Consumer to Creator: Advancing Entrepreneurship in the UAE

From Consumer to Creator: Advancing Entrepreneurship in the UAE
Oksana Tashakova and Sumei FitzGerald—Wealth DynamicsUnlimited
©Tashakova Consulting, JLT 2015 Page 1
Education and Empowerment
From Consumers to Creators:
Advancing Entrepreneurship in the UAE
Oksana Tashakova--Founder of Wealth Dynamics Unlimited
with Sumei FitzGerald
September 2015

From Consumer to Creator: AdvancingEntrepreneurship in theUAE
OksanaTashakovawith Sumei FitzGerald--Wealth DynamicsUnlimited
©TashakovaConsulting, JLT 2015 Page 2
Oksana Tashakova
Helping people transform
from Employees to Entrepreneurs
Experienced corporate and online marketer,
business owner, speaker and conference
organizer, Oksana Tashakova works with
individuals, teams, leaders and
organizations to improve performance and
drive change.
A professional coach, entrepreneurial
educator and personal branding expert,
Oksana is also a regular blogger and
columnist for Gulf News and Khaleej Times.
She has appeared on the hit show “The
Entrepreneur” as a workshop provider and
has spoken at events such as the GOV HR
Summit 2013—Connecting People with
Performance.
Wealth Dynamics Unlimited is a premier
entrepreneurial education and event venue
that focuses on career development, wealth
creation, startup strategies, brand
marketing, business models, business
management for UAE residents and
international clients.
Contact Information:
http://wealthdynamicsunlimited.com/
+97144343570
Tashakova Consulting, JLT
PO Box 634264
Dubai, UAE

From Consumer to Creator: AdvancingEntrepreneurship in theUAE—Wealth DynamicsUnlimited
OksanaTashakovawith Sumei FitzGerald ©TashakovaConsulting, JLT 2015 Page 3
Content
Executive Summary Page 6
Introduction Page 8
1Buildinga Knowledge Economy Page 11
Phases of Economic Development
SME’s as EconomicDrivers
Vision 2021
Social Capital
The WorldHappiness Report
The Legatum Prosperity Index
The UAE Difference
Page 12
Page 14
Page 15
Page 18
Page 20
Page 22
Page 25
2Barriers to Entrepreneurship Page 27
Faulty Networks
The Talent Challenge
Self Efficacy
Management
Marketing
Emirati Youth, EntrepreneurshipandEmiratization
ExpatriateTalent
Productivity
Page 28
Page 32
Page 35
Page 35
Page 35
Page 37
Page 44
Page 47

Private/PublicSectorDivide
National Identity Fears
EntrepreneurialSources
Knowledge Sharingand Nationality
Mindsetand Motivation
EmployeeEngagement
Emirati Mindsetand Motivation
ExpatriateMindset andMotivation
Page 47
Page 49
Page 51
Page 53
Page 60
Page 64
Page 69
Page 74
3Entrepreneurial Catalysts Page 80
EntrepreneurialEducation as a Catalyst
Discourse for Development
Networking
Target Marketing
Lean Business Models and Marketability
Management
IntergenerationalLearning
Agility
Career AdvancementandIntrapreneurship
EntrepreneurialAwareness
Social Mediaand Digital Marketing
Accountability andAlignment
Business Tourism
Page 89
Page 92
Page 94
Page 95
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Page 97
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Page 107
Pge 109

4 Brand UAE Page 115
UAE Brand Index Ratings
Brand Finance
FutureBrand
UnlockingBrand UAE
Nation BrandThemes
Awareness is not Enough
Branding Goes BeyondTourism
Inclusivity is Required
CompetitiveIdentity
From Artificeto Authenticity
WhatMoney Can Buy: The Dangers of Excess
StereotypesandRealities: National Identity
A House of Brands: Competition andCollaboration
Locals Matter:LivedCities and AuthenticExperience
PersonalBranding as an EntrepreneurialModel
The “Made In” Factor
Glocalization
Home-Grown UAE
Cultural Marketing
Diaspora Marketing
Page 117
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The Diversity Dividend Page 179
5CosmopolitanCities andGlobal Citizens Page 186
Global Cities
Cosmopolitan Cities
Global Citizens
Third Culture Kids
Cultural Marginality
ConstructiveIdentity and Citizenship
The New Cosmopolitans
Page 187
Page 194
Page 197
Page 200
Page 203
Page 206
Page 211
Conclusion PioneeringUAE Page 217
The Youth Advantage
Visionary Leadership
Tribal Roots
Islamic Principles
Human Capital
CollectivistInsights
Change Readiness
Progress
Page 218
Page 219
Page 219
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Page 228
References Page 231

Executive Summary
It is only fitting that the theme of Expo 2020 Dubai is Connecting Minds,
Creating the Future as connection and creation are primary themes in From
Consumers to Creators: Advancing Entrepreneurship in the UAE.
Committed to diversification and the transition to a thriving knowledge
economy, the United Arab Emirates recognizes that it must ignite
entrepreneurship in its citizens and recognizes that collaborative partnerships
are vital for a robust entrepreneurial ecosystem.
The UAE has worked hard to attract international talent and global businesses;
it’s launched initiatives to improve the educationalsystem andinfrastructure; it
has built incentives for Emiratis to enter the private sector and created
entrepreneurial incubators to drive small business launches.
UAE leaders have also invested much in research but unfortunately, most
drivers of entrepreneurship are basedonWesternmodels ofdeveloped, rather
than developing, countries and lack deep insights into the dynamics of
globalization and localization.
Dubai makes note of this on the Expo 2020 website stating that “there is a
growing need for new, universal models for sustainable economic
development and financial stability,” that “this need is more pronounced…as
more emergingnations jointhe global economy,” and that the Expo “seeks to
harness new models for the flow of financial and intellectual capital to foster
entrepreneurship and innovation.”
Three subthemes will be featured at the Expo: Sustainability, Mobility and
Opportunity, definedas the principaldrivers ofprogress. The Opportunity sub-
theme addresses entrepreneurship for individuals and communities. The
Mobility subtheme concerns connectioninterms ofinfrastructure andlogistics.
The Sustainability subtheme relates to environmental impact and solutions.

From Consumers to Creators: Advancing Entrepreneurship in the UAE discusses
mobility, opportunity and sustainability in the UAE through different lenses:
the mobility of skilled expatriates and unskilled migrants across class, ethnic
and geographical boundaries; the opportunity to build truly cosmopolitan
cultures and multicultural workplaces, neighborhoods and local-to-global
markets; and the global values and civil societies needed to build social
cohesion, agility and resilience for a thriving culture and sustainable economy.
This writing analyses research and seeks insight concerning:
 the drivers of a knowledge economy;
 the barriers and catalysts of entrepreneurship in the UAE;
 unique perspectives of mindset and motivation;
 the components of an entrepreneurial ecosystem;
 the characteristics of effective entrepreneurial education;
 issues of national identity, nation branding, personal and business
branding;
 models of global citizenship, civic participation and civil societies;
and
 distinctive competitive advantages in UAE culture and history
with hope that this work can contribute to improved economic and social
development for the UAE, other developing countries, individuals and all
stakeholders in entrepreneurial ecosystems.
~Oksana Tashakova
Founder of Wealth Dynamics Unlimited

Introduction
The United Arab Emirates (UAE) is considered a role model among the Gulf
nations in terms of its economic diversification efforts. Dubai, in particular, is
viewed as a champion of progressive change in the region: a city on the fast
trackin terms of building brand awareness, international tourism and its ability
to attract multinational corporations.
With extraordinary vision, national leaders have formulated impressive goals
for the UAE. They toil to institute policy and institutional changes that will
power the engine of growth.
But, just as any racecar driver’s success also depends upon the quality and
cohesion of its pit crew; continued progress towards becoming a knowledge
economy also depends upon the participation, engagement and commitment

of every UAE resident. Indeed, every resident must become a driver of change.
Human capital is the ultimate resource in a knowledge economy.
A strong local economy is the key to a strong global economy and so the push
to increase entrepreneurial spirit in the nation is of vital importance. In order
for the UAE to truly become a global player; it must build an entrepreneurial
culture. Specialized entrepreneurial education plays a vital role in the
entrepreneurial ecosystem by catalyzing change from the bottom up,
educating and empowering individuals, and igniting cultural shifts in mindset
and motivation.
Specializedentrepreneurialeducationprovides skill-specifictraining still lacking
in educational institutions and many work environments: skills such as
creativity and problem-solving, opportunistic and global outlook, emotional
and cultural intelligence, and communication and leadership. It provides
opportunities for networking and mentorship, bridging private and public
sector populations. It offers success strategiesinterms ofbusiness models and
plans, marketability and innovation, and branding and marketing design.
But perhaps the most valuable contribution entrepreneurial education makes
to the UAE’s progress is in inspiring civic participation, individual engagement
and the beginning of knowledge-sharing bridges between its diverse cultures.
It helps individuals tie their personal aspirations to that of the nation. It helps
dispelfears of the unknown, fear of others and confusion about the roles each
resident must play in building a new, unique and powerful cultural identity.
Agility is what is required to survive and thrive in the face of globalization:
initiative, flexibility, the ability to take quick and opportunistic action. Agility is
the ability to respond, rather than react, to change.
Agility cannot exist without resilience: the ability of the country as a whole to
withstandmany sudden shifts and shocks (positive or negative). Resilience is a
kind ofelasticity that allows the country to adapt, reboundandprogess as agile
actions are taken.

