What is Making Dubai the Most Exciting Financial City of the World

Dubai is fast emerging as one of the leading centers for research and investment in new technologies like Artificial Intelligence (AI), Machine Learning (ML), cybersecurity, blockchain, data analytics and Internet of Things (IoT) etc. Part of the United Arab Emirates (UAE), the city’s unique geographical position, stable political system and focus on emerging technologies have strengthened its position as a global tech hub in the last few years.

Dubai has also become one of the world’s top Foreign Direct Investment (FDI) destinations. According to the annual ‘Dubai FDI Results & Rankings Highlights Report 2021′ published by Dubai Investment Development Agency (Dubai FDI), the city ranked first globally in attracting FDI projects in the financial services sector in 2021, surpassing financial cities like London, Singapore, New York and Paris. The data, based on the Financial Times’ FDi Markets’ report shows that the value of FDI capital flows in Dubai exceeded 26 billion AED (Emirati Dirham) with a growth rate of 5.5% compared to 2020.

From a fishing village of yore, Dubai has become the melting pot of global talent. Across the UAE, there has been a focus on digital transformation in the private as well as public sectors. With the large-scale adoption of AI, Dubai is rapidly moving onto the path of becoming a knowledge-based economy in sync with the UAE’s goal of becoming one of the most advanced AI nations by 2031.

As the Emirate continues to march ahead on its ambitious growth path, let’s take a look at some of the initiatives that are making the journey exciting.

Dubai FDI

Dubai FDI is an agency of the Department of Economic Development in Dubai. It provides essential information and support to foreign companies that intend to invest in Dubai’s thriving economy. The agency was set up to position Dubai on a global stage as a business opportunity for new initiatives and successful business. True to its mission, the agency has adopted well-defined strategies to address the needs of its partners.

In the first nine months of 2021, when the world was still recovering from Covid pandemic-induced slowdown, Dubai attracted $4.3 billion of FDI from 371 projects. Not just focusing on future-forward policies, continuous improvement in areas like ease of doing business and reforms like 100% ownership is also fueling the city’s growth further.

Supercharging growth with AI

UAE has taken a giant leap into the future with its focus on emerging technologies. AI has proven itself as a game-changer for businesses by improving productivity, lowering costs, and creating new jobs and growth opportunities. It is expected that by 2030, AI would become a $15.7 trillion sector globally. In tune with the growth potential of the sector, UAE has invested heavily in creating an ecosystem for companies that will help generate 35% of the nation’s GDP. With well-defined strategies, Dubai FDI is playing a pioneering role towards this goal by supporting businesses that want to invest in the Emirate.

Ai is expected to contribute over $320 billion by 2030 to the Middle East economy. UAE has positioned itself to become the region’s leader in AI. Dubai and Dubai International Financial Center (DIFC) are the global ambassadors for AI within the UAE.

The early steps to supercharge growth with AI were taken in 2017 with the launch of the UAE Artificial Intelligence Strategy. With this, UAE became the first country to have an AI strategy. It is also the first country to have an AI minister. The country aims to expand the use of AI across sectors like education, energy, transportation, space and technology.

With a strong commitment to digital transformation, UAE rapidly climbed the ladders in the global digital competitiveness index, rising from 18th to 10th position between 2017 and 2021. Nearly 14% of UAE’s economy, or about $100 billion, is expected to be generated due to the impact of large-scale AI adoption by 2030.

Dubai’s rise as the AI hotspot of the world is being ably supported by world-class infrastructure development, leadership commitment and support for international talent.

Coding License

The DIFC announced a ground-breaking AI and coding license in cooperation with the Ministry of AI in February 2022. The license aims to draw AI businesses and talent from across the globe, allowing companies to work within the DIFC Innovation Hub.

DIFC Innovation Hub

DIFC’s Innovation Hub has emerged as the driving force for entrepreneurs. Launched in May 2021, the Innovation Hub is an important part of Dubai’s vision for the future. It is home to several early-stage startups, unicorns, sovereign wealth funds and big tech institutions. The Innovation Hub brings these communities together with regular events like Blockchain Week, the AI Festival etc.

The Innovation Hub offers excellent market access to startups. It is also the home to the largest venture capitalists, family offices and institutional capital in the region.

Dubai Digital Authority

In 2021, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai, established the Dubai Digital Authority (DDA). This authority develops and oversees the implementation of policies and strategies related to Dubai’s information technology, data, digital transformation and cybersecurity.

AI Everywhere

Dubai has a thriving start-up ecosystem driven by AI technology. The administration has ambitious plans to use AI and other future technologies in virtually all sectors of the economy. For example, it has been planned to use 3D printing technology in 25% of Dubai’s buildings by 2030. The Emirates has already become home to the world’s largest 3D-printed building. The progressive government initiatives are also supporting future AI-based technologies to test concepts like the world’s first flying taxi, Volocopter, and high-speed vacuum train Hyperloop One.

