A central mission of Expo 2020 is the stimulation of innovation and entrepreneurship capable of driving economic diversification and sustainable development. The encouragement of small and medium-sized enterprises (SME) has consequently emerged as a natural evolution of the exposition’s tenets.
SMEs account for 94 per cent of all firms in the UAE and contribute to upwards of 53 per cent of GDP and 52 per cent of all employment. Dubai aims to use the expo to market the UAE’s business-friendly qualities to a global audience, supported by recent reforms to visa and ownership legislation, as well as corporate fees, aimed at further improving the business environment.
This is being achieved through the diversion of spending to dozens of SMEs that are official Expo 2020 licensees and through financial benefits provided to SMEs registered with the event’s online marketplace (OMP), a custom-built, end-to-end procurement system.
These benefits include a guaranteed 50 per cent payment upfront when procuring goods, or 25 per cent when contracting services; the acceptance of bank cheques instead of deposits; and a commitment to clear payments in 30 days instead of the industry standard of 90 days. Expo 2020’s banking partner Emirates NBD is also offering OMP-registered SME accounts with preferential loan and transaction rates, working capital support and low minimum requirements.
The OMP also includes a growing database of almost 40,000 suppliers that is available free of charge to help SMEs scale up more quickly – in place of commercial e-procurement tools that can cost thousands of dollars. So far, about 85 per cent of the firms that have signed up to the OMP are SMEs.
By the end of July, Expo 2020 had awarded 55.4 per cent of all direct and indirect contracts, equal to AED2.4bn ($650m), and was on track to deliver 20 per cent of its total spend to SMEs.
One example is DGrade, which has been selected as an official licensee. This will help divert millions of plastic bottles from landfill or the ocean, with the company set to open a recycling plant in Dubai South in the fourth quarter of this year. The plant will shred plastic bottles and spin them into yarn for producing expo-branded clothing.
|[caption id="attachment_348694" align="alignleft" width="780"] DGrade has been selected as an official Expo 2020 licensee[/caption]|
Similarly, another licensee, The Camel Soap Factory, will showcase its locally produced, hand-crafted soap, which is made in a zero-waste facility in Silicon Oasis that uses only as much electricity as an average residential villa in Dubai.
It is scalable solutions such as these, which present the economic benefits that the expo aims to celebrate.
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.