Social cohesion is what gives cultures resilience: the bonds formed by shared
values, vision and purpose of UAE residents.
It is human capital—the development ofeach individual in the UAE—and social
capital—the development of cooperation, trust and prosocial engagement
among all residents—that will take the country forward.
The UAE is unique among developing and developed nations in terms of its
cultural and economic history, its blending of the traditional and modern, and
its pioneering spirit. It is poised to redefine entrepreneurial drivers and
entrepreneurialculture,the stages ofeconomic growth and the formation of a
knowledge economy, all of these too long biased and based upon western
models. The UAE is history-in-the-makinginterms ofreinventingwhat it means
to be a successful player in the global economy and a country composed of
truly collaborative and global citizens. Wealth Dynamics Unlimited is proud to
play a role in the entrepreneurial ecosystem of the UAE by igniting individual
initiative, building cultural bridges and fostering a new nationalism among its
residents.

The UAE is committed to building a knowledge economy. Multiple research
initiatives and constantly evolving changes in infrastructure, institutions and
policy reflect this dedication. Accordingto the WorldEconomicForum; the UAE
now ranks 12th
among 144 countries in terms of global competitiveness and
leads the MENA region.1
This is an impressive feat for sucha young nation and a
testament to the visionary leadership of the royal family.
But ranking on indices of competitiveness, entrepreneurship and innovation
can be misleading. Much research and many models are based on historical
data from Western and developed countries. Every country—developing and
developed—and every researcher is struggling to determine just what will
constitute a sustainable economy in the face of globalization.

Phases of Economic Development
The World Economic Forum ranks countries on the Global Competitiveness
Index according to 12 pillars that correspond to 3 phases of economic
development: 2
Pillars Phases
1) Institutions
2) Infrastructure
3) MacroeconomicEnvironment
4) Health and PrimaryEducation
5) Higher Education and Training
6) Goods Market Efficiency
7) LabourMarket Efficiency
8) Financial Market Development
9) Technological Readiness
10)Market Size
11) Business Sophistication
12)Innovation
1) Factor-Driven Economies
2) Efficiency-DrivenEconomies
3) Innovation-DrivenEconomies

A factor-driven economy is one based on unskilled labor and natural resources
and it is characterized by low productivity and wages. Competitiveness is
dependent on the pricing of basic commodities and products and is aided by
the first 4 pillars: well-developed private and public institutions, infrastructure,
macroeconomic environment and a healthy workforce with basic education. 3
An efficiency-driven economy is one with increased productivity and wages and
more efficient production and product quality. Increasing competitiveness is
driven by pillars 5-10: higher education and training, efficient goods, developed
labor markets and financial markets, utilization of technology and a large
domestic or foreign market. 4
An innovation-driven economy is what the UAE is driving for. It is characterized
by high wages, a high standard of living and businesses with new and unique
products and services. Pillars 11 and 12, the use of sophisticated business and
productionstrategies andthe creationofaltogether new processes,determine
competitiveness. 5
So how does the UAE fare in terms of these pillars? It is among the top five in
terms of infrastructure, efficient goods and macroeconomic environment but
needs to improve in terms of health and education, the population’s incentive
to learn, technology use and innovation. The UAE is considered to be in
transition from an efficiency-driven to an innovation-driven economy. 6

SME’s as Economic Drivers
UAE leaders understand that entrepreneurship, small and medium business
(SME) creationandthe development ofastronglocaleconomy are essentialto
becoming an innovation economy. As Omani entrepreneur Qais Al Khonji
points out: it is small businesses that will contribute most directly to the
diversification of the UAE economy. SMEs are the “lifeblood” of every
economy; they are the major source of jobs; and they are the “seedbeds” of
innovation. 7
SMEs have distinct advantages over large firms in that they are more agile and
responsive to bothlocal and global markets. They can quickly adapt, specialize
and respond to changing markets, customer desires and trends.
Across the UAE, Dubaihosts the largest number of SMEs (45%) with Abu Dhabi
coming in second (32%).

Contrary to what most people believe; it is businesses that employ less than
100 employees that will provide the most jobs for the increasing population of
Emirati youth. And it is entrepreneurial spirit, in the hearts and minds of every
UAE resident, business owner or employee, which will drive the nation’s
growth.
Vision 2021
“SMEs representmore than 90 per cent of Dubai businesses and they play
an essential role in building a competitive private sector. Furthermore,
SMEs contribute 40-46 per cent of nominal GDP in Dubai, and more than
60 per cent of the UAE’s GDP. SMEs host the majority of employment
opportunities in the country and provide 86 per cent of all private sector
employment.”
~Qais Al Khonji, Special to Gulf News

The National Agenda sets a number of Vision 2021 targets the UAE intends to
address in terms oftransitioningto an innovation economy.9
Among them are:
 To become amongthe top 10countries inthe GlobalCompetitiveness
Index by addressing areas suchas education, technology andmarket
development
 To rank number one in terms ofthe Ease of Doing Business Index by
addressing government procedures andpolicies concerninglicensing,
intellectualproperty,investor protectionandother start-up issues
 To increase SME contributionto non-oilGDP by 70%
 To number amongthe top 10countries interms ofthe Global
Entrepreneurship andDevelopment Index (GEDI) by increasing
entrepreneurialattitudes, entrepreneurialactivity andentrepreneurial
aspirations
 To become one ofthe top 20countries inthe GlobalInnovation Index
 To double the number ofhighly skilled knowledge workers inthe
labor force
 To double the number ofUAE nationals in the totalworkforce across
all sectors
 To increase Emiratiemployment inthe private sectorby 70%
 To increase the sense of security eachresident feels to 100%
 To increase family cohesion

 To preserve culturalvalues and increase socialcohesionbetween
populations
 To increase pride, sense ofbelonging, measure andexpressionof
national identity amongUAE nationals to 100%
 To number amongthe top 10countries interms ofhuman
development
 To become one ofthe top 5countries inthe Gallup Organization’s
WorldHappiness Index
The nation’s leaders have implemented a number of important measures to
implement these goals but just as corporations are slow to change as
comparedto SMEs; educationalinstitutions, governmentprocesses and overall
culture readiness for entrepreneurship requires private, local and individual
infusions and jumpstarts.

Social Capital
“Socialcapital refersto the institutions, relationshipsand normsthat shape
the quality and quantity of a society’s social interactions. Increasing
evidence shows that social cohesion is critical for societies to prosper
economically and for development to be sustainable. Social capital is not
just the sum of the institutions which underpin a society—it is the glue that
holds them together.”
~The World Bank

Social capital refers to the bonds between people in a society, but when this
capitalis defined too narrowly, applying only to specific groups within society,
socialcapitalcan hamper a society’s growth. As The World Bank explains, both
vertical and horizontal ties are needed: ties between individuals that give
people shared identity and common purpose, and “bridging” ties between
different ethnic, religious and socio-economic groups.11
Strong social capital depends upon government institutions, political policy,
corporatepractices andindividual representatives ofasociety comingtogether
and working together to foster prosperity and growth.
Among the barriers to social capital described by the World Bank are: 12
 Non-integrated ethnic diversity: A country’s productivity depends upon
both public and private resources. Practices that forward unequal
income distribution among ethnic groups will lower cooperation
between them and damage social capital.
 Reactions to globalization: Many fear the homogenizing effects of
globalization on culture: a kind of westernizing of cultural norms. It’s
important to realize that globalization is a two-way street and not just a
one-way force: globalizationexposes societies to different practices and
ways of thinking and eachculture has important contributionsto make in
this regard. But it is also true that in order for successful integration into
a global economy to occur; cultural norms and practices that are
considered unacceptable to other countries must evolve. The World
Bank uses the example of child labor policies as an example of this.
 Labor mobility: Redefining what constitutes a global citizen is required
for social capital to increase. Transnational knowledge workers can
contribute to the economy but if they are constantly moving to find
better opportunities; social capital is damaged. When people form
attachments to a country and come to share cultural customs, language
and values: social capital is increased.

