Dubai hires half a million more white-collar workers in four years

• Finance and insurance represent 10.7% of Dubai’s GDP
• Booming startup activity also adding to economic growth
• SVB collapse an opportunity for region’s banks to support them

Dubai is welcoming an increasing number of white-collar workers as the emirate evolves towards a knowledge-based economy, with an increased emphasis on the financial sector.

Between 2018 and 2022, the number of workers employed in the UAE business and finance sector grew by half a million.

At the same time, the number of construction workers declined by 300,000, according to Christian Kunz, chief strategy innovation and ventures officer, Dubai International Financial Centre.

“We’re seeing a shift towards the digital knowledge economy,” said Kunz at the inaugural annual general meeting of the Dubai Foundation Development Fund.

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Financial and insurance activities reached a value of AED32.8 billion ($8.93 billion) during the first nine months of 2022, growing by 1.2 percent compared to 2021.

The sector accounted for a 10.7 percent share of Dubai’s GDP and a 3 percent share (0.14 percentage points) of GDP growth during the nine months.

Mena startups raised $3.94 billion in 2022 across 795 deals, a rise of 24 percent in investment value and a 22 percent increase in deal volume compared to 2021, according to Wamda’s 2022 annual review report.

Financial technology (fintech) remains the crown jewel, attracting $1.1 billion in investment, nearly double 2021’s figure and almost a third of the total amount raised last year.

The report also showed that the region’s venture capital landscape was dominated by the UAE, Saudi Arabia and Egypt, with the UAE seeing 250 deals worth $1.85 billion.

Fadi Ghandour, chairman of Wamda and founder of Aramex, said friction still existed across the startup ecosystem and “better dialogue” was required between venture investors, government regulators and entrepreneurs in the emirate.

“To make sure that startups work, we need access to capital and access to markets and have a regulatory environment that enables these startups to actually hit the ground running with the minimal amount of friction. That hasn’t happened though.”

He added: “The central bank needs to sit with us at the table so that we are able to address their challenges, their worries, so that we can make our startups grow and grow fast.

“They’re raising money, but they are stuck on growth because there is that friction. That needs to be addressed.”

The global startup ecosystem has been rocked by the collapse of Silicon Valley Bank (SVB) earlier this month, the most high-profile banking failure since 2008.

SVB has long been the lender of choice for tech startups and venture capitalists around the world and thousands of founders and VCs from the UAE and wider Gulf region held accounts with the bank.

Mahmoud Adli, founding partner of Shurooq Partners, described the situation with SVB as “quite shocking” but insisted its demise presented an opportunity for local and regional banks to bring that venture capital back to the region.

He said: “It is not a small task but it’s doable and it will turbo charge the capital availability for our ecosystem. It will make our financial system a lot more sophisticated to push innovation especially for fintech and so forth.

“I see this as an opportunity, not only for us, but also for the regulators, for the banking sector to learn from what has happened and really push on the regional solutions.”

Sarah AlSaleh, investment partner, Outliers Venture Capital, said it presented a “massive opportunity” for entrepreneurs to grow “without having to rely on external ecosystems to support their ambitions.”