Page 404 - Sustainable Cities and Communities Design Handbook

Business Ventures and Financial Sector Chapter j 19 377

small enterprises are of special importance because they are considered as the
cradle of entrepreneurship, particularly in environments facing high unem-
ployment. Entities of that size play a vital role in both developing and well-
developed economies and are perceived as those creating new jobs and
enhancing competition. Small and medium-sized enterprises (SMEs) control
99% of the business sector worldwide, account for 50% of the global GDP, and
employ 85% of the world’s labor force.
The UAE private sector has been the major vehicle driving the UAE
economy, providing the major part of investments and the biggest contribution
to growth rate. This would have not been possible without the efforts and
support of the government resulting from the policy. The government has been
focusing on identifying a number of ways to support SMEs to boost economic
growth and employment in line with the Country Vision 2021. 11 The gov-
ernment defines a small business as a company that employs less than 50
employees and a medium business as a firm employing between 50 and 100
employees.
SMEs in the UAE are considered as the backbone of the economy, rep-
resenting 85%e95% of the total business sector. The SMEs’ contribution is a
critical element of the UAE economy, driving growth and prosperity and
providing diversification, as well as employing large numbers of people in the
country. The Ministry of Economy is currently drafting a new SME Law to
regulate investment in this sector.
To facilitate the development of the SME sector, the government launched
12
for
a loan scheme. Abu Dhabi Emirate established Sheikh Khalifa Fund
SMEs, which offered 246 million AED in funds (2008) for 154 new enter-
prises (industry and services). The fund also conducted training programs for
young men and women on ways to design and choose projects. It aims to
create a new generation of Emirati entrepreneurs by enriching the culture of
investment among young people as well as supporting and developing small to
13
medium-sized investments in the Emirate.
In 2009 His Highness Sheikh Mohammed bin Rashid issued Law No. 23 of
2009 concerning the Mohammed Bin Rashid Establishment for SME’s
Development, one of the Department of Economic Development establish-
ments, recently renamed the Mohammed Bin Rashid Establishment for Young
Business Leaders. One of the Establishment’s key objectives is to help
address the challenges of the funding gap for SMEs and make capital available
to them. This comprehensive financing program is to ease the UAE entre-
preneurs’ financial challenges and facilitate the start-up.

11. http://www.uaeinteract.com/docs/Cabinet_releases_UAE_Vision_2021_(full_text)/39555.htm.
12. http://www.khalifafund.gov.ae/En/AboutUs/Pages/MessagefromtheChairman.aspxhttp://www.
khalifafund.gov.ae/En/AboutUs/Pages/MessagefromtheChairman.aspx.
13. Khalifa Fund was launched in 2007 with a total capital investment of 2 billion AED.