The World Bank has launched the Social Capital Initiative, 10 projects working
to better define and measure social impact and its effects. In the meantime,
socialcapitalin the UAE can be estimated by The World Happiness Report and
the Legatum Prosperity Index.
The World Happiness Report
Of 158 countries evaluated in The World Happiness Report 2014-2015, the UAE
ranks 20th
. 13
This is a drop from 2013 when the UAE ranked 14th
. 14
The authors explainthat one of the reasons countries ofthe MENA region have
experienced losses in life satisfaction is due to changes in measurement:
former surveys inArab countries were based only on Arab respondents rather
than the entire resident population. Guest workers often describe much lower
life satisfaction than natives and efforts are being made to include them.15
“There is a common social theme that emerges consistently from the
World Happiness Report 2015. At both individual and national levels, all
measures of well-being, including emotions and life evaluations, are
strongly influenced by the quality of the surrounding social norms and
institutions. These include family and friendships at the individual level,
the presence of trust and empathy at the neighborhood and community
levels, and power and quality of the over-arching social norms that
determine the quality of life within and among nations and generations.
When these social factors are well-rooted and readily available,
communities and nations are more resilient, and even natural disasters
can add strength to the community as it comes together in response.”
~The World Happiness Report 2014-2015

Economic, political and natural crises also affect a country’s happiness index
but the authors report that countries with high social capital are better able to
weather these crises, andin some cases, naturaldisasters canhelp a country to
discover and build social capital. 16
The World Happiness Report authors describe the happiest countries as
those that have a “civil economy”: one based on shared social identity,
cooperation, trust and civic participation. 17
A more democratic society, one
that gives residents the opportunity to take part in society, (and not just
through the right to vote) increases happiness. This kind of “pro-sociality”
helps people to make decisions that better the common good instead of just
those that benefit themselves. 18
For instance, the US fails to rank among the top 10 countries for world
happiness because it tends to overly focus on GDP and fails to recognize the
value of a strong social fabric that could knit its members together. As an
individualistic capitalist society, the US suffers from a mentality that
overemphasizes individual and corporate greed and gain at the expense of
sustainable development. Rather than building upon its “melting pot” origins,
the US has become increasingly divided along ethnic and economic lines.
The World Happiness report stresses that it is not just market
competition and government oversight that create a civil economy, but
engaged and moral citizens and corporations.19
The authors state that:
“economic vitality crucially depends on the quality of interpersonal
relationships… [as these] are part of everyday economic interactions.” 20
Global economies require global citizens. A global citizen is not simply
someone that can move freely among different peoples or operate in
multicultural contexts. A global citizen is not simply one that puts the good of
the planet before their individual gain. Individuals begin to become global
citizens when they first feel rooted, supported and invested in bettering the
country they call home. While ethnic homogeneity is related to global
competitiveness and social cohesion; the reality of globalization is that

definitions of citizenry and identity must be redefined and expanded beyond
past paradigms.
Nordic and Scandinavian countries, high in homogeneity, rank well on
many indices in terms of global competitiveness and innovation, social capital
and world happiness, and talent and human capital use, but their economies
are increasingly threatened by xenophobia and poorly integrated immigrant
populations.
When a country narrows the definition of national identity to a specific
ethnicity, considers civic participation only in terms of the right to vote, or
limits freedoms and socialsupport to a segment of its population; it is reacting
rather than responding to the demands of globalization, damaging rather than
nurturing human and social capital, and devolving rather than progressing in
terms of building a successful and sustainable economy.
The 2014 Legatum Prosperity Index™
The Legatum Institute, a public prosperity thinktank, is working to
develop a better model of national success: linking economic values to well-
being measures.
Legatum asserts that social mobility andequal opportunity contribute to
prosperity through the effective utilization of human talents, and positive
impact on motivation, productivity and well-being. 21
The Institute identifies principles of prosperity as: 22
Entrepreneurship & Opportunity: Upwards intergenerational mobility that is
affectedby family and community structure.Freedomof choice and availability
of education, employment and health support affect entrepreneurship and
opportunity. The most prosperous countries offer opportunity “regardless of
family background and address both cash and class gaps.”

Education for Democracy and Prosperity: Educated people are equipped to
better bothindividual and national development but most ofall, are more likely
to become beneficial civic participants. The more involved in society residents
are; the more stable and sustainable a country becomes.
Health Matters: “The health of a country is an important determinant of its
prosperity.” Unhealthy populations affect a country’s productivity. Unhealthy
people are less likely to be successful in school or at work. But welfare
spending fears are often unjustified: some of the countries that spend the
most have worse outcomes than those that spend the least. Quality matters
more than quantity.
Safety and Security: Fear of crime affects prosperity and across the world,
womenfeelless safe than men. Nations that promote the economic and social
empowerment of women increase perceptions of safety and improve
prosperity.
Freedom: Economic, politicalandsocialfreedom greatly affects life satisfaction
and stimulates economic growth. Economic freedom is most strongly linked to
national prosperity; freedom of choice and tolerance rank second and third.
Values: Legatum recognizes that social capital contributes to prosperity. They
find that strong familial bonds, strong charitable intent and high levels of trust
are all necessary for social capital that is linked to prosperity. When these
values are shared amongindividuals and supportedby institutions and policies;
wealth is more likely.
How does the UAE rank on The 2014 Legatum Prosperity Index™? It
comes in 28th
out of 142 countries. Legatum uses 8 pillars to measure
prosperity: 23
Economic: measured by macroeconomic policies, economic satisfaction and
expectations, foundations for growth and financial sector efficiency. The UAE
ranks 10th
in this regard.

Entrepreneurshipandopportunity: measured by entrepreneurial environment,
promotion of innovation and evenness of opportunity. The UAE ranks 31st
on
this pillar.
Governance: measuredby effective and accountable government, fair elections
and political participation and rule of law. The UAE ranks 32nd
.
Education: measuredby access, quality and human capital. The UAE ranks 39th
.
Health: measured by basic health outcomes, infrastructure and preventive
care. The UAE ranks 37th
.
Safety andSecurity: measuredby nationalsecurity andperceptions of personal
safety. The UAE ranks 26th
.
Personal Freedom: measured by gurantees of individual freedom and choice
and social tolerance. The UAE comes in at 55.
Social Capital: measured by social cohesion and engagement and community
and family networks. The UAE is 43rd
.
These are the guidelines that the UAE needs to address in order to build a
prosperous nation.

The UAE Difference
Economic theories are just that: theories. They are basedonlooking at the past
and projectinginto the future. Theories,economicandentrepreneurialmodels,
countries andcultures are in a constant state ofevolutionbecause the future is
unknown.
The UAE does not fit neatly into prevalent theories of economic development
because of its unique history. Unlike many developed countries, the UAE did
not begin as an agrarian economy and did not experience an industrial
revolution. Its modern beginnings were not characterized by big business,
mass consumption and increasing utilization of technology. Its native
population did not acquire work skills associated with industrial and
technological expansion and its social structure hasn’t yet adapted to forward
collaboration and shared insights among private and public sector residents.
The UAE’s oil wealthand tribal society led to the development of a distributive
economy, one in which kinship and ethnicity determines the distribution of

wealth. The local market grew slowly and is dominated by family businesses.
Immigrant entrepreneurs experiencemany barriers to entry and Emiratis often
fear losing face by failing or feel that they don’t have the necessary skills to
start and manage a business.
Today, UAE leaders realize the importance of diversifying the economy and
igniting entrepreneurial spirit. They have fast-tracked changes to improve
institutions and infrastructure, education and funding, and are in the midst of
the region’s own industrial and technological revolutions.
Researchers are struggling to define better parameters for measuring
successful economies that include the well-being of individual residents and
the strength of their social fabric and culture.
“Future generations will be living in a world that is very different from
that to which we are accustomed. It is essential that we prepare
ourselves and our children for that new world.”
~Sheik Zayed bin Sultan Al Nahyan

Accordingto the World Economic Forum, the top barriers to competitiveness
for the Gulf region are labor regulations, an inadequately educated workforce,
red tape, access to finance and workplace ethics.24
Entrepreneurial obstacles in the UAE are related to its cultural and economic
history and its accelerated development. These obstacles include faulty
networks, talent challenges and issues of mindset and motivation.
Multiple studies report that key barriers to entrepreneurship include:
 Risk-aversion or fear of failure
 Lack of skills and self-efficacy
 Failure to see opportunities
 Lack of initiative or drive for achievement

 Lack of customer-centric perspectives
 Lack of innovation and originality
 Faulty networks and lack of role models and mentors
 Lack of market research and strategic planning
 Lack of growth-oriented business models
Faulty Networks
Entrepreneurial networks offer more than advice, more than useful
connections and more than partnering possibilities: they help individuals to
build an entrepreneurial identity and mindset. Networks help individuals to
feel like entrepreneurs, believe they can become successful entrepreneurs,
and gives them insights that they could never gain any other way.

