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Dubai – the future business capital of the world?
In recent years, Dubai has emerged as a leading global hub for financial services, logistics, hospitality and trade, making it a popular destination for people to work, live and invest.
A continued commitment to diversify the city’s economy, set out in its Dubai Plan 20211, aims to further improve business opportunities and move Dubai to a sustainable economic model driven by innovation and supported by a business-friendly environment.
Expo 2020 Dubai
Business tourism is one sector that is becoming increasingly important for the city’s economic success. A major event planned for 2020 is a six-month-long exhibition of trade, innovation and products from around the world. Expo 2020 Dubai2, is expected to attract 25 million visitors to the city, with 70% of visitors coming from outside the UAE. The event, described as “a festival of human ingenuity”, aims to “provide a platform to foster creativity, innovation and collaboration globally”.
In line with Expo 2020’s visionary themes of “opportunity, mobility and sustainability”, investments of AED 10.8bn construction and AED 411m non-construction contracts have already been awarded to provide major infrastructure projects for the event, such as air and road improvements. These will benefit the economy long term, with gross domestic product (GDP) growth expected to rise from 1.3% growth in 2017 to 3.4% growth in 20183, according to the International Monetary Fund.
A history of embracing change
“Human ingenuity” has always been key to Dubai’s success. From its origins as a fishing and pearling village, to the financial and business hub it is today, Dubai has consistently recognised that embracing exciting new developments and opportunities is essential in creating a strong dynamic centre. Projects like the building of the world’s tallest tower, the Burj Khalifa, to the world’s biggest indoor theme park,IMG Worlds of Adventure, and the city’s man-made Palm Island archipelagos, are all excellent examples of human ingenuity.
Dubai – a history
The first human settlement in Dubai
Dubai’s natural harbour is established as an independent settlement, becoming the principal port on the Persian coast and a centre for fishing, pearling and trade
Dubai becomes a successful port, with a population of nearly 20,000, and is already popular with expats
The waterway is dredged, increasing the amount of ships able to use the port
Oil is discovered in the Dubai region, with revenue from oil exports is used to finance major investment in transport links and establish schools, hospitals and telecommunications networks
Dubai, along with Abu Dhabi, Ajman, Fujayrah, Sharjah and Umm al Quwain gain independence from Great Britain and form the United Arab Emirates. Dubai International Airport officially opens
World’s largest man-made port, Jebel Ali, and Dubai World Trade Centre open
Dubai begins its strategic investment in tourism and sets up a Free-Trade zone offering tax concessions and custom duty benefits to expat investors
The world’s only seven-star hotel, Burj Al-Arab opens
Projects to build the world’s tallest tower, the Burj Khalifa, and 200 man made islands, known as Palm Island, begins
Dubai becomes one of the world’s top five centres for trade, logistics, finance and tourism, and the Capital of Islamic Economy
Implementation of the Dubai Plan
A background of economic and political stability has provided the foundation for Dubai’s continued progress as a leading centre for trade, logistics, finance and tourism. Its future is looking bright, as it moves away from the region’s dependency on oil to a more diverse economic make-up.
Oil production, which once accounted for 50% of Dubai’s GDP, contributes less than 1% to GDP today. Data compiled by Bloomberg shows the transformation of the economy accelerated as oil surged to a record $147 a barrel in 2008, but continued in the aftermath of the financial crisis when oil plummeted to a low of $26 in 2016.
Ambitions for 2021 and beyond
It’s this creation of a more sustainable economy that is at the heart of the Dubai Plan 2021. Driven by innovation and productivity gains in both capital and labour, and supported by its aim to become the “most business-friendly city in the world,” the plan promotes a diversified set of value-added economic activities that would make Dubai more resilient to internal and global economic changes.
Dubai Plan 2021’s ambitious strategy includes focusing investment and economic policy on a number of key areas:
- Aerospace and Maritime industries in Dubai aim to support its longstanding competitiveness by localising manufacturing capabilities in relevant sub-industries like commercial airlines and the Port of Jebel Ali, respectively
- Pharmaceuticals and medical equipment. Dubai offers opportunities to host some of the many international pharmaceutical companies looking to transfer parts of their plants and research centres abroad, to take advantage of international market expansions and ensure lower business costs
- Consumer goods. Including developing Halal manufacturing as part of its Capital of Islamic Economy strategy
- Increasing passenger traffic into Dubai International Airport
- Boosting its position as a leading financial centre
- Reducing CO2 emissions and increasing the use of renewable energy.
The latest economic outlook published by Dubai Economy, underlines the continued dominance of a diverse economy in the city over the coming years. It also plans to accelerate the transition towards a knowledge economy by allocating 8% of the total government spend to develop performance and establish a culture of excellence and innovation, particularly in cutting-edge technology such as nanotechnology and the Internet of Things.
As well as providing economic opportunities, technology is expected to increasingly impact the workplace with more flexible working patterns and collaboration.
There is also increasing support for startups such as, JustMop, a successful 2017 Dubai-based company that uses technology to provide on-demand cleaning services in the region, which, according to GulfNews4, is recording monthly growth rates of 20%.
A city of growth
These are exciting times for Dubai, and with investment and economic activity set to flourish in the coming years, the city’s place as a leading international business hub looks certain.
Dubai is bringing businesses closer to the world’s fastest-emerging markets, while developing a framework that will shift the traditional model of procurement to one that is based on collaboration.
With such exciting new developments and opportunities on the horizon, it’s no surprise that Dubai remains the number one choice for expats looking to work in the region.