In the last few years, AI and similarly advanced technologies have been implemented at various levels across sectors in the UAE. In retail, AI is being used for non-contact pickups and deliveries. AI is also behind the rise of cloud kitchens and smart household devices across the UAE. In 2018, the UAE’s aviation authority started exploring the use of AI in air traffic management in partnership with Searing Technologies. Some of the prominent uses of AI in aviation are facial recognition and smart gates at Dubai airport.

AI is being used for law and order through Dubai Police’s Oyoon project, which uses an AI network of smart cameras for surveillance. This has proved effective in maintaining law and order and catching offenders. The Dubai Police also signed a cooperation agreement with the Saudi Technology and Security Comprehensive Control Co. (Tahakom) in February this year to implement AI systems for traffic management and monitoring traffic violations.

The banking industry is benefiting from AI with the rising use of virtual assistants.

AI also played an important role in Covid management as robots and drones were used extensively for sanitizing the streets and dispensing hand sanitisers. The Dubai Health Authority is planning to use AI and robotics to automate surgeries and other procedures in the future.

Dubai Investment Fund (DIF) 

The push for the Emirate’s transformation into a top-notch knowledge economy has come not just from the administration but also companies like Dubai Investment Fund (DIF).

Over the years, DIF has grown into one of the biggest investment funds across the world. The Fund has been an important player in the ongoing AI revolution in Dubai. In 2016, when AI and ML had just started gaining traction, DIF set up the first AI lab in Dubai, attracting the best talents from across the globe. By the end of 2016, DIF was already testing a financial analysis machine learning solution developed in the lab.

In 2017, DIF further expanded its investment portfolio within the IT sector with new partnerships with leading tech companies and emerging startups. That year, DIF made large investments and took stakes in firms like Qualcomm, Intuit, PayPal, Booking.com, NetEase, VMware, Zoom, Uber and AutoDesk.

Future District Fund

Future District Fund (FDF) is the venture capital fund of funds of Dubai anchored by DIFC and Dubai Future Foundation (DFF). FDF has committed AED 1 billion seed to fund the future of finance startups. The fund supports future economy companies operating out of Dubai Future District.

The FDF aims to deploy half of its investments into venture capital funds with a local focus and the remaining half into startups directly or through Future District affiliated programs.

Museum of the Future

Dubai opened a one of its kind ‘Museum of the Future’ to the public in February 2022. It is a seven-storied, column-free museum and arguably one of the most beautiful structures in the world. It is the only museum that talks about future possibilities, serving as a laboratory and a space to develop the latest technologies in AI, big data analytics, virtual and augmented reality and human-machine interaction. The museum is inspired by the UAE Prime Minister’s vision of the future, who once said, “The future belongs to those who can imagine it, design it, and execute it. It isn’t something you await, but rather create.”

Store of the future

In January 2022, one of the largest retail groups in the region, Majid Al Futtaim launched the’ Store of the Future’ at Mall of the Emirates in Dubai. Launched in partnership with Cisco, the store offers an immersive and personalized experience to shoppers. Backed by AI and VR technologies, the smart and magic screens at the store suggest to shoppers what to choose and what suits them best.

Tax Reform

To attract startups, the UAE has replaced business fees with a tax. The first-ever tax on business profits will come into effect in the UAE after June 2023. In a statement early this year, the UAE’s Ministry of Finance said that profits will be taxed at a rate of 9%. However, there will be no tax on profits below 375,000 Emirati dirhams ($102,000). This will support small businesses and startups.

Dubai Future Accelerators

Dubai Future Accelerators (DFA) aims to co-create the future by facilitating the dynamic collaboration between startups, private entities and the government. It aims to position Dubai as an attractive destination for startups and entrepreneurs by providing a citywide testbed for innovative technologies of the future. The DFA offers entrepreneurs an opportunity to work directly with the public and private sectors. Through various challenges, it allows entrepreneurs to challenge the status quo and push the boundaries of what’s possible.

The Future Accelerators Program invites candidates from across the world to pitch their ideas. Selected ideas are incubated in Dubai.

Smart Dubai

Dubai is not just investing in AI but also trying to use it to improve governance. Smart Dubai initiative aims to leverage emerging technologies like AI and Blockchain to make everyday experiences more personalized, seamless and efficient for residents and visitors.

Smart Dubai is leading the Emirate’s AI roadmap. It has established a first-of-its-kind AI Lab in partnership with IBM to harness the power of AI and ML for government and city services. The lab is working with a growing network of partners from the Government and private sectors.

(Ambassador)

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