Wasta, the prevailingform of networkingandinfluence in the UAE, relies on
favoritism and exclusivity. It is often related to pedigree and disconnected
from merit.
A 2015 World Bank report, Jobs or Privileges: Unleashing the Employment
Potential of the Middle East and North Africa, illustrates just how damaging
practices like wasta can be for entrepreneurship. They stifle competition,
innovation, growth of the private sector and the creation of jobs.25
Specifically, the researchers found that the policies associated with wasta-
like practices 26
:
 Limit free entry in the domestic market
 Exclude certain firms from government programs
“For entrepreneurs, networking can play an important role in
supporting them on their entrepreneurial journey. Networks can
provide entrepreneurs with the opportunity to interact with like-
minded people, gain access to information from a wide variety of
sources, to test outtheir existing ideas, to get referred to appropriate
expertise, to gain moral support, and potential market expansion.
Trust for Emiratis seems to be built on long-term relationships, which
could be an important factor in the underutilisation of market and
professional networks by Emirati entrepreneurs. The absence of
accrediting bodies encourages heavy reliance on close social ties, in
particular with family members, and a lack of complimentary
knowledge about the market, international opportunities and
changing regulations.”
~Entrepreneurship: An Emirati Perspective

 Increase the regulatory burden and uncertainty for firms without
connections
 Insulate certain firms and sectors from foreign competition
 Create incentives that discourage domestic firms from competing in
international markets
Other studies have also found that the tendency of Emiratis to rely on family
and friends for advice can damage their entrepreneurial motivation and
marketability.
(From: “Entrepreneurship: An Emirati Perspective” 27)
“Emirati entrepreneurs seek advice mostoften fromfamily (76.7%) and friends
(82.8%) in their personal networks—although only 15.4% receive advice from
their spouse. Professional advisory networks such as Bankers (10%) and
lawyers (10%) were among the least consulted.”
(From: “The Role of Advice Sources for Entrepreneurship and
Innovation” 28)
“Our results show that across the MENA region entrepreneurs rely most on
advice from private sources such as family and friends…
~private advice is negatively correlated with ‘new to customer’ innovation…
~private advice is negatively correlated with any type of innovation during all
entrepreneurial phases [from future start-up to established venture]…
~We found that advice from international sources plays a bigger role for ‘new
to customer’ innovations during the exploitation phase, whereas for ‘new to
market’ products and services this is the case during the exploration phase…
~International advice is a form of distant search and represents a mean for
entrepreneurs to reach beyond their present contexts when searching for
knowledge…”

(From: “Factors Influencing Entrepreneurial Value Creation in the
UAE—An Exploratory Study” 29)
~A major conclusion is the lack of institutional support for
entrepreneurship, related to training, mentoring and information
availability, which hinders the ability of the entrepreneurs in the UAE to
successfully navigate their venture creation process…
~Role models have been found to be influential in individual and group
development and accordingly are an important aspect to be studied in
specific relevance to entrepreneurship. Majority of the UAE entrepreneurs
did not have a role model and those who had, for them their role model
were their family members and other entrepreneurs from the UAE. This is
expected as entrepreneurship being a recent phenomenon in UAE, there
would be lack of sufficient role models that could be emulated…
~However, the greater dependence on family may act as a barrier for the
entrepreneur to access new ideas and external resources, which may be
necessary for the entrepreneur to make their venture succeed.
(From: “Maximizing Emirati Talent” 30)
Emiratis mostly conduct job searches by relying on family, friends and key
contacts (52%) and often wait to be approached (50%). Just36% apply for jobs
online and 31% attend career fairs.
Employers, on the other hand, focus recruitment mostly on career fairs (52%)
and approach potential recruits directly (44%) of the time. Employers value
online applications (24%) and rely on recommendations from influential
people least (8%).
“The method most preferred by young Emiratis (personalrecommendations) is
the least used by employers and the top method used by employers
(recruitment fairs) is the least used by young Emiratis.”

The Talent Challenge
The UAE workforce needs 21st
century skills to succeed in its transition to a
knowledge economy. An innovation economy depends not only upon “hard”
skills like reading and writing comprehension, mathematical, scientific and
technologicalability, and business focus in terms of accounting, marketing and
business models: it requires “soft” skills such as these entrepreneurial drivers:
 Initiative
 Perseverance
 Creative Problem-Solving
 Self-confidence
 Planning
 Influence & Persuasion
 PersonalResponsibility
 CommunicationSkills
 Cultural Intelligence

Both hard and soft skills are lacking among Emirati nationals. Highly-subsidized
natives have little motivation to acquire workforce skills; educational
institutions are gearedtowards rote memorizationand guaranteed work in the
public sector rather thanthe creative problem-solving and the entrepreneurial
mindset needed in the private sector; and inclusive and divisive population
policies subvert knowledge-sharing between highly-skilled expatriates and the
native population.
The Pearson-backed, global study, Effective Education for Employment project
has identified10 key workforce traits needed in the UAE 31
:
1) Self-Awareness
2) EmotionalIntelligence
3) Ability to Do the Job
4) Ability to Communicate
5) Management skills
6) Commitment
7) PersonalAccountability
8) Willingness to Take
Ownership
9) Discipline in Terms ofDelivery
10)The Ability to Learn
“Today’s learners are going to experience a variety of jobs and careers in
their lifetime, many of which don’t even exist today. One way we can help
them to thrive in the workforce of the future is to give them adaptable,
useable skills that can be transferred across professions and industries.
We cannot possibly give our current generation of learners all the
knowledge and information they will need for life after they have
completed their formal educations. However, what we can do is to
prepare learners how to learn, how to apply information and how to
adapt.”
~Frank Edwards, Workforce Development Director at Pearson

Agility is of the utmost importance in terms of learning and performance:
learning how to learn and learning throughout one’s lifetime.
Wamda Research Lab released a report on obstacles to funding for MENA
Startups in 2014. Based on investor views, potential entrepreneurs in the
region: 32
 Lack strategic planningand decision-makingskills (56%)
 Lack financial literacy skills (44%)
 Lack business development skills (33%)
 Lack ability to deal withinvestors (22%)
Thirty-one percent of investors believe MENA entrepreneurs need to choose
better business models and write better business plans and 30% think MENA
entrepreneurs need to improve their ability to pitch their ideas effectively and
gain better understanding of what investors are looking for.
MENA entrepreneurs cite difficulty in finding talent that addresses skill gaps in
their team and investors that do not offer value and support beyond supplying
cash.
Another Wamda study, The Next Step: Breaking Barriers to Scale for MENA
Entrepreneurs, addresses the growth potential of businesses 33
. The UAE does
not need to promote just the startup of businesses, but the launch of
successful and thriving businesses.
Wamda Chairman Fadi Ghandour reports that: “63% of entrepreneurs and 60%
of experts consider finding talent to build teams as a major challenge. Access
to new markets is yet another central issue: 47% of entrepreneurs and 50% of
experts cited difficulty in finding partners to facilitate expansion as an
impediment to scale. Moreover, 41% of entrepreneurs said that the biggest
restraint to generating revenues is marketing products and services.” 34
Entrepreneurial skills have a great impact on whether people will start a
business, their ability to manage and market a business, and whether they
choose a truly innovative and growth-oriented business model.

Self-Efficacy
When an individual considers opening a business, he or she first takes stock of
their abilities and knowledge. The Global Entrepreneurship Monitor (GEM) has
reported that people who feel that they have appropriate skills are four to six
times more likely to start a business.35
Entrepreneurship: An Emirati Perspective found that only half of Emiratis
(51.6%) feel that they possess the skills necessary to start their own business,
comparedto 70.1% ofArab expatriates, 58.6% of Asian expatriates and 65.7% of
Western expatriates. 36
Management
Starting a business is just one hurdle: running it another. A 2011 study, Factors
Influencing Entrepreneurial Value Creation in the UAE, found that most UAE
entrepreneurs hadn’t received any formal training before starting their
businesses and reported that resources for training and education were
limited. 37
UAE entrepreneurs reported being hampered by their lack of
knowledge and skills in “labour law, customer service and client relationship,
negotiation skills, dealing with bureaucracy, cash flow management and
networking.”38
Marketing
Successful businesses are those that are innovative and growth-oriented.
Marketing know-how helps people to understand the market environment:
their competitors, their customers and the originality of their product or
service.
Entrepreneurship: An Emirati Perspective found that: 39
 Three in five of Emirati-ownedbusinesses soldproducts or services
that their competitorsalso selland over 90% recognize that most
of their competitorsoffer the same product or service, signifyinga
tendency to “copy rather thaninvent.”

 More than two inthree Emiratibusiness owners believe that their
customers do not consider their productor services innovative.
 Less than 1 in 4 new Emirati entrepreneurs expect to use new
technology.
 The 2011 GEM Report foundthat the majority ofUAE new
businesses had no-or-low technology adoption.
 More than half of establishedEmiratientrepreneursare not
workingonexpanding their market.
 Only 4% ofEmiratiSMEs tap into the internationalmarket.

Emirati Youth, Entrepreneurship and
Emiratization
The UAE is greatly concerned with the job outlook for Emirati youth. A
combination of trends and policies have contributed to the growing “youth
bulge” in the nation, one that threatens social stability. Shrinking availability
and relevance of jobs in the public sector, lack of role models in the private
sector, barriers to women entering the workforce and efforts to increase
Emirati birth rates are just a few of the forces that pose threats to UAE’s
future.
In terms of education, as Dr. Mona Mourshed, leader of Global Education
Practice at global management firm McKinsey & Company has said:

“youth and their families do not get enough information to make decisions on
what professions they should go after.” 40
Executive director of the National Institute for Vocational Education Dr. Naji Al
Madhi has said that “the school certificate is overvalued in the UAE” while
vocational and technical training is neglected.41
Apprenticeship models are what work so well for Nordic and Scandinavian
economies, those that have rated so highly in terms of competitiveness and
innovation: education based on hands-on-learning or learning-by-doing. Such
education cannot come from educational institutions on their own, but from
the input of private sector catalysts and industry information. Non-relevant
curricula and teachers lacking entrepreneurial insight are unlikely to give
Emirati youth the employability skills they need.
As Afshan Ahmed, reporter for The National discovered, work ethics and
teamwork are just some of the soft skills not taught in the UAE’s education
system, along with hard skills like technical and scientific focus.42
The nation’s focus on attracting large multinational companies and reliance on
transient expatriate workers could backfire in terms of building a qualified and
prevalent Emirati workforce in the future. Large companies tend to hire
already-skilled workers and small companies usually lack the funds to provide
proper job training.43
Emirati youth also shares troubling characteristics with Generation Y in terms
of future leadership gaps. As Meghna Pant reported in a 2013 Gulf Business
article: lack of experience, life skills and a kind of impact-impatience affect the
leadership potential of Emirati youth.44
Emiratis are prone to frequent job changes, seeking out increasingly higher
status and pay, and this is a characteristic they share withGenY workers across
the globe.

