In recent years, the United Arab Emirates (UAE) has emerged as a global leader in promoting entrepreneurship and economic diversification. Recognizing the need to move away from its heavy reliance on oil and gas revenues, the UAE government has implemented various initiatives to encourage the growth of small and medium-sized enterprises (SMEs) and attract foreign investments. As a result, the UAE has become an attractive destination for entrepreneurs from around the world, with the country ranking fourth globally in the Global Entrepreneurship Index (GEI) 2020.
This article aims to provide a comprehensive analysis of the factors that contribute to the success of ethnic entrepreneurship in the UAE. We will examine how personal, business, and environmental factors influence the entrepreneurial success of ethnic entrepreneurs in the UAE. By understanding these factors, policymakers and potential entrepreneurs can gain valuable insights into how to promote and enhance the success of ethnic entrepreneurship in the country.
The Need for Ethnic Entrepreneurship in the UAE
The UAE’s population is predominantly made up of expatriate residents, with non-citizens accounting for approximately 88.5% of the total population. These expatriates, primarily ethnic entrepreneurs, play a significant role in job creation and economic growth in the country. However, the success of ethnic entrepreneurship in the UAE faces unique challenges, including a cultural preference for public sector jobs and a lack of entrepreneurial culture among Emiratis.
To address these challenges and promote the growth of ethnic entrepreneurship, the UAE government has implemented various policies and initiatives. These include legal reforms to allow 100% foreign business ownership, the overhaul of bankruptcy laws to ease financial obstacles, and the introduction of stimulus packages to support startups and SMEs. Additionally, the UAE has been actively attracting foreign direct investments (FDIs) through the establishment of favorable investment policies and the provision of long-term residency visas for investors and specialists.
Factors Affecting Ethnic Entrepreneurship
Research has identified several factors that influence entrepreneurial success, including personal, business, and environmental factors. Personal factors refer to the individual characteristics and skills of the entrepreneur, such as risk behavior, educational background, and experience in the industry. Business factors include network and connections, support from ethnic groups, availability of funds, and the uniqueness of the product or service. Environmental factors encompass the location of the business, regulatory frameworks, macroeconomic conditions, and the ease of doing business in the UAE.
The success of ethnic entrepreneurship in the UAE is determined by a combination of these factors. While personal and business factors play a significant role in achieving success, the UAE’s environment, including its regulatory frameworks and economic conditions, also influences the outcomes of ethnic entrepreneurs.
Research Methodology and Data
To investigate the factors that contribute to the success of ethnic entrepreneurship in the UAE, a mixed-methods approach was adopted. Primary quantitative data was collected through a survey of 103 entrepreneurs, while qualitative data was obtained from in-depth interviews with ten expatriate entrepreneurs. The survey covered various aspects, including demographic information, the success of their businesses, and the factors that influence their success.
The survey instrument was pretested to ensure its reliability, and feedback was obtained from academic researchers and businesspersons familiar with the topic. The sample for the survey was selected using a simple random sampling technique, targeting ethnic entrepreneurs in the UAE.
Findings and Discussion
The findings of the study revealed that personal and business factors have a significant impact on the success of ethnic entrepreneurship in the UAE. Personal factors, such as risk behavior, educational background, and experience in the industry, were found to be crucial in achieving entrepreneurial success. Similarly, business factors, including network and connections, support from ethnic groups, and availability of funds, played a key role in determining the success of ethnic entrepreneurs.
However, the study also found that environmental factors, such as the UAE’s regulatory frameworks and macroeconomic conditions, had a relatively insignificant impact on ethnic entrepreneurial success. While these factors were expected to play a significant role, the qualitative data from the interviews confirmed the limited influence of the environment on the success of ethnic entrepreneurs.
The findings of this study have important implications for policymakers in the UAE. The government’s efforts to promote ethnic entrepreneurship should focus on enhancing personal and business factors that contribute to success. This includes providing support and resources to improve the skills and education of entrepreneurs, fostering networks and connections within ethnic communities, and ensuring access to funding and financial support for startups and SMEs.
Additionally, policymakers should consider the unique challenges faced by ethnic entrepreneurs in the UAE and tailor their initiatives accordingly. This may involve providing targeted support and mentorship programs, facilitating cultural integration and networking opportunities, and addressing specific regulatory barriers that affect ethnic entrepreneurs.
In conclusion, ethnic entrepreneurship plays a vital role in the UAE’s economic growth and diversification efforts. Understanding the factors that contribute to the success of ethnic entrepreneurship is crucial for policymakers and potential entrepreneurs alike. This study highlights the significance of personal and business factors in achieving entrepreneurial success, while also recognizing the limited impact of environmental factors.
By focusing on enhancing personal and business factors and addressing the unique challenges faced by ethnic entrepreneurs, policymakers can create a conducive environment for the growth of ethnic entrepreneurship in the UAE. This will contribute to the country’s long-term economic diversification, expansion, and enhanced performance, ultimately leading to sustainable and inclusive economic development.