover as applicable to the industry group it belongs to (Trading / Manufacturing / Services) as specified : Trading Manufacturing Services Employees Turnover Employees Turnover Employees Turnover Micro <=9 & < = AED 9 mn < = 20 & < = AED 10 mn < = 20 & < = AED 3 mn Small < = 35 & < = AED 50 mn < = 100 & < = AED 100 mn < = 100 & < = AED 25 mn Medium < = 75 & < = AED 250 mn < = 250 & < = AED 250 mn < = 250 & < = AED 150 mn SMEs count for of the total enterprise population in Dubai 13.

6 SME Definition as the Basis for SME Development SME Development SME Definition Policies, Programs and Packages Qualified SMEs SMEs Population based on Policy Total Enterprise (Statistics, Analysis) Criteria (including Population independence). SME Definition Policies, Programs &. Acts as a First-Level Packages can be Sector or Filter size focused .. etc 14. Business Incubation Pre incubation Incubation Process Graduation 1 Year or less 1- 3 years 3rd year Idea to plan Early stage Classic incubation Graduation Services Include: (Idea Lab, Research, Support, Counseling, Training &. Development, Business Plan preparation, Network, Marketing, Accounting ). Hot Desk Workstation Executive Office * The business incubation centre also provides virtual offices Entrepreneur Relations The ER unit of MBRE is one of the imperative components of the Establishment since it provides the following: One Stop Shop concept. Trade License subsidy based on criteria (for 3 years).

7 Exemption of other Government registration fees Free 3 years Membership with DCCI. Implement all MoUs with Government and semi-gov. entities Guide the Entrepreneurs for the process of the opening the business Reduce the cost and time for the start up (1 Day Process). Government Procurement Program (GPP). Decree by Sheikh Mohammed Bin Rashid to allocate 5% of all Government and semi-gov. departments' procurement budget to businesses registered with the Establishment In the past 6 years, GPP managed to facilitate the following amount of contracts: Year Contracts Amount 300. 64,000, Millions 2003. 250. 2004 68,000, 200. 2005 80,000, 150. 2006 100,000, 100. 2007 150,000, 50. 2008 266,000, 0. Total 728,000, 2003 2004 2005 2006 2007 2008. Funding Financing mechanisms: Credit Guarantee Scheme (since 2003) Loans up to AED 3 million. Seed Capital (2010) Low Interest Rate Venture Capital (2011) Maximum 3 years grace period Endowment Fund (2011). 5 years settlement period Minimum financial Strategic Initiatives: contribution by the applicant SME Friendliness Index is 20 % of the project total cost.

8 (For Financial Institutions) (2010). SME Financial Reporting Requirements (2010). SME Development Bank (Study). SME credit rating bureau (Study). Asset Register (Study). SME secondary listing (Alternative Investment Market) (Study). CGS- Composite Business Score Entrepreneur Behavioral Traits, Technical Expertise Knowledge, Understanding of the business Professional experience, Reputation & Credit History Industry Industry Characteristics, Barriers to Entry &. Competitive Positioning, Macro-economic factors Project Business Model, Marketing Capabilities Organizational & Operational Capabilities Project Exit barriers, Country Risk Composite Score of Business Financials Success & Viability Financial performance & viability, Project efficiency &. returns, Business Sensitivity Analysis Marketing & Outreach Mohammed Bin Rashid Awards for Young Business Leaders An event organized to award exceptional entrepreneurs. It is aimed at creating a competitive environment amongst the young entrepreneurs of the UAE and the Arab countries.

9 Young Entrepreneur Competition (YEC). A 3-5 day activity where students from different private and public high schools set up their stands and sell their products in a competitive environment located in Dubai. Franchise Middle East Exhibition An exhibition that will feature international and local franchise opportunities Achievements 9,000 entrepreneurs assisted through Development Advisory Services 650 SMEs facilitated to obtain licensing and registration services AED 728 million worth of Government Contracts facilitated through GPP. 250 Start-Ups Incubated 50 Projects funded through network of 8 Banks (Credit Guarantee Scheme). 40 Service Providers co-opted into our Service Providers Network 2,000 students with 550 projects organized over 5 cycles of Young Entrepreneur Competition . 50 Arab entrepreneurs awarded the Young Business Leaders Award in the last 5 years 21. Success Stories Mohammed Saeed Harib Dr. Lamees Al Shamsi Fathiya Ahmed Osman Lammtara Pictures Shiffa Cosmetics Heritage for Henna Freej 3D animation Manufacture (Retailer, Franchiser, Exporter).

10 Business Village (BV). A Collaborative Ecosystem dedicated to Value Creation through single point contact with potential high growth Business Opportunities. Objectives: Economic Development Investment Opportunities Knowledge & Technology Transfer Features: One stop shop (Licensing, Labor, Immigration, Banks, ..etc). The largest Business Incubator in the region Focus on IP & Innovation 1 million sqf of office and retail space Launched in January 2010. Business Village (BV). "Everyone dreams, but only the leader can change dreams into reality". His Highness Sheikh Mohammed Bin Rashid Al Maktoum Vice President, Prime Minister of United Arab Emirates and Ruler of Dubai. Thank You