It has been widely accepted that investment in small and medium-sized enterprises (SME) is vital if the UAE, and the Gulf in general, wants to increase the number of nationals working in the private sector.
Achieving that goal requires the development of a culture of entrepreneurship and innovation as well as investment in infrastructure. While this may seem an inopportune time to be learning lessons from the once widely-admired European model, given the current economic crisis inside the EU, a way forward is perhaps suggested by the burgeoning social enterprise sector in the UK and elsewhere. These countries are neatly fusing entrepreneurial zeal and innovative thinking with a social conscience.
Social enterprises can be characterised as businesses that serve some social function (be it working with disadvantaged communities or people, improving health or dealing with environmental issues). While on the surface they share much in common with charities, as with traditional businesses they aim to make a profit through their activities.
Social entrepreneurship is not only an ideal focus of SME development. There are three other key areas where social entrepreneurism should be considered fully as adding value to an economy, such as with the UAE, in the growth and development stage. The first is the ongoing attempt to diversify the economy, as outlined in the various government initiatives, including Plan Abu Dhabi 2030. In a 2007 survey, it was estimated there were 62,00 social enterprises in the UK contributing £24 billion (Dh138.21bn) to the economy and employing 800,000 people. Median turnover for those businesses was £240,000.
Social enterprise can also contribute to reducing the percentage of the workforce in public-sector employment. The large disparity between the proportion of the local population employed in the public sector and the private sector is economically unsustainable. Gulf governments, including in the UAE, have long worked for the nationalisation of the jobs market, to varying degrees of success. For local economies to remain stable in the long-term, and mitigate the socio-economic challenges that accompany economic success, governments have realised the need to ultimately cut the size of the public sector, and at the same time, provide job opportunities where locals can flourish and be productive.
In the UK there have been a large number of services moved out of public sector ownership that are now run as for-profit social enterprises. These include a health provider that moved from the National Health Service and is now responsible for half a million people in northern England, providing a range of primary health services. Another such is a thriving sports management service that runs more than 100 leisure centres across the country. It started life as a failing local authority service.
Furthermore, data from the UK shows social enterprises employ more people relative to turnover than other small businesses and so could have a disproportionately large impact on creating jobs than their numbers would indicate.
Finally, both research and experience show social enterprise provides opportunities for creating opportunities for female citizens. In the UAE, this constituency is both willing and able to play a role in the development of the economy and the renationalisation of the home workforce. All the more so as Emirati women are at least as well educated as men and make up a larger proportion of recent university graduates.
But they still find it difficult to break into traditional sectors of the economy. Today, an estimated 69 per cent of all university graduates are female, but only 12 per cent of the workforce consists of women. Social enterprise offers a viable way of addressing this deficit because it builds on traditional female roles in education and medicine but does so by adopting a private-sector approach that could result in a new class of female social entrepreneurs. It is striking to note among UK social enterprises, 86 per cent of leadership teams include at least one female director.
To capitalise on these opportunities, the UAE should provide students (male and female) with the social entrepreneurship skills to set up their own businesses as an alternative to becoming public employees.
Education is an important component required to enable a seamless transition.
A recent study into entrepreneurs and business owners in UAE showed higher education correlated with the likelihood of starting up a business.
Many of those same practical skills required for success in any private venture - basic accountancy, business law, basic economics, marketing and advertising - are also vital for social enterprise.
The creation and development of an active social entrepreneurship sector in the UAE will be gradual and take a number of years to achieve. However, it is a sector where almost all those employed will be nationals and if done properly will provide real potential to generate jobs and increase productivity.
At the same time, it will help reduce the size of the public sector, while reinforcing both a community spirit and national identity within the population.
Although not offering a panacea to problems of employment and diversifying the economy, exploring social entrepreneurship does seem to offer a number of solutions that have been proven to work elsewhere.
They may well, therefore, play an important role in addressing these challenges in the Gulf.
Professor Rory Miller is the director of Middle East and Mediterranean studies at King's College in London, Mark Napier is the managing director of the UK's Centre for Public Innovation, and Ghanem Nuseibeh is the founder of Cornerstone Global Associates in London
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
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Oscars in the UAE
The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
How Sputnik V works
Killing of Qassem Suleimani
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
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Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
'THE WORST THING YOU CAN EAT'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
Results
2pm: Maiden (PA) Dh 40,000 (Dirt) 1,200m, Winner: AF Thayer, Tadhg O’Shea (jockey), Ernst Oertel (trainer).
2.30pm: Maiden (PA) Dh 40,000 (D) 1,200m, Winner: AF Sahwa, Nathan Crosse, Mohamed Ramadan.
3pm: Handicap (PA) Dh 40,000 (D) 1,000m, Winner: AF Thobor, Szczepan Mazur, Ernst Oertel.
3.30pm: Handicap (PA) Dh 40,000 (D) 2,000m, Winner: AF Mezmar, Szczepan Mazur, Ernst Oertel.
4pm: Sheikh Hamdan bin Rashid Al Maktoum Cup presented by Longines (TB) Dh 200,000 (D) 1,700m, Winner: Galvanize, Nathan Cross, Doug Watson.
4.30pm: Handicap (PA) Dh 40,000 (D) 1,700m, Winner: Ajaj, Bernardo Pinheiro, Mohamed Daggash.
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
MORE FROM CON COUGHLIN
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
