Innovation-driven entrepreneurship: A catalyst for transforming traditional markets in the UAE

The UAE, known for its robust economy and dynamic business environment, has long thrived on the contributions of family businesses. However, in an era marked by rapid technological advancements, the traditional business landscape faces a pivotal moment. The call for innovation-driven entrepreneurship is gaining momentum as a catalyst for shaping the future economies of traditional markets like the UAE. It is proposed to transform 200 family business projects into major companies by 2030 with a market value exceeding Dh150 billion ($40.84 billion).

This article explores the challenges and opportunities associated with transforming successful traditional business ideas into larger, technologically advanced projects, emphasizing the role of family businesses in this transformative journey. According to data from the UAE Ministry of Economy, up to 90 per cent of private companies in the country are family businesses, employing more than 70 per cent of the sector's workforce and contributing about 40 per cent to the Emirate's GDP.

The current landscape: UAE GDP and family businesses

The UAE has witnessed significant economic growth over the years, with a substantial portion attributed to family businesses. These businesses have been integral to the development of the nation's economy, contributing significantly to the gross domestic product (GDP). The new UAE initiative aims to double family businesses’ contribution to GDP to $320 billion by 2032. As the economic landscape evolves, there is a pressing need to engage the owners of traditional and family businesses in preparing for future economies.

As the UAE continues to navigate a rapidly evolving economic landscape, there is a growing recognition of the imperative to actively involve the owners of traditional and family businesses in strategic planning for the future. This involves equipping them with the necessary tools and insights to embrace technological advancements, capitalise on emerging market trends, and foster innovation within their operations. The government, in collaboration with business associations and educational institutions, is taking proactive measures to facilitate the transition of family businesses into a new era of economic sustainability.

Embracing emerging technologies

To ensure the sustained growth of family businesses, there is an imperative to venture beyond traditional sectors and embrace emerging technologies. Key industries such as artificial intelligence, biotechnology, agricultural technology, space sciences, and renewable energy beckon as lucrative opportunities for expansion. However, the transition from conventional to knowledge-driven industries poses a significant challenge – the hesitancy to take initiative.

In the rapidly evolving landscape of global business, the ability to adapt to emerging technologies is becoming increasingly crucial for the sustained growth of family businesses. Traditionally rooted in conventional sectors, family businesses in the UAE are now faced with a transformative imperative – the need to venture beyond the familiar and embrace emerging technologies. This shift is not merely a strategic choice; it is a prerequisite for remaining competitive in a world where innovation is the driving force of economic progress.

The landscape of emerging technologies presents a myriad of opportunities for family businesses willing to step outside their comfort zones. Artificial intelligence (AI), biotechnology, agricultural technology, space sciences, and renewable energy stand out as key industries that promise not only financial rewards but also the chance to contribute meaningfully to societal and environmental advancements.

Challenges: The hesitancy to take initiative

While the opportunities in emerging technologies are abundant, the hesitancy to take initiative poses a significant challenge for family businesses. This reluctance often stems from a fear of the unknown, the perceived complexity of these technologies, and the risk of potential failures. In a landscape where the familiar is comfortable, the leap into the unknown requires a mindset shift and a willingness to embrace calculated risks.

Strategies for overcoming hesitancy

Education and awareness: Providing stakeholders within family businesses with comprehensive education on emerging technologies is crucial. Understanding the potential benefits, risks, and long-term implications of technology adoption can alleviate uncertainties.

Pilot programmes and small-scale investments: Rather than making large, high-risk investments from the outset, family businesses can consider starting with pilot programs and small-scale investments. This approach allows for testing the waters, gaining practical experience, and gradually building confidence.

Strategic partnerships: Collaborating with established players or startups in the relevant technology sectors can mitigate risks and provide family businesses with valuable insights. Strategic partnerships also facilitate knowledge transfer and shared resources.

Incentives and support programmes: Governments and industry associations can play a pivotal role in encouraging family businesses to embrace emerging technologies. Offering incentives such as tax breaks, grants, or support programs can ease the financial burden and incentivise innovation.

Haleema Humaid Al Owais is Vice-Chairperson, Sharjah Consultive Council; Board Member, Sharjah Chamber of Commerce and Industry and InvestBank and CEO of Sultan Bin Ali Al Owais Real Estate.