Entrepreneurship is, undoubtedly, a key driver of prosperity in any society. It promotes economic growth, encourages creativity and the innovation that is often needed to harness new opportunities, as well as create employment. Most importantly, entrepreneurship can help overcome several economic challenges and achieve national goals. In this context, rebuilding economies and recovering from the devastating effects of the COVID-19 crisis is core to the economic agenda of almost all governments across the world.
The World Health Organization (WHO) classified COVID-19 as a pandemic, pointing to over three million cases and 207,973 deaths in 213 countries and territories. Not only was it a public health crisis, it also severely affected the global market and financial markets. We have witnessed a rise in unemployment, closure of several businesses, significant reductions in income, and disruptions across the world. According to the International Monetary Fund (IMF), the global economy is expected to shrink by over 3% in 2020– the steepest slowdown since the Great Depression of the 1930s.
Under such gloomy circumstances, should entrepreneurs consider taking the plunge now to start a business?
Pandemic or not, there are always challenges to overcome and consumer needs to be met. And a keen entrepreneur always displays a natural inclination to find and fix problems, to make things better, and improve the world at large.
Closer to home, the UAE has always been a popular choice for investment. The government has encouraged entrepreneurship and has made it easy in myriad ways for foreigners to do business. And now, in the aftermath of the pandemic, this might well mean that the time is right to bring your business idea to life. Here’s why:
1. Regulatory reforms In recent times, the UAE government has announced a host of changes to the residency and citizenship laws. Long-term residence visas or golden visas can now be granted to various categories of people including entrepreneurs, who can then live, work, and study in the UAE without the need of a national sponsor, and with 100% ownership of their businesses on the UAE’s mainland.
For an entrepreneur, this is an attractive proposition. Such a visa will offer a certain degree of permanency to the entrepreneur and his family (the visa extends the benefits to spouse and children), and it could act as an added bonus to invest. With the minimum capital pegged at AED500,000 (or those who have the approval of an accredited business incubator in the country), such investments will also aid economic recovery.
Similarly, the UAE citizenship law was recently amended to allow for the naturalization of foreign investors. Again, this move will drive permanency in residency and will bring more investments in the country. For entrepreneurs who may be undecided, such amendments to the law could encourage them to move ahead with their plans.
2. Ease of business Whilst the UAE has always warmly welcomed entrepreneurs, this has now gone up a notch. New digital platforms such as “Invest in Dubai” greatly simplify the ease of doing business, as it covers over 2,000 commercial activities, various license types, and displays all information needed to start a Dubai-based business under one roof. For entrepreneurs still in the exploratory stage, this platform is extremely valuable as it covers various incubator options, information on free zones and funding and much more. The Dubai DED Instant License also now permits entrepreneurs to get a license in five minutes with no pre-approvals.
To encourage young entrepreneurs, Dubai Future Foundation (DFF) runs its University Entrepreneurship Program (UEP) that aims to cultivate an entrepreneurship mindset amongst University students, encourage risk taking and promote a “safe to fail” environment, and build entrepreneurship and a design thinking skillset. Heriot-Watt University Dubai’s Edinburgh Business School is one of the 12 partners for this program. The University has also set up an incubator facility at its new campus in Dubai Knowledge Park where students can run their startup businesses. And finally, expatriate investors are permitted 100% ownership, no longer requiring a local sponsor. An entrepreneur could not possibly ask for a more welcoming or positive climate than this!
3. Changing consumer behavior As everyone will agree, the pandemic has spurred radical shifts in consumer behavior, spanning all areas of life from how we work, to how we spend our free time and live our daily lives. In fact, a study by McKinsey & Company states that many of the trends that we are seeing today are accelerations of past behaviors. For example, we have experienced 10 years’ worth of increase in e-commerce deliveries in just eight weeks! We also know that consumers are spending more time than before on fitness, TV, gaming, and cultivating new hobbies. In terms of purchasing patterns, consumer priorities are more focused on hygiene, cleaning, and staples, while non-essential categories slump.
These shifts in behavior can give rise to opportunities for entrepreneurship by capitalizing on the changes caused by the pandemic. There could be gaps in the market that need to be filled, or a brand-new set of consumer requirements waiting to be fulfilled. Airbnb is a good example of a business that succeeded by taking advantage of changing consumer behavior– following the Great Recession, it was an alternative for anyone who could not afford expensive hotels.
4. Availability of resources A downturn produces several effects that could be to the advantage of entrepreneurs. Borrowing rates and rental costs are lower than usual. Equipment could be cheaper, as businesses that are closing sell off inventory. And there is availability of skilled, unemployed staff. If the business is one where employees can work from home, there are likely to be no lease expenses either.
Rather than catering to pre-pandemic requirements, determining what customers need now is more important. So, if you have a business idea based on a need that you have identified and believe that you can serve that need in a way that is substantially better than current alternatives, the time is ripe to bring your dream to life.
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