Sunday, 13 June 2010

Emiratis listened to Bill Gates – can they emulate him?

The UAE has hosted a number of successful and high-profile entrepreneurs in the past few years who have shared their experience of starting businesses. The founder of Microsoft, Bill Gates, visited in 2008 and 2009. Earlier this year the UAE capital played host to Eric Schmidt, the Chairman and CEO of Google, who spoke at the Abu Dhabi Media Summit along with Sunil Bharti Mittal, the Indian philanthropist and billionaire. The list goes on.

Each of these famous businessmen has shared stories of his firm’s journey from a humble beginning to huge success. They are often given a royal treatment that suits their stupendous achievement. The most important people they interact with are Emirati youths who are eager to listen to them, learn from them, and perhaps start their own businesses.

Sadly, the UAE commercial laws do not differentiate between a young entrepreneur and a multinational corporation. Each party must rent an office, appoint a number of individuals depending on its mandate, and pay high fees for licences and other expenditures.

It is therefore curious that we invite and celebrate entrepreneurs when we do not offer our youth the opportunity to emulate them. The message we are sending is “look but don’t touch”, which amounts to a tease. Emiratis can learn from these over-achievers but face a stark reality when they try to start their own businesses.

According to the World Bank’s Ease of Doing Business Index, it is easier for a person to start a firm in Saudi Arabia, which ranks at number 13 in the world, than in the UAE, which ranks 33rd. Here’s a quick comparison with our sisterly neighbour: in Saudi it takes four procedures over five working days to start a business. It would take a person 15 procedures and at least eight working days to start a business in the UAE. In regard to closing down a business, it takes less than two days to do so in Saudi Arabia and five days in the UAE. From starting up a business to winding it down, Emiratis face considerable obstacles.

Contrast this with Larry Page and Sergey Brin, who started Google as a couple of students in a friend’s garage in Menlo Park, California in the late 1990s. Other garage start-ups include Apple, Hewlett Packard and Youtube, which Google went on to buy for $1.6 billion in 2006. Mittal was started with a $500 loan from a parent to establish an exchange for bicycle parts. Microsoft was kicked off by two excited geeks who stayed up late at home working on computer programs.

The common thread in all these stories is that we needn’t burden young entrepreneurs with licensing fees and fancy offices, which can restrict their creativity and finances rather than develop their insights. Would these successful entrepreneurs that we celebrate have been able to set up their businesses in the UAE?

Others would point to the fact that the various UAE governments have gone a long way to support young entrepreneurs by launching initiatives such as the Khalifa Fund in Abu Dhabi, Mohammed Bin Rashid Establishment in Dubai and the Ruwad Fund in Sharjah. But there are two points here I would like to highlight. First, it is disappointing that there is no federal fund for young Emiratis keen on starting their businesses and that individual emirates have to resort to local government funding initiatives. Second, as appreciative as we are of these opportunities, due to the layers of the screening processes and bureaucracy that some projects go through, not all Emiratis are keen on approaching these funds, nor do many of them need to. For instance, I doubt that these funds would have noticed an eager student such as Mark Zuckerberg, approaching them with an idea for a social networking website.

Visiting entrepreneurs such as Bill Gates get the chance to address students the world over, telling them to follow their dreams. But in the UAE, those dreams can fail to launch, grounded by bureaucracy and fees.

The UAE should consider allowing its young entrepreneurs the freedom to innovate without government supervision, support or bureaucracy by creating the right circumstances and environment where ideas can flourish. Sometimes the younger generation knows better which ideas will fly than the mature adults who are supervising them. In fact, the genius of an entrepreneur, whether it is Bill Gates or a young Emirati, is that he or she can imagine opportunities that others can’t.

*This article first appeared in The National on Sunday 13th June 2010

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