The UAE is primed for a new wave of small and medium-sized enterprises (SMEs) development led by innovation and technology, according to a new report titled ‘Charting the Future of SMEs in the UAE’.

The report was launched on the sidelines of the SME Beyond Borders 2017 conference held under the theme ‘SME4X’ in Dubai, UAE.

The report was published by Orient Planet Research in partnership with SME Advisor Middle East and Utalenta.com.

The Arab Gulf nation has one of the most robust SMEs in the region, which has sprung from strong trading and retail markets. Amidst a rapidly changing economic landscape, the sector faces the need to address future directions to sustain growth.

The report examines domestic strengths which can be built on to support SMEs and explore the impact of the ongoing digital revolution and its attractiveness to the present young generation.

It also noted that while financing is a key factor, SMEs also face the need to continuously innovate and adapt to changing markets particularly in an era where technology has become a prime factor in defining the direction of the global economy.

Nidal Abou Zaki, managing director, Orient Planet Group, said: “The UAE’s SME sector is in a particular juncture where it needs to address the new challenges and opportunities of the digital age.”

“We find it important to understand SMEs’ needs beyond the financial aspects of the business, which is often cited as the most common concern, to be able to contribute to economic growth. While financing is essential, SMEs and business developers need to look at a multitude of factors, including acknowledging the main composition of businesses since the country began diversifying from oil as its main source of revenue,” he said.

“The need to transition to a post-oil era in the GCC impels SMEs to capitalise on new growth markets such as digital technology, innovation and the knowledge-based economy,” he added.

Digital technology is fundamentally changing the way people live and the UAE is at the forefront in implementing the latest trends in the industry – from drones to artificial intelligence, the Internet of Things, mobile applications, and virtual reality, among others. Further, the report highlighted that the country’s young tech-savvy population spells a huge opportunity for SMEs to create a new entrepreneurial landscape attuned to the country’s ambition to become a global leader in innovation, which is central to the achievement of a knowledge-based economy.

This is supported by other studies which present UAE Millennials as among the most active in the region in terms of business development, with 91 per cent either already having started their own business or looking to start one in the nearest future.

Zaki added: “There is a strong drive among young professionals to become independent and run their own business.”