ADVISORY VIEW
The role of start-ups in economic recovery and growth Start-up businesses are vital to the continuation and growth of economies, especially following economic shocks. George Hojeige, Chief Executive Officer of Virtuzone explains just how much start-ups contribute to societies by employing, innovating and improving services for consumers
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s the world continues to recover from the impact of the pandemic, the potential for start-ups to stimulate and accelerate economic recovery takes centre stage. The global start-up economy was previously valued at nearly USD 3 trillion, which has been assessed by experts to be on par with the Gross Domestic Product of a G7 economy. While the pandemic has impeded this growth, market studies indicate that startups still performed strongly at the end of 2020, citing a 4% year-on-year increase in global venture funding, which reached USD 300 billion. According to Crunchbase, a leading platform for professionals looking to connect with innovative companies, this remarkable achievement was largely driven by the digital transformation of essential sectors, such as healthcare, education, finance, retail, entertainment and a majority of corporate work around the world. As these sectors moved their operations online, they created huge market opportunities for companies specialising in tech infrastructure and cloud services, which are some key components of a successful and sustainable digital transformation. Rise of online businesses in the UAE In the UAE, we have seen a similar
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trend emerge in 2020, as existing companies expedited their digital shift, more entrepreneurs explored business opportunities online and consumers increasingly turned to e-commerce to get the products and services they need. In fact, Dubai Customs has predicted that e-commerce sales in Dubai will rise by 23% and reach USD 27 billion (AED 100 billion) in 2022, as a result of the drastic shift in consumer trends and behaviour. In a separate study published by Dubai Economy and Visa, the UAE ranked as the most advanced e-commerce market in MENA, with an estimated annual growth of 23% between 2018 and 2022. With a burgeoning e-commerce sector, we are likely to see more entrepreneurs and start-ups aim to harness this massive opportunity. From health, fitness and nutrition consultants, to shopping and delivery services, more professionals and businesses will go digital. Supporting start-ups means supporting innovation and growth Ask any venture capital fund manager what is the first question they ask founders, and they will inevitably answer, “What is the problem you are solving?” Start-ups play a pivotal role in advancing technologies and fuelling innovation. As they uncover untapped markets and engineer innovative solutions, they are able to disrupt
Banking and Finance news in the MEA market
George Hojeige, Chief Executive Officer, Virtuzone
industries by introducing new and better ways to meet market demands, leading to economic and societal growth. Consequently, this creates new employment and business opportunities that help revitalise the economy. By enabling and empowering start-ups, the government is helping to advance innovative ways that resolve existing challenges more quickly and efficiently.