According to the Ashridge Business School study, Culture Shock! Generation Y
andtheir Managers aroundtheWorld, many managers feel that because of this
job-hopping tendency, this generation: 45
 is not gaining deep work experience and essential skills such as
emotional intelligence, communication and people skills
 has little sense of loyalty in terms of staying with (and learning from) an
organization that doesn’t seem to immediately align with their personal
ideals or desire for challenging, interesting and varied work
 is over-confident, too self-focused and lacking in respect for experience
The study found that young professionals in the Middle East tended to lack
proper motivation, havingunjustifiedexpectations ofpromotionand increased
responsibility. Close to athirdof Middle East managers reportedthat managing
the expectations ofrecent graduates is an “overridingconcern.” YoungEmirati
grads want to be recognized for making changes rather than learning or
adapting to organizationalhierarchies and the reality of how things work. They
have different priorities than previous generations. But effective change
depends upon the integration of the old and the new.
That’s why William Scott-JacksonofOxfordStrategic Consultingwarns that the
UAE’s Emiratization policy should utilize different methods.46
Quotas are
ineffective because they force private sector businesses to hire and retain
unqualified Emiratis, breeding resentment in company culture, decreasing
productivity for businesses and promoting laxity in terms of providing
developmental training. Firms in the private sector mostly seek out qualified
expatriate workers and endure the slowing of productivity that Emiratization
policies place upon them. Gaps between ready skills and further development
make private-sector education a cost-intensive endeavor.

Emiratizationpolicies now don’t address the fact that 76% of native high school
students haven’t beeninvolved in any kind of workactivity and they do not tap
into an important motivational drive for Emirati youth.47
Contrary to
commonly-held beliefs: young Emiratis are not as motivated by ease of living
and financial success as supposed: they want to help their county to succeed,
serve society and make their families proud by their contribution.48
The energy giant BP has vested interest in helping the UAE develop Emirati
talent in the private sector. They helped fund the Oxford Strategic Consulting
study: Maximising Emirati Talent.49
This report noted the need to increase
Emirati employability in the private sector and illustrated the fact that
Emiratization initiatives have so far been ineffective, with less than 1% of the
constitution of the private sector consisting of Emiratis in 2014 .50
“I believe that every Emirati should be encouraged and helped to achieve
his or her maximum potential to make them attractive to employers as a
valuable asset, rather than forcing employers to take on a quota which
may be seen as an unwanted burden. One of the best ways to help young
Emiratis to achieve their maximum potential is for employers to work
closely with colleges and schools and teach young people about the world
of work and how to find the job of their dreams. Young people are hungry
for this knowledge—and it must be given to them at an early age…Quotas
might seem like a good idea but in reality they make employers focus on
just filling targets for the sake of it, rather than building long-term
solutions to Emiratization and a dedicated and highly-skilled Emirati
workforce that is valuable to the organization.”
~ Professor William Scott-Jackson

Notable findings of the report include: 51
 “64% of Emiratis must become leaders if all of the senior leadership
positions in the country were to be filled by nationals”
 “Promoting local leaders does not mean ‘replacing expats’. Talent creates
employment and, as the UAE has demonstrated; high levels of ex-pat and
national talent can create high growth, which will result in a high demand
for national talent.”
 “Many young people believe that oil andgas engineering isdirty, hard work
and dangerous. They believe that a government desk job is the ‘best
career’. There is little factual basis for these beliefs, but employers and
educators are failing to give different messages in ways young Emiratis can
relate to. Employers believe that young nationals are mainly motivated by
money anda ‘big’ job title, while in fact, self-development and contributing
to national success are deemed just as important by young Emiratis
themselves.”
 “Government jobs are ‘too’ attractive for Emiratis, while the quota
instrument is too blunt. Further, the private sector does not do enough to
explain to young nationals why they should not automatically seek
employment in the public sector: widely perceived as valuable to the
country, less demanding and more secure.”
 “Companies tend to work in isolation to address an industry-wide problem.
Companies, academic institutions and government are not working closely
enough together, a major contributor to the above two factors.”
 “The IMF [International Monetary Fund] and other international
institutions employ an established measure of ‘human capital’. This
measure indicates whether or not more investment in human capital
including training, subsidies and business incubators will produce economic

benefit. UAE has a considerably greater prospect to enhance the levels of
human capital per worker than, for example, the USA. This means that
investment in human capital will continue to produce improvements in
output for worker (andhence GDP) for a considerable time to come. And of
course this is only the ‘hard’ economic benefit. Investment in human capital
delivers many ‘soft’ benefits such as self-respect, confidence, transferability
of skills (which helps to build a flexible and resilient economy), feelings of
self-value and consequent social stability (productive workers tend to feel
more content).
Maximising Emirati Talent identifies major disconnects between the hopes of
Emiratization practices and Emiratization realities.
Rather than viewingthe bulk of its resident population, expatriate residents, as
a temporary, expendable and ever-renewing asset; it would behoove the UAE
to look upon its expatriate population as a valuable, essential and increasingly
competitiveresourcefor their bridgingcapabilities to successful Emiratization,
and to treat them accordingly.
All nations now face the same conundrums in building global economies.
The rapid pace ofUAE’s development, the fast-trackinginitiatives employed by
national leaders, the search for sure-fire determinants of thrivability and
sustainability…no matter its differences from other countries, developing or
developed, historical and religious and cultural differences included, the UAE is
not alone in determining what it takes to become a successful knowledge
economy, an innovation economy, and a global player in the world’s future. It
may, in fact, possess many cultural advantages as compared to its
entrepreneurial predecessors.
Determining what national identity means, dealing with immigration policies
and migrant workers, and building bridges to a truly global knowledge
economy is of immediate and necessary concern.

Any country that devalues its immigrant population and views workers as an
incessantly-self-renewing resource fails to give expats and the creation and
management of private sector businesses their accordant and proper value,
and fails to build upon and inspire true knowledge-sharing, global insight and
individual investment in building a global economy.
The country that fails to nurture global citizens, with roots and identification
and investment incentives within the country they call home, no matter
ethnicity or class or voting rights, beyond outdated definitions of citizenship,
will fail at global citizenship and a thriving global economy, too.
The UAE is eminently equippedwith the resources needed to become a global
player, and, may be more likely than developed nations to determine what it
takes to shift to a global economy.
As a youngnation incurring rapid change, the UAE faces unique problems with
social cohesion, those not represented in so-far top-performing nations and
those issues that may not be as cementedas those in developed nations. In so,
the UAE has great opportunity to work as a model and revolutionary example
of what a thriving global economy could mean.

Expatriate Talent
The UAE considers itself a “talent magnet”, one of the top destinations for
skilled expatriates from top-performing nations. But much of the labor flow
into the UAE is that ofunskilled migrant workers. UAE’s skilled workers mostly
come from developing rather than developed countries, and attracting
workers isn’t the only issue—growing and retaining talent is what contributes
to a sustainable global economy.
The professional online network LinkedIn has been working to create
databases and reports ontalent and recruitment. One of these is The Economic
Graph whichincludes relocation data among the top 20 migratory countries. 52
According to LinkedIn, the UAE was the top destination spot for talented
professionals in 2013. The study also noted that architecture and engineering
work dominated these moves.
LinkedIn admits, however, that the study is “seen through the lens of LinkedIn
data. As such, it is influenced by how members chose to use the site, which can
vary based on professional, social, and regional culture, as well as overall site

availability and accessibility. These variances were not accounted for in the
analysis.” 53
Their analysis is also limited in terms of nationality, members that moved
between November 2012-2013, and then-English-only availability. 54
It is notoriously difficult to find sound population and labor statistics for the
Gulf region. As the authors of the 2014 LSE Middle East Centre analysis,
Addressing the Demographic Imbalance in the GCC States, report: 55
“Three factors make the statistics on demography in the GCC unreliable:
 A lack of public accountability or collaboration within and among the
various national and regional institutions or government ministries
collecting information
 A culture of secrecy surrounding the actual figures collected through
mechanisms such as census returns or internal surveys conducted within
public agencies
 A shortfall in reliable data on ‘legacy migrants’ such as hajj over-stayers in
Saudi Arabia, illegal migration along largely-uncontrolled borders in Oman,
and those who simply never registered as migrants after national
boundaries were fixed in the 1960s and 1970s.”
A Gallup brief, Potential MigrationandtheGCC, sheds some light on the matter
by looking at the intention of people that do want to relocate. 56
Gallup found
that 46% of workers that wish to move to the UAE are from Asia; 33% are from
the MENA region; 18% are from Sub-Saharan Africa; 2% call Europe home; and
less than 1% hail from the Americas.

