UAE, S.Korea discuss plans to drive startup growth in local markets

Abdullah Bin Touq Al Marri, UAE Minister of Economy, held a bilateral meeting with Lee Young, South Korean Minister of SMEs and Startups, to explore the strengthening of cooperation in promoting entrepreneurship and supporting the growth of small and medium enterprises in the two countries’ markets. The meeting took place as part of the K-Business Day in Middle East 2023, which was held at Dubai World Trade Center on June 12 and 13. It was attended by entrepreneurs, startup owners, investors, and business incubators and accelerators from both countries.

The meeting was attended by Shakir Zainal, Chief Business Officer at Emirates Development Bank; Iman Ben Chaibah, Head of Community Engagement at Sharjah Entrepreneurship Center ‘Sheraa’; Ahmed Alwan, Deputy Chief Executive Officer of Hub71; Reem Abdullah, Director of Government and Strategic Affairs at Hub71; and Sheikh Dr Majid Al Qassimi, Founding Partner at Soma Mater.

Bin Touq emphasised the strong, strategic relations ties between the UAE and the Republic of Korea, which continue to grow on the economic, trade and investment fronts, thanks to the shared aspirations of both leaderships to develop them and the frequent exchange of visits by high-level delegations.

He added: “The UAE is Korea’s second largest trade partner in the GCC and the Arab regions as of 2022. The UAE-Korean non-oil foreign trade totaled Dhs3.4 billion ($917 million) in the first two months of 2023, up 9 per cent from the previous year. In 2022, the volume of our non-oil trade exchanges totaled Dhs19.5 billion, reflecting a 14 per cent year-on-year increase.”

The Minister of Economy said: “The UAE exports to Korean markets continue to grow, achieving a notable 35 per cent growth to reach Dhs627 million ($174 million) over January and February 2023. It exceeded Dhs2.8 billion ($781 million) in 2022, up 17.5 per cent.

In terms of bilateral investments between the two countries, Bin Touq expressed confidence in the increasing momentum of UAE investments across various economic and commercial sectors in the Korean markets. The UAE had recently announced its intention to invest approximately Dhs110 billion ($30 billion) in South Korea over the next few years. Currently, the UAE’s investments in Korea are concentrated in several key sectors such as industry, trade, shipping, communications, real estate, and commerce. Meanwhile, South Korean FDI in the UAE reached approximately Dhs8.1 billion ($2.2 billion) as of early 2021, marking a remarkable growth of 73 per cent since the beginning of 2013. These investments primarily focus on the financial, insurance, mining, retail, real estate, transportation, energy, and technology sectors.

The meeting saw the UAE and Korea agree on new plans in the field of entrepreneurship, including programs and facilities to foster startup growth, enhance investments, and facilitate exports to new markets. The two minister also discussed incentivizing and encouraging SME owners and entrepreneurs to invest in the emerging sectors of the economy to enhance their contribution to GDP growth.

Bin Touq underlined the paramount importance of fostering an entrepreneurial ecosystem and driving SME growth as a key focus of the UAE’s ‘Projects of the 50.’ Through collaborative efforts with government and private sector entities at local, regional, and international levels, the Ministry of Economy is committed to enhancing enablers and facilitating opportunities that drive the growth and scaling of startup enterprises, enabling them to expand both regionally and globally. This strategic vision aims to solidify the UAE’s position as a leading global destination for aspiring entrepreneurs and SME owners, he noted.

UAE’s SME landscape: The UAE’s SME sector plays a pivotal role in driving national economic growth and ensuring its sustainability. In 2020, SMEs contributed approximately 63 per cent to the country’s GDP, exceeding Dhs734 billion ($200 billion). SMEs make up 94 per cent of the total private sector companies operating in the UAE, with a staggering 557,000 companies. In line with its vision for the future, the Ministry aims to increase this number to one million by 2030. Moreover, SMEs account for 86 per cent of private sector employment, which underscore their significance and remarkable contribution to employment creation across various economic and commercial sectors.

He continued: “The meeting marks a significant milestone in fostering greater opportunities for SMEs in both countries’ markets. It serves as a platform to facilitate the exchange of experiences and knowledge between the UAE and Korea, particularly in areas such as venture capital financing, modern technologies, and innovative digital solutions. Notably, the UAE serves as a crucial gateway for Korean startups seeking expansion into new markets, particularly in the Middle East and North Africa region.”

The meeting explored the means to enhance cooperation in emerging economic sectors, with a specific focus on technology, artificial intelligence, smart agriculture, and health.