Author: Lara Elcheik, SmartCrowd
As the MENA region continues to grapple with high levels of youth unemployment, the thriving startup ecosystem in the UAE has emerged as a beacon of hope, becoming an important source of job creation and economic growth in recent years.
According to the World Bank Group (2021), youth unemployment in the MENA region is among the highest in the world, with over 25% of young people aged 15-24 out of work. This poses a major concern for the region, as youth unemployment can lead to social and economic problems, such as increased poverty and political instability.
However, the UAE’s startup space is helping to tackle this very problem by creating new job opportunities for young people. In fact, the UAE has one of the highest rates of entrepreneurship in the MENA region, with more than 20% of the population engaged in some form of entrepreneurial activity. Further, many of the businesses that are being founded and funded in the region are led by young entrepreneurs, who are creating job opportunities for other young individuals as they scale their companies.
This entrepreneurial behaviour has been driven in part by the UAE government’s relentless efforts to cultivate a supportive environment that spans a wide range of sectors. One such way that the UAE is doing this is through its various incubation and accelerator programs, which provide startups with the necessary tools to help them grow and thrive.
As such, the UAE is home to a number of innovation hubs, including Dubai Internet City and Abu Dhabi’s Hub71 tech ecosystem, the latter of which is backed by SoftBank, Microsoft, and Mubadala Investment Co. These hubs also offer a range of services and resources, including co-working spaces, networking events, and access to a community of like-minded entrepreneurs.
Further initiatives led by entities such as Abu Dhabi Investment Office (ADIO), the Department of Economic Development, ADGM, Mubadala, ADQ, Khalifa Fund and others, have been able to accelerate the growth of the UAE’s startup ecosystem at a speed rarely seen elsewhere in the region. As of now, the UAE is home to over 5000 startups, with startup hubs operating in the major cities of Abu Dhabi, Dubai and Sharjah, all of which provide support for growing digital businesses.
Additionally, the UAE’s startup space is also supported by a strong venture capital (VC) industry, ranking first in venture capital investment for startups in the region, with more than $1 billion invested in startups in 2021. From fintech and healthtech startups to e-commerce enterprises, this influx of capital has helped fuel the growth of a wide range of innovative businesses, providing employment opportunities for job seekers in the region.
But the impact of the UAE's startup ecosystem extends beyond creating job opportunities. In addition, the startup ecosystem in the UAE is also helping young people to develop the skills and knowledge that they need to succeed in the workforce. Many of the programs and initiatives aimed at supporting startups in the UAE also offer training and mentorship opportunities for young people, helping them to build the experience needed to excel in their careers.
Ultimately, the startup space in the UAE is bridging the gap between job seekers and startups in need of talent, with 95% of the UAE’s firms consisting of small and medium-sized (SMEs) or startups, employing 42% of its workers and accounting for more than 40% of the country’s GDP.
Startups from the MENA region, and beyond, are now expanding their global footprint and unlocking growth opportunities within the UAE’s fertile ground, where disruptive ideas are anchored at innovation hubs, and up-and-coming entrepreneurs are able to acquire funding, networking and technical support from big tech giants and wealth funds.
Overall, the UAE's thriving startup ecosystem is contributing significantly to economic growth and youth employment in the MENA region, with many companies actively seeking to hire talented young individuals to drive their businesses forward. Thanks to the UAE’s increasingly pro-active government, excellent infrastructure, diverse expat population, funding opportunities, and access to regional markets, it’s clear that the best is still yet to come.
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