Of those workers that would like to relocate to the UAE: just 15% refer to
themselves as “professional workers”; 41% have only an elementary school
education; 36% have secondary or some tertiary education; and only 6% have a
college education. Highly educated workers prefer top-performing countries
with liberal naturalization policies like Australia, Canada and Switzerland.
Middle East migrant labor expert Victoria Heath has also compiled some
statistics. She reports that 87% ofthe UAE populationis foreign; the majority of
foreign workers work in the private sector; and low-skilled workers make up
65% of the UAE foreign worker population. 57
Employee experts Bristol Global report that 58% of the UAE population is
comprised of individuals from India, ranging from the uneducated to skilled
“In the past, policymakers in the GCC have worked to strike a balance.
That is, how to continue to fulfill national expectations of having
employment opportunities available when they need them while meeting
their economies’ needs for highly educated, highly skilled expatriate
workers. As they strive to strike this important balance, leaders must
ensure that meritocracy—and not national identity—is the most
important qualification employers take into account when making an
employment decision. If not, many highly-skilled workers will seek more
merit-based environments, businesses, and economies in which to invest
their skills and talents.”
~Potential Migration and the GCC

business workers to highly educated entrepreneurs; 20% are from other Asian
countries; and only 9% are of Western origin, mostly the UK. 58
Labor population statistics are so important because they inform perceptions
and policy concerning the entrepreneurial ecosystem in the UAE. Expatriate
and Emirati employee populations affect the UAE’s productivity, the private-
public sector divide, national identity fears, entrepreneurial sources and
knowledge-sharing.
Productivity
According to a 2014 International Association-International Gulf Organization
(iaIGO) policy review, labor regulation in the GCC region “has not only reduced
institutional effectiveness, but also undermined its market stability.” 59
This outcome is created by a myriad of factors but suffice to say here, the
dominance of the UAE’s domestic workforce, one that is about maintenance
rather than growthor innovation, and one comprisedof unskilled workers that
send most of their wages out of the country rather than putting it back into
UAE’s economy, does not impact productivity favorably.
The large and growing domestic and unskilled worker population in the UAE is
not representative of a developing knowledge economy. It is factor-driven
economies that are characterized by unskilled labor. Efficiency economies are
characterized by developed labor markets. An innovation economy is one that
is comprised of highly skilled, highly paid workers and a highly productive
economy.
Private-Public Sector Divide
Accurate statistics are also required to help bridge the private-public sector
divide. The domination of the private sector by foreign workers increases the

perception that the private sector is for expats. This is true in terms of both
skilled and unskilled positions.
According to the 2014 report, Diversity and Wage Inequality in the UAE Labor
Market: 60
 The percentage of nationals in the private sector may be as low as 1.3%
and 90% of UAE firms have no Emirati employees whatsoever.
 The uneducated make up 55% of the private sector, the unskilled 77.2%.
 Elite expatriates, those that hailfrom OECD countries, only constitute, on
average, 9.7% of businesses in the private sector.
Forwardingthe misperceptionthat the UAE economy is beingleapfrogged into
the future by a large population of elite expatriates from the most developed
nations can backfire in several ways:
 it could deter such migration in that the skilled UAE workforce is
perceived as more competitive and so less desirable to essential
knowledge workers from these countries;
 it could decrease investor interest because of lack of authenticity and
transparency;
 it devalues the contributions and impact of knowledge workers from
developing regions;
 it increases the perception that UAE’s economy is being run by “hired
hands” from other countries and so Emiratis are either unnecessary or
undesirable in the private sector;

 and it belies the reality that Emiratis experience in that overall: the
private sector is mostly composedof cheap, uneducated, transient labor
that has no relevance to the lives, employment opportunities or
employment aims of national residents.
National Identity Fears
The realities of expatriate labor are also important to publicly address in that
national identity fears threaten economic progress and social cohesion in the
UAE. The vast number of foreign workers used to jumpstart UAE’s economic
diversification, their continued necessity and increasing numbers, has been
increasing social divides rather than building the social cohesion and truly
cosmopolitan culture required to build an entrepreneurial mindset and
knowledge economy in the UAE.
The problem is not that the UAE is a nation of incredible diversity or that
Emiratipopulationnumbers are so outweighed by these other nationalities. In
part, the fear comes from the fact that Emiratis, because of the UAE paradigm
of ethnic privilege and non-merit-based employment, are threatened by their
economic insignificance when it comes to their nation’s future.
 For instance, while OECD expats make up only 21% of the employees in
UAE firms, they make up the bulk of professionals and managers in the
nation and are recompensed accordingly, having the highest income
levels in the UAE. 61
 Emiratis are the second-most highly paid employees in the UAE even
though 75% of them are considered only “semi-skilled.” 62
 Other MENA-regionArabs make up the secondmost executive-prevalent
population in the UAE but rank only third in terms of wages. 63

 East Asian workers are often educated and skilled but rarely become
managers or executives and come in 4th
on the UAE’s wage pyramid. 64
Emiratis consider themselves managers and policy-makers and have long been
encouragedto take guaranteedpositions in the public sector eventhoughtheir
experience, exposure and insight concerning business dynamics are severely
limited. It is the “hired hands”, in reality, that keeps the private sector
functioning.
Althoughpast policies have beenabout creatingmore guaranteedgovernment
positions for Emiratis (and often creating more layers of bureaucracy,
inefficiency, and irrelevancy); these jobs are runningout and damage the UAE’s
progress towards a truly innovative economy. Worse yet, these policies are
provingineffective in terms ofEmiratirelevance: outside ofthe defense sector,
Emiratis hold less than 10% of government positions. 65

Emiratis need help to understand the realities of their nation’s labor
populations andjust how strategic and impactful working in the private sector
is.
Entrepreneurial Sources
Accurate statistics are also important for potential entrepreneurs to target
local markets and give UAE SMEs international appeal. The sponsorship system
in the UAE creates much confusion in terms of whether new businesses are
truly created and run by Emiratis or not. And the UAE’s immigration policies
make it very difficult for foreign residents to start businesses or feel that they
are worth their effort.
Foreign workers are a vast and overlooked entrepreneurial resource in the
UAE.
“The UAE nationals are a rare, protected minority group in the private
sector, in spite of the government’s efforts to nationalize the workforce.
Few of them work as unskilled laborers or professionals; most (75%) are
semi-skilled; some (11 per cent) are managers. Hiring a UAE national is
costly for firms but not as costly as hiring a Western expatriate. The
opposite is true when public sector workers are included in wage analysis
in Dubai…, which explains why so many few nationals are willing to work
in the private sector.”
~Diversity and Wage Inequality in the UAE Labor Market

In the highly entrepreneurial US, for instance, immigrants have created some
of its most iconic and innovative companies. (Think Apple, AT & T, Comcast,
Dupont, eBay, Google, Goldman-Sachs, IBM, Nordstrom, Pfizer and Procter &
Gamble.) According the Kaufmann Foundation, an education and
entrepreneurial advancement agency, “more than 40 percent of the Fortune
500 companies in 2010 were founded by an immigrant or the child of an
immigrant.” 66
The foundation reports that immigrants in the US: 67
 are almost twice as likely to start a business as those borninthe
US
 made up 27.1 percent ofall new entrepreneurs in2012
 founded one quarter ofthe engineeringand technology
companies launchedbetween2006and 2012
The Foundation also reports that: 68
 these engineeringand technology firms employed560,000
people in 2012 and generated$63 billion in sales
 Half of the venture-backedcompanies inthe US in 2011 had at
least one foreign-bornfounder andthese firms createdan
average of 150 new jobs per company
New York Times Economix contributor Catherine Rampell provides some
more immigrant entrepreneur insights: 69
 Immigrant-ownedcompanies exportmoregoods andservices than
US companies foundedby native-bornAmericans (7.1% versus4.4%)

 One-thirdof engineeringand technology companies inthe US were
launched by Indian-bornimmigrants and Chinese immigrants were the
secondmost commonsource ofhigh-techentrepreneurs
 The majority ofhigh-techimmigrant entrepreneurs originally came to
the US for educationpurposes—not to take ajob or start a business
 Immigrants were namedinover three out of four patents filed among
America’s top 10researchuniversities
Historically, the middle class generates the most entrepreneurs. The
“disappearing middle class” is what is threatening top-performing nations
today and building a middle class in the UAE will greatly contribute to
entrepreneurship.
Easing the ability of foreign workers to gain education and professional skills,
and inspiring them to invest in their country of residence rather than their
countries of origin, is one way to build the middle class in the UAE.
Another way to build up a vital and thriving middle class is to encourage
Emiratis to join the private sector as contributing skilled professionals—not
only as top leaders or business founders. A knowledge economy cannot exist
with only top executives and unskilled workers. Intrapreneurship is just as
important as entrepreneurship for the UAE’s entrepreneurial culture.
Apprenticeship-like programs could also help increase Emirati employment in
this vital talent class and build bridges between the expat and Emirati
populations.

