Why Dubai is turning itself into a global tech hub
The name Dubai conjures up images of glitzy hotels, glamorous nightlife, towering feats of architecture and gigantic shopping malls all to a backdrop of the baking desert heat. However, the city is more than just the playground for the super-rich. Behind the impeccably designed skyscrapers and layers of neon, Dubai is at the forefront of the UAE's attempts to diversify the economy and reinvent itself as a global hub for tech and innovation.
The country is presently still heavily reliant on oil and gas revenues. In 2009, WTO figures found that 85% of the UAE’s economy was based on oil exports. This puts the UAE into the world’s top ten oil producers, however, the vast majority of that is in one emirate – Abu Dhabi.
Following massive finds in Abu Dhabi, oil was eventually discovered in Dubai’s territorial waters in the mid-1960s – only in much smaller quantities. Some estimates suggest that the city will run out of oil in no more than a decade or two.
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Necessity drives innovation and while its Emirati neighbours were busy drilling, Dubai had to play to its other strengths to shore up its economy.
In the days before oil, the city’s rulers leveraged its strategic geographical location on the Gulf, close to Iran and India, to make the city into a trading hub. Throughout the 1960s, Dubai was the centre of a thriving gold trade. When oil was finally discovered in 1966, the then Sheikh Rashid accelerated existing plans to develop the city’s infrastructure.
On 2 December 1971, the United Arab Emirates was officially formed with a uniform currency, the UAE dirham, coming two years later.
The city continued to grow during the 1970s due to a combination of oil revenue and trade, however as the black gold began to show early signs of running dry, the government turned its attention to building an economy that would outlast it.
Throughout the 1980s, Dubai became fully established as a trading hub and logistics centre, boasting the world’s largest man-made port, an upgraded airport and the Dubai World Trade Centre, at the time the largest building in the region.
By the time the 1990s rolled around, the stage for economic diversification had already been set to move away from oil and into other areas – luxury tourism and business travel being the key ones.
In 2013, the Dubai government launched its 2020 Tourism Strategy, which aimed for 20 million visitors a year by 2020. This has since been expanded to its present goal of 23-25 million visitors by 2025.
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The need to diversify was also made even more apparent during the financial crisis of 2008-2009. Real estate formed a major part of Dubai’s economy and still does to this day. However, in the wake of the crisis and the ensuing property crash, the city had to be bailed out with a $10 billion loan from Abu Dhabi.
The aid from the capital was not forgotten and the following year, at the unveiling of the world’s tallest building, it was announced that the 828-metre high Burj Dubai would henceforth be known as the Burj Khalifa, in honour of the UAE President and ruler of Abu Dhabi Sheikh Khalifa bin Zayed al Nahyan, as a gesture of appreciation for the economic lifeline.
The 2010s saw a period of relative stability for the city, despite its large debt to its wealthier neighbour. Tourism boomed and the city kept expanding into the glitzy neon tourist playground it is today. But as 2020 came around, bringing the Covid-19 pandemic with it, Dubai was hit hard as a result. With no more tourists arriving, stories of another possible bailout began circulating, though this seemingly never came to pass.
The tourism sector is starting to revitalise there but the pandemic made apparent the fragility of an economy heavily reliant on international travel. The city’s current ruler Sheikh Mohammed bin Rashid al-Maktoum and his government are keen to transform the city into a global tech hub.
Last week, in the run-up to the country's 50th birthday celebrations, the government announced a raft of new legislation which it says will help keep pace with the developmental achievements of the UAE and reflect the country’s future aspirations.
The package also includes several amendments to existing laws with the aim of developing the legislative structure in various sectors, including investment, trade and industry, as well as commercial companies, and regulation and protection of industrial property.
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There are also pieces of legislation that strengthen women's rights, gently relaxing drugs laws and sweeping changes to industrial property rights and copyright law - the latter being specifically aimed at drawing foreign tech investment directly, and the former softening the country's image internationally.
By making Dubai an attractive place for startups in the rapidly growing tech sector, the city hopes to establish itself anew. The focus on rights for women is not only attractive to a domestic audience but also to an international one, especially in the famously diverse tech world, which it is hoping to court.
Startups and global corporations alike are, in western countries at least, eager to prove their diversity and inclusivity credentials and if Dubai is to achieve its aims, then it will need to demonstrate this too.
While some issues have a long time to wait before they are even discussed, let alone reformed - LGBT+ rights being something of an elephant in the room here - the emirate is historically well-placed to be at the forefront of the UAE's economic diversification and digital transformation.
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