What is the role of SMEs in the UAE Economy?

For those who pay keen attention to the trends in the economy, you will observe that the SMEs [Small and Medium Enterprises] are the future, little wonder they get special attention from the UAE [United Arab Emirates] leadership, having confirmed they are critical for economic diversification and growth, as well as pivotal to the development of national human resources. 

With market experts who have carefully x-rayed the SME sector, going by market indicators and projections, the UAE government are not the only one bellowing the SMEs, as fundings and supports have been seen from Khalifa Fund, Operation 300bn, National SME Programme, amongst others to ensure strength for the ever-growing sector. 

In today’s topic, we shall consider the role of the SME in the UAE economy, the number of SMEs in Dubai, who qualifies, and other interesting information around SME for your read. 

Small and Medium-sized Enterprises (SMEs) or Small and Medium-sized Businesses are usually firms with less than 250 employees. 

It is not far from the reality that SMEs make up the bulk of enterprises throughout the world, even in their silos; nonetheless, they are thought to have a significant impact on the GDP [Gross Domestic Product] of a successful country. 

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Examples of SMEs around you are The Dentist, The Restaurant, The Boutique, etc. 

According to statistics by the Ministry of Economy, it has been observed that the SME as a sector employs more than 94% of the total number of firms in the nation and employs more than 86% of the private sector's workers. 

The SME can be said as a driving force in the economy’s GDP, whereby empowering labor, and a means of livelihood for the masses.  

In the UAE, SMEs are seen as critical for economic diversity and growth, as well as for the development of national human resources. In Dubai alone, SMEs account for almost 95% of all businesses, employ 42% of the workforce and contribute around 40% of Dubai's GDP. 

While the rate of emerging markets keeps sprouting every day, trends have shown according to a survey conducted in 2019 that the overall number of SME businesses in Dubai is projected to be 151,875 and has increased at a 9% CAGR, when the SME firm count was assessed to be 72,695.  

If numbers are things to go by, Dubai has celebrated more SMEs than what was projected, and with the supports provided by private enterprises and the UAE government, the future is unwritten. 

A small and medium-sized enterprise (SME) is usually a company with sales, assets, or many workers that fall below a particular level. They usually have a staff strength of less than 250 and are usually seen all around you. 

Examples of companies in this range would be: 

1. Tailors. 

2. Florist. 

3. Dentist. 

4. Restaurant. 

5. Gymnasium. 

6. Software developers. 

Going by the criteria set by the European Union, the business entity can be termed an SME where the employees are fewer than 500, usually 250 and less. 

Although the parameters set could vary with the numbers of employees considering the country, but a great quadrant falls within the 250-employee staff strength. 

Many financing agencies and subsidy providers strive to strengthen the status of micro, small, and medium-sized companies, or SMEs, and hence need your organization to qualify as an SME to get money.  

Certain metrics determine if a business is qualified as an SME, they are: 

1. Staff headcount. 

2. Annual turnover. 

3. Annual balance sheet. 

If any of these parameters are carefully adhered to, they are termed and qualified as an SME, and therefore could enjoy perks entitled to an SME. 

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