There are also diplomatic andeconomic reasons to tap into foreignpopulations
in terms of jumpstarting the local economy in the UAE. Labor reform that
aligns with concerns over human rights can contribute to acceptance of the
UAE as a player among global economies and increase investor interest.
Knowledge-Sharing and Nationality
Arguably the most powerful barrier to the development of talent in the UAE,
the development of an entrepreneurial culture in the UAE, and the
development of a knowledge economy in the UAE is how non-transparent
statistics and present labor policies affect the transfer and sharing of
knowledge between skilled expatriates and Emiratis.
Knowledge really is power and the UAE’s employment perspectives and
policies concerning its foreign and native populations create uncomfortable
power dynamics that severely limit knowledge dissemination.
Wasta, the preferred and preeminent source of networking and knowledge-
sharing in the UAE, is also a source of status and influence highly valued and
deeply guarded among Emiratis. This is true even though international insights
and the transfer of knowledge from skilled expatriates to inclusive Emiratis is
required to build a global economy.
“Building a thriving middle class is the core of any prosperous, resilient
society, and failure to provide the growing ranks of low- and middle-
income citizens with a sense of mobility and aspiration could lead to social
instability.” 70
~Lubna Olayan, CEO Olayan Financing Company

The kind of apprenticeship required to build a skilled Emirati workforce, and
the bridge-building resource that expats have to offer Emiratis, are severely
curtailed by privilege of pedigree and employment policy.
Wasta creates information silos in both private and public sectors; devalues
and limits the contributions skilled expatriates have long made to the
development of the UAE and can make to the increase of Emirati knowledge,
and creates great conflict interms ofbuilding botha skilled professionalmiddle
class and a class of truly-informed global leaders among Emirati in the UAE.
For instance, Asians have long been the predominant workforce and dominant
population in the UAE but the UAE tends to devalue and downplay the
contributions ofsome ofits most highly-skilled and influential Asian employees
in both the private and public sectors, and thinks, generally, of most Asians as
an unskilled, perpetually-renewing and disposable domestic workforce.
This is true even though East Asian expatriates make up much of the
professional class (those from China, Japan, Korea and Taiwan); domestic
workers most often originate from Southeast Asian countries like the
Phillipines, Thailand and Vietnam; and highly-educated residents from India
make incredible contributions in both the private and public sectors of the
UAE.
While Asianregional divisions are a complex matter, complicatedby matters of
religion, culture and other indices; the UAE is itself considered an Asian
country, along with central Asian countries like the former Soviet republics.
Yet, UAE labor policies reflect a mindset that considers Asians a mostly
unskilled, ever-renewable, and disposable resource. Their prevalence in the
UAE is consideredathreat rather than a boon, andtheir population dominance
looked upon as a concern when it comes to national identity and economic
significance in the nation.

Arabians from other countries, even though they are often highly-skilled and
share UAE’s language and values, can find it difficult to build businesses or tap
into the connections neededto help build the local economy in the UAE. While
the UAE has been building upon a shared Arab identity in branding itself to
other countries; Emiratis consider themselves distinct from other Arabians.
Western expatriates, even though westernization of values is of eminent
concern when it comes to national identity, are more likely to be included in
wasta networks than any other population.
Two studies in 2014 looked into knowledge sharing in the UAE.
Arab KnowledgeReport 2014: YouthandLocalisationofKnowledge United Arab
Emirates emphasizes that the expat populations are an important resource for
the transfer of knowledge to the Emirati youth population. 71
In order for the UAE to build a strong local economy, Emiratis must gain
cognitive skills such as problem-solving, technological ability, and the ability to
search and process information through both Arabic and familiarity with
foreign languages. Knowledge transfer requires social skills, as well, and this
study found that Emirati youth display a degree of social and cultural
ineffectiveness: Emiratiinclusiveness creates ayouthpopulationthat is not very
open to the world or to learning from people of other nationalities and
cultures.72
The report stressed that the UAE community must learn to recognize the
importance ofintercommunication, partnershipsandopenness withexpatriate
workers while understanding that such “openness does not mean the loss or
suppression of identity.” 73
In fact, the UAE’s diverse populations are a bridge,
“connecting the youth with the cultural and scientific riches of the world.” 74
But how can the UAE increase openness to others and knowledge-sharing
between Emiratis and expatriate populations? How can expats be viewed as

resources rather thanas threats to national identity? The keys lay in interactive
environments, shared values and status based on meritocracy.
Arab KnowledgeSharing in a Multicultural Workforce: A Dual Case Study in the
UAE has found that “Arab national culture has a counterproductive effect on
knowledge sharing with foreign coworkers, due to heavy cultural emphasis on
trust, ‘wasta’, status, power and strong social networks and informal
communications, all of which are difficult to achieve with external temporary
workers.” 75
The study authors report that both Emiratis and expatriates tend to act with
‘self-preservation’ in the workplace. 76
As knowledge is a power currency and
status-promoter, Emiratis are not inclined to share knowledge with workers
they view as having less status and power than themselves, and whose
presence is viewedas a threat to national identity. Expatriates, already holding
lower rankin the workplace due to their lower pay rates, temporary contracts
and lack of wasta, are not inclined to share the skills and knowledge that make
up the bulk of their employability value and job security in the UAE.
Nationality plays an enormous role inknowledge sharingpractices. Emiratis are
most likely to share information with other Emiratis and more likely to share
knowledge withWesternworkers thanany other expat population: 35% Emirati
workers reportedbeing“very likely” to share informationwithWesternexpats
and 43.6% reported being “somewhat likely” to do so. 77
Because Westerners
receive better workcontracts andhold many senior positions; they are viewed
as having more power and status than other groups and Emiratis are more
likely to interact with them. 78

In contrast, 28.2% of Emiratis reported being “very unlikely” to share
knowledge with Arab expatriates and under half were only “somewhat likely”
to, even though shared culture and language made it easier to communicate
and interact with them. 79
Again, this was due to lower status and influence
perceptions in terms of pay and wasta. Over half of Emiratis reported being
unlikely to share knowledge with Asian coworkers. 80
Emiratization policies andunbalancedexpatriate workcontractstendto create
hostile working environments and lack of knowledge transfer. Changes in
government policies and organizational practices could greatly impact
knowledge sharing and the creation of a knowledge economy. Employment
basedon merit, not nationality, can shift perceptions of status and influence in
both Emiratis and expatriates, and make knowledge sharing apprenticeships,
mentoring and collaboration more likely.
Changes in length of employment contracts are also likely to impact knowledge
sharing positively. Such changes could make expats feel more invested and
valued in the organizations they work for and in UAE goals; lead to changes in
collective education, training and collaboration among organizations; and
decrease cultural ignorance, animosities and fear.
“Socialnetworksare weak because the organization isused to just having
a high turnover of foreign workers, so it doesn’t invest in improving social
ties and interaction between workers via proper policies.”
~Interviewee, Arab Knowledge Sharing in a Multicultural Workforce: A
Dual Case Study in the UAE

Strong social networks are built on trust, interaction and long term
relationships. Arab Knowledge Sharing in a Multicultural Workforce found that
temporary work contracts and unbalanced pay, a lack of communal areas to
increase social interaction between populations, and a lack of teambuilding
and social networking activities in UAE organizations negatively impacts
knowledge sharing. 81
One hundred percent of respondents in the study did not believe that the
organizations they worked for had done enough to create social interaction
among coworkers; 40% considered collective learning low; half considered
collaboration standard or mediocre and half reported it as low; and online
communication methods for knowledge-sharing were lacking. 82
This last finding offers some insight on how to improve knowledge sharing.
Many Emiratis use face-to-face informal conversation when sharing
information, likely due to sharing a common language. The study authors
suggest that the institution of corporate blogging could encourage openness
and social relationships across cultures because it is informal and errors in
grammar and language are not considered of major importance. 83
Increasing social interaction between UAE populations is vital to building a
knowledge economy. It is not only important for Emiratis to learn about other
cultures; but for expatriate populations to learn about Emirati national culture.
Historical research on ethnocentricity and racism has found again and again
that divisiveness and inclusion breed fear and ignorance. Increasing cultural
interaction will lessen national identity fears and forward shared values,
practices andmotivations amongbothEmiratis andforeignpopulations. Wasta
might be expanded to become a kind of kinship that includes expatriates
whom honor Arab and Islamic values and practices and whom are invested in
helping the country they live in to succeed.

