Almost 17% Of UAE SMEs Increase Staff In Last 12 Months

Around 17 per cent of small and medium enterprises (SMEs) polled in the UAE increased their staff members in the last 12 months whereas 12 per cent of them increased their employees’ wages, according to 2014 Global SME survey.

The study, released by insurance firm Zurich, polled 3,800 SMEs from 19 countries about their business experience. The survey also included 200 firms from the UAE.

Almost 26 per cent of the SMEs in the UAE were found to have expanded their domestic operations in the last 12 months while 18 per cent of small businesses were reported to have stepped up exports to overseas markets, higher than the global average of 15 per cent. The percentage was significantly higher compared to countries such as Germany (11 per cent), Italy (12 per cent) and the UK (13 per cent).

The survey also found that 20 per cent of the SMEs in the UAE diversified their product ranges and services over the last 12 months, compared to 18 per cent in the same period last year.

Only a significant minority of the UAE SMEs considered closing down their business or reducing their business offerings, the survey said.

“A healthy and successful SME sector is crucial in driving sustainable and inclusive growth in a country’s economy,” said Clint Draper, head of SME at Zurich Insurance Middle East.

“Zurich’s research demonstrates that the UAE’s economic and business environment is helping SMEs to thrive and grow their domestic operations. As the global economy continues to recover, we expect to see more opportunities for SMEs to export their products and services overseas.”

UAE has drafted a number of measures to support SMEs in a bid to reduce unemployment among nationals and to speed up economic diversification in the country.

In 2012, the Emirates approved a law that required all government bodies and government related entities to allocate five per cent of their budget for goods and services provided by SMEs.

Earlier this year, UAE’s minister of economy Sultan bin Saeed Al Mansouri said that the UAE was all set to enact a new law, which will require 10 per cent of future federal government contracts to be awarded to SMEs.

He also said that a UAE “development bank” would assign up to 10 per cent of its annual financing to small businesses, while SMEs would also receive other tax incentives from the government.