The UAE’s small and medium-sized enterprise (SME) sector continues to be a cornerstone of the nation’s economic diversification strategy, bolstered by government initiatives, technological advancements, and a resilient business environment.
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Government Initiatives and Support
The UAE government has prioritized the growth and progression of SMEs, aiming to increase the number of SMEs from 557,000 in 2022 to one million by 2030. Initiatives such as the “Make it in the Emirates” campaign and the Abu Dhabi Industrial Strategy are designed to attract industrialists, investors, and innovators to develop and manufacture products in the UAE.
In Abu Dhabi, the Department of Economic Development launched two initiatives to prepare SMEs for the emirate’s industrial strategy:
- Smart Manufacturing Competence Center: A catalyst for local and global industry stakeholders to establish an innovative and sustainable ecosystem.
- Smart Manufacturing Incentive Program: Assists SMEs in transforming toward smart manufacturing, implementing six transformational programs, including Industry 4.0 and Circular Economy.
Technological Advancements and Digital Transformation
Digital transformation remains central to SME strategies, with 83% of businesses prioritizing digital payment enhancements. A Mastercard study reveals that 92% of UAE SMEs now accept digital payments, marking an increase from previous years.
The adoption of no-code platforms and AI-based solutions is revolutionizing the SME landscape in the UAE, enabling businesses to innovate without extensive technical resources. These technologies offer significant cost savings and efficiency improvements, empowering SMEs to adapt and grow in a rapidly evolving business landscape.
Economic Outlook and Confidence
The UAE’s non-oil private sector maintained steady growth in April 2025, with the S&P Global UAE Purchasing Managers’ Index (PMI) remaining at 54.0. Employment rose at its fastest rate in 11 months, driven by efforts to reduce backlogs and support new business.
SMEs in the UAE report a 91% business confidence for 2025, reflecting a strong sales pipeline and resilient market conditions.
Strategic Implications
The UAE’s focus on enhancing the SME sector through financial support, technological innovation, and strategic initiatives aligns with its broader goals of economic diversification and resilience. These efforts position the UAE as a conducive environment for SME growth and entrepreneurship, contributing to sustainable economic development.
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