In order for the UAE to grow and retaintalent, not only attract it; cross-cultural
investment, interaction and knowledge-sharing is vital.
Mindset and Motivation
“As a lot of us are young we are really into blogging, and just like
Facebook, the organization should create an internal social network, and
allow workers to blog and I think the organization would be able to get a
lot of work related knowledge that perhaps they wouldn’t get in a official
departmental meeting.”
“Technology isa good icebreaker, and may help to dissipate a lot of hang-
ups and reservationsthat UAE workersmay have, owing to lack of trust. It
may be easier for them to share knowledge online than in person.”
~Interviewees, Arab Knowledge Sharing in a Multicultural Workforce: A
Dual Case Study in the UAE

Determining what drives entrepreneurship in individuals has been the focus of
countless studies. Financial gain, personal advancement, freedom, work-life
balance and independence are often quoted motivational drivers. But again,
much research has focused on developed countries with very different
cultures, and different economic, political and social systems, than the UAE.
For instance, Entrepreneurship: An Emirati Perspective referenced Global
Entrepreneurship Monitor (GEM) motivation categories: opportunity-driven
entrepreneurship and necessity-driven entrepreneurship.
Many factor- and efficiency-driven economies are characterized by necessity-
driven entrepreneurship:people start businesses becausethey must inorder to
survive due to lack of employment and other such factors. Innovation
economies, onthe other hand, are thought to be characterizedby opportunity-
driven entrepreneurship: people launch enterprises because they see an
unfulfilled need in the market or recognize some other opportunity.

A long-standing belief has been that opportunity-driven businesses are more
successful, create more jobs and have a higher survival rate than necessity-
driven enterprises. 84
Because Emiratis enjoy extensive welfare subsidies and often-guaranteed
employment, their decision to start a business is thought to be opportunity-
driven. Entrepreneurship: An Emirati Perspective reports that 82% of Emirati
entrepreneurs start businesses in order to seize an opportunity. 85
The study authors asked opportunity-driven Emirati entrepreneurs what their
most important specific motivationwas: independenceor freedom(wantingto
be their ownboss, for instance—an intrinsic or internal driver) or increasing or
maintaining personal income (extrinsic or external drivers). Two out of three
Emiratis (66.3%) in 2011 started businesses in order to increase their personal
income. 86
While independence is the second most prevalent reason Emiratis
started businesses (20.6%); this motivator has fallen over the years. 87
Entrepreneurship: An Emirati Perspective points to seven drivers of an
entrepreneurialculture:perceivedopportunities, perceivedcapabilities, fear of
failure, entrepreneurial intentions, entrepreneurship as a good career choice,
status of entrepreneurs and media attention of entrepreneurs.
They found that in 2011, nine out of 10 Emiratis thought there was good media
coverage of entrepreneurship; 4 in 5 Emiratis thought entrepreneurship was a
good career choice; many Emiratis believed entrepreneurs have high status;
and 60.6% of Emiratis saw good business opportunities…
but,
only 1 in 20 were actively involvedin startup efforts; only 8.4% intended to start
a business; only about one-third knew an entrepreneur; only 50% felt they had
the skills and knowledge to start a business; and 1 in 3 reported that fear of
failure is a barrier to entrepreneurship. 88
Again, the UAE is unique in that it is a developing country endowed with
citizens with capacity for opportunity-driven rather than necessity-driven

entrepreneurship. Yet necessity is often the mother of invention and
opportunity-drivenentrepreneurship greatly depends upon timing or “striking
while the iron is hot.” The perception that entrepreneurship is not necessary
for individuals to aspire to in the UAE, because of government jobs and native
subsidies, is a misperception and barrier to growth. As public sector jobs are
running out, it becomes increasingly necessary for Emiratis to jumpstart the
local economy.Their incomes, the incomes of their children, and the economy
of their country depends upon this. This is the perspective that Emiratis must
adopt and embrace.
The Enterprise Research Centre (ERC), a UK consultancy that studies SME
drivers, doesn’t believe that necessity and opportunity entrepreneurship are
useful distinctions any longer. 89
ERC points out that necessity-driven entrepreneurship is often linked to lower
entrepreneurial skills but this link is complicated by the fact that necessity
entrepreneurs often arise during periods of recession, inflation and high
unemployment. Individuals that start businesses in these environments may
have business skills and experience.
In addition, necessity and opportunity may be mixed, as in the case of female
entrepreneurs in the UAE. Female Emiratis may not endure the economic
hardship that disadvantaged women entrepreneurs do, but barriers to their
career advancement may make them more likely to view entrepreneurship as
both an opportunity and necessity in achieving their ambitions. 90
In the same
vein, taking over the reins of the family business could fall into the realm of
necessity rather than opportunity entrepreneurship.
Both skills and motivation change over time, too, ERC points out. 91
No matter
their reasons for starting a business or their skill set at the outset;
entrepreneurs learn by doing and this can affect their motivation in terms of
self-efficacy and engagement.
Another way researchers have studiedentrepreneurialmotivations is to try and
categorize entrepreneurs into different types.

 Necessity-driven entrepreneurs, for instance, are often referred to as
“survival” or “reluctant” entrepreneurs: those that start businesses
because they have no other choice.
 Lifestyle entrepreneurs are those that start businesses in order to have
the work-life balance they want or become members of a certain
community, either financial or reputational.
 Social entrepreneurs use business to better society in some way.
 Profit-driven entrepreneurs want mostly to become wealthy.
 Serial entrepreneurs are thought to be motivated by challenge and
achievement more than wealth.
 Gazelles are entrepreneurs that are highly innovative, high-growth-
oriented and make an impressive impact in the economy.
There are severalother types ofentrepreneur categories but the problem with
them all is that drivers and motivations don’t neatly fit within them. For
example, one study ERCreviewedlookedat types of motivation and growth of
small businesses and reported that reluctant entrepreneurs, convenience (or
lifestyle) entrepreneurs and social entrepreneurs all experienced no or slow
growth; reputation-motivated entrepreneurs experienced moderate growth;
and profit-driven, achievement-oriented and learning-driven entrepreneurs all
experienced high growth. 92
But lifestyle entrepreneurs, those that want independence and freedom, may
also be social entrepreneurs or profit-driven entrepreneurs, too. A gazelle
might be motivated by reputation; a serial entrepreneur might be a social
entrepreneur; and social entrepreneurs are increasingly difficult to separate
from gazelles.
Another study ERCrevieweddescribedGrameenBankand Microsoft as “highly
innovative ventures [that] have created significant economic and social value”
but that have different drivers: Muhammed Yunnus being socially motivated
and Bill Gates being financially motivated. 93
The problem with this research is
that Bill Gates often describes his initial impetus as wanting to put a personal
computerinevery home, to make this wondrous device accessible to the every

man. Another is that social entrepreneurs are increasingly associated with
wealth and not simply motivated by a kind of self deprivation for the greater
good. The rise of “conscious capitalism” is one example of this: recognition
that a growing and wealthy enterprise has more economic and social impact
than the models many nonprofits and social entrepreneurs have used
previously.
Employee Engagement
ERC considers these 7 the most important motivation dimensions to consider
for entrepreneurship: 94
 “Achievement, challenge & learning: This dimension captures a desire for
personal development through entrepreneurship. It includes aspects such as
having meaningful work and responsibility and to learn through the challenge of
creating/running a business. It also includes aspects of self-realization including
fulfilling one’s personal vision.”
 “Independence & autonomy: This dimension highlights the entrepreneurial
motivation to be able to control one’s work life including control over one’s own
time and work, making independent decisions, having flexibility to combine work
with one’s personal life.”
 “Income security & financial success: This dimension captures the importance
of financial returns from entrepreneurship.”
 “Recognition & status: This dimension captures aspects related to social status
such as the desire to receive recognition and respect from friends, family and the
wider community for one’s work as an entrepreneur.”

 “Family & roles: This dimension captures the desire to continue a family
tradition as well as follow the example of other role models. In some studies this
dimension also emphasizes creating a family legacy.”
 “Dissatisfaction: This dimension describes entrepreneurial motivation out of
dissatisfaction with prior work arrangement. It, therefore, bears some similarity
to necessity motivation, which is rarely explicitly included in this type of
motivational research.”
 “Community & social motivations: This dimension includes the desire to
contribute back to the community the entrepreneur lives in either through
philanthropy or the business itself. It also includes aspects such as looking after
one’s employees and being an environmentally friendly company.”
These drivers are very useful to consider in terms of catalyzing
entrepreneurship in the UAE as long as a few caveats are considered:
Autonomy and independence are often linked to individualist cultures, higher
initiative and higher rates of entrepreneurship. But in collectivist cultures like
the UAE, being independent and free may not be as highly valued as
connectivity; “lifestyle” entrepreneurs that want convenience or freedom to
make their own schedules (and little desire growth, more employees or
increasing work and responsibility) should be distinguished from growth-
oriented entrepreneurs as being the self-employed; and intrapreneurs,
employees that are highly innovative and motivated, may not desire the
responsibility of owning their own business but are a vital part of the
entrepreneurial ecosystem and skilled professional class that the UAE needs.
Engaged employees are animportant factor for the UAE to consider interms of
entrepreneurship, intrapreneurship, an entrepreneurial culture and measures
of life satisfaction and world happiness ratings.

Consumer to Creator: Advancing Entrepreneurship in the UAE

Consumer to Creator: Advancing Entrepreneurship in the UAE

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