Top 10 SME trends in UAE in 2019
Small and Medium Enterprises (SMEs) have a vital role to play in the economic development of UAE. According to the Dubai Chamber of Commerce and Industry, SMEs contribute 90% of jobs in the private sector. In addition, the SME sector contributes 30% to the national GDP, says a paper released at the second India-UAE Partnership Summit (IUPS). In view of the important role that SMEs play in the economy, we take a look at the top 10 SME trends in the UAE for 2019.
- Artificial intelligence
Artificial intelligence (AI) will continue to make rapid strides across various industries. According to Gartner research AI augmentation is expected to generate $2.9 trillion in business value and recover 6.2 billion hours of worker productivity, by 2021. The UAE leads the Arab region as far as adoption of AI solutions is concerned and is set to see an annual growth rate of 33.5%, according to a report prepared by the Dubai Technology Entrepreneurship Campus, in collaboration with ArabNet and startAD. It is anticipated that SMEs will begin to adopt low-cost AI like chatbots and machine learning into their businesses instead of broad-scale AI integration.
- Sustainable development will rule
In 2019 SMEs in the UAE can’t lose focus of the fact that sustainable development has become the global buzzword and that they will have to put environmental and ethical issues on the top of their agenda. Millennials see actions of businesses as crucial to combating climate change and other sustainability problems and are more likely to buy ‘green’ products. Thus SMEs will no longer be able to neglect the issue of sustainability.
- Remote working will be on the rise
Remote working has grown by leaps and bounds across the globe and UAE is no exception. The two main drivers of this change in work behaviour are the advent of high speed Internet and the increasing number of millennials in the workforce. According to the Dubai Statistic Centre, 50.9% of male employees and 51.7% of female employees in Dubai were millennials in 2016. According to a forecast by research site Brookings Now, Millennials will represent 75% of the global population by 2025. As millennials are not so enamoured by the typical 9-5 work day it is logical to conclude that as more and more millennials enter the workforce remote working will also rise and SMEs will have to adjust to this new reality.
- Fintech will continue its forward march
Bankers and analysts say that the UAE has taken a lead in fintech investments and banking technology adoption in the GCC and MENA region. This development will pay rich dividends for SMEs by significantly lowering their funding costs.
The FinTech Hive launched by the Dubai International Financial Centre (DIFC), a first-of-its-kind accelerator in the region that will bring together technology companies and financial firms on the same platform, mentor them and localise and customise technology is slated to play a leading role in this direction. Funding for fintech startups and projects in the Middle East has grown by 270% in 2017, according to Wamda, and the number of regional fintech players is forecast to more than double, from 105 in 2016 to over 250 in 2020. It is safe to assume that UAE will play a leading role in this growth.
- Platform-based infrastructure
Across the globe, an increasing number of SMEs will switch from their stand-alone, on-site software systems to an integrated, cloud-based software solution operating on global Cloud platforms. These platforms provide SMEs access to the best innovative software solutions and services which were beyond their reach till now.
- On the go marketing will continue to gain momentum
SMEs will have to devise strategies to make beneficial use of new technologies like smartphones, wearables, tablets, smartwatches and other gadgets that offer instant online connectivity. SMEs will have to bear in mind that this instant connectivity allows consumers to check facts, product details and reviews almost instantaneously and that this plays a huge role in their final decision.
- Visual storytelling will gain in importance
Going forward as more and more Gen Z members enter the market as buyers it will become imperative for SMEs to deploy visual storytelling in their marketing narrative if they want to stay relevant in today’s world and connect with this increasing tribe. Visual storytelling is a major key to social media marketing success.
- Rise of digital technology
Digital technology is changing the way people live and work in the UAE. It is an enabler for SMEs as it provides them with a level playing field vis a vis big companies but at the same time, it presents challenges for the SMEs to remain innovative and continuously adapt to the changing market. SMEs need to make full use of digital technology including drones, IoT and virtual reality to create a new entrepreneurial landscape.
- Banking will continue to change
The global banking industry is already undergoing significant changes with a rapid push towards digitalisation. Digital banking is forecast to grow to over two billion users by 2020. In addition, massive disruption is expected in payment modes. Banks in UAE are set to adopt changes that will aid them to be in tune with a digitally aware population. The UAE Government and the Central Bank realise the importance of SMEs and are keen to increase their contribution to 70% of the national economy by 2021. Keeping this goal in mind, the Central Bank of the UAE is working on initiatives to help smaller businesses get access to fresh funding at more accessible rates. Moves are afoot to revise rules and operating procedures for lenders who deal with SMEs.
- Mobile focus
The smartphone market is seeing a boom in the UAE. According to a 2016 Google research UAE was ranked number 1 in global smartphone penetration at 73.8%. SMEs are expected to make increasing use of mobiles – SMS and voice communication – along with mobile apps. It is expected to not only help them reach an increasing number of customers but also make their operations cost-efficient.
All of these are the important trends that SMEs in UAE would need to address this year as they strive to achieve new heights in their entrepreneurial journey.