Investments in small and medium-sized enterprises (SMEs) will be a key topic of discussion at the Annual Investment Meeting (AIM) 2015, to be held from 30 March to 1 April at the Dubai International Convention and Exhibition Centre under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, Ruler of Dubai.
AIM 2015 will bring experts and officials from over 140 countries to discuss major topics related to Foreign Direct Investment (FDI), mainly in SME sector.
HE Sultan Bin Saeed Al Mansoori, UAE Minister of Economy that organizes AIM 2015, says SMEs are the cornerstone of any economy, given their huge contribution to the Gross Domestic Product (GDP) as well as employment generation. Hence, it is important to have extensive discussions on SMEs being an incubator for creativity and innovation.”
Speaking about SME scene in the UAE, Al Mansoori said: “SMEs have become a springboard for creativity and innovation, given their economic value addition. Many of the SMEs have grown rapidly attracting a variety of investments, as well as funds and governmental support through bodies like Khalifa Fund for Enterprise Development (KFED) and Mohammed bin Rashid Establishment for SME Development.”
Al Mansouri said that SMEs are essential for accelerating innovation. An SME is established based on an idea, or as implementation of a patent, and keeps developing to become a productive entity. He added: “We support these institutions by providing facilities. This year’s edition of AIM aims to discuss this subject threadbare, and recommend solutions that would be beneficial to the macro interests of the economies in the world.”
SMEs are facing many obstacles, particularly on the funding side, which calls for increased investment. Participants at AIM 2015 will highlight the significance of boosting investments in such institutions, and ways to address barriers to financing, development and investments.
Mr. Dawood Al Shezawi, CEO, AIM’s Organizing Committee, says: “The AIM agenda will include investments in general as well as FDI in SMEs and their integration with the overall financial system. It will also shed light on its financial obstacles and suggest solutions. We hope that AIM will come out with tangible results to strongly support this vital sector.”
The AIM program includes in-depth debates on patents and orientations of investments highlighting preferences of investors and host countries. It will highlight the views of governments, investors and owners of SMEs, with the goal of finding ideal solutions and ideas for developing this important sector.
SMEs have shorter establishment process for foreign investors, as they find ready entities for investments and promotion in large open markets.
“SMEs invest in areas that are not on the radar of bigger investors, and develop themselves to become pioneers with huge potential of further growth, especially if they find foreign markets to sell their products or services,” said Al Shezawi.
AIM 2015 will be held under the theme ‘Sustainable Development through FDI Induced Innovation and Technology Transfer’.
Some specialized reports reveal that SMEs play a key role in reducing unemployment, especially in some developing economies.
It should be noted that many of the SMEs have evolved and grown as a result of innovative ideas of its owners, especially young people. These startup companies are considered centers for innovation and creativity to support the economy, particularly as their activity is concerned with the needs of the community.
In addition to the challenges of financing, SMEs are facing obstacles related to selling in foreign markets, in light of competition from larger companies, or in light of obstacles preventing them from entering new markets.
Product development is also a challenge, since these facilities may lack the necessary mechanisms for developing its products, or they might lack expertise or market research, or lagging behind in technological advancement.
Lack of funding is one of the obstacles facing the SME sector, as they are unable to develop their products or expand business. Here is where the role of FDI comes in.