Dubai’s tech pitch to the world

If Gupta does set up a base in Dubai, which he is “planning to do”, he will join the more than 3,400 active information technology (IT) companies that have Indians as founders or partners in the mainland, according to data from Dubai Department of Economy and Tourism. The number of Indian companies will be much higher if we include the hundreds in Jebel Ali Free Zone (Jafza), located in the Jebel Ali area at the far western end of Dubai.

Having offices in the emirate makes it easier for Indian startups to hire global talent, and it also makes it easier for the Dubai government to source good tech talent from India. High net-worth individuals (HNIs) and entrepreneurs from India are being lured to Dubai by tax reliefs, golden visas, world-class infrastructure, a better quality of life, speedy clearances, and business-friendly regulations.

The UAE issued 151,600 golden visas from 2019-2022, according to a 18 November article in ArabianBusiness. This visa, which allows its holders to stay and work in Dubai for 10 years, was introduced in 2019. Rajesh Sehgal, an angel investor and managing partner at Equanimity Investments, is one such golden visa holder. “Many of my friends have availed of the golden visa because the Dubai government has been very proactive in getting talent there,” says Sehgal. While the visa allows him to travel easily to Dubai, as of now, he remains in India.

India’s stringent regulations around cryptocurrencies have also prompted some Web3 techpreneurs such as Nischal Shetty, founder of local crypto exchange WazirX, to open offices in Dubai. Sehgal says that “some crypto entrepreneurs have moved there due to regulatory hurdles in India”, but he also points out that Dubai is “an expensive city to live in unless you’re working there full-time.” Sehgal, though, underscores that none of Equanitmity’s portfolio companies have a base in Dubai.

Lure of Dubai

Dubai was ranked the third most-preferred destination for foreign workers in a December 2021 survey by the Boston Consulting Group (BCG). London was ranked first, followed by Amsterdam. Foreigners, including Indians, are attracted to the emirate’s quality of life, its world-class roads and highways, luxurious malls, water parks, beaches, theme parks, desert safaris, tax-free salaries and business-friendly policies.

An ongoing digital transformation is only adding to its attractions as a tech hub.

Dubai, for instance, became the first government in the world to turn completely paperless last year. Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum had then told the media that the emirate had thus saved about $350 million and 14 million man hours across Dubai’s government departments.

International Business Machines Corp. (IBM) has developed a blockchain-based registry for Dubai, where free zones and mainland authorities can share information on registered companies and different aspects of their structure.

In March 2017, the government launched the emirate’s first cognitive AI Lab in partnership with IBM, aimed at developing a roadmap for AI in Dubai. It is also big on cost-effective and intelligent public transport. Ahmed Hashem Bahrozyan, CEO of Public Transport Agency, Roads and Transport Authority, points out that Dubai has had driverless metros since 2009.

“Their punctuality is second to none. And our metros are fully autonomous,” he says. Bahrozyan recalls that for “the first six months, we had a person simply standing in the driver’s cabin so that people would not feel concerned over not seeing any human in the engine room. This is important since technology has to gain the trust of the people”. The idea behind all these initiatives is to make the emirate’s infrastructure and governance smarter, more energy-efficient.

The Dubai government measures the success of these projects through certain metrics. The Social Happiness Index (SHI) measures happiness and public sentiment by using AI to analyse social media data (anonymous data from channels like Twitter, Facebook, Instagram, news outlets, and blogs). A similar dashboard analyses and visualizes data that shows how Dubai’s population is changing and moving.

Building ecosystems

Cities and nations can nurture dynamic tech hubs that will become vibrant centers of international business with the right mix of policies that … enhance their appeal to digital talent and leading tech companies,” noted an April 2022 BCG report. According to Vladislav Boutenko, managing director and senior partner at BCG Dubai, the reason for Dubai’s success is that it “has adopted a systemic approach to growth and digital transformation”, and “manages all its departments as ecosystems”.

He makes a valid point. “Each department has a certain degree of autonomy in governance and providing services, but we all collaborate with each other. We also want to ensure that any deployment is scientific—we first pilot, see the outcomes, and then we scale,” says Omar Sultan Al Olama, UAE minister of state for artificial intelligence, digital economy and remote work applications.

“Everything (in Dubai) has an expiry date—even our policies. So, every year, you will find some of our policies expire so that they remain relevant and up-to-date”, says Hamad Al Mansoori, director general, Digital Dubai. Mansoori insists that all services have to be continually “redesigned—be they government, private sector or free zone areas—to customize them for groups of people regardless of whether they are individuals or professionals and regardless of their income-levels”. As an example, since mobiles have smaller screens (as compared to desktops) that make it difficult to fill forms online, the government resized the input fields to suit mobile screens.

Educating government authorities about the benefits and drawbacks of technologies such as AI, in terms of job losses and algorithmic biases, is another focus area. “The biggest challenge in AI is ignorance in the decision-making process. We tackle this ignorance by offering government officials a chance to attend the Kellogg College’s AI training programme at the University of Oxford to read code, ethics, and actually graduate in the programme. Later, they pitch the AI applications they propose to implement to a panel of experts. One condition—all such applications must have an ethical use, else they have to go back to the drawing table,” Olama says.

In the case of crypto and blockchain, Dubai’s Virtual Assets Regulatory Authority (VARA)—the world’s first such central authority to regulate virtual assets—has safeguards to protect its citizens. As for Dubai’s public transportation strategy, safety is a critical element of driverless vehicles. Bahrozyan points outs that while Dubai plans to have “25% of our trips through autonomous mode by 2030, we have currently achieved 10-11%. After driverless metros, our next focus is taxis. We do not want to just be the first but also want to be the safest.”

Dubai wants to transform the emirate into one of the world’s top 10 metaverse economies as well as a global hub for the metaverse community. The aim is to attract more than 1,000 companies in the fields of blockchain and metaverse and support more than 40,000 virtual jobs by 2030.

This futuristic vision is being incubated at 13 ‘future councils’. The council on AI, for instance, focuses on governance and legislation. The energy council identifies opportunities to transform Dubai into a sustainable ecosystem powered by clean energy. The council on talent explores the skills required to excel in Industry 4.0, and the means to develop these skills. Dubai Future Research aids in proposing short- and long-term recommendations to its stakeholders based on local, regional, and global trends.

The Centre for the Fourth Industrial Revolution UAE (C4IR UAE), which is a collaboration between the Dubai Future Foundation and the World Economic Forum, focuses on blockchain, responsible AI use cases, and precision medicine in healthcare and government to co-develop consent and data privacy frameworks, and to protect patient data used in human genome sequencing programmes.

Lessons for India

Comparisons are odious between a city with about 3.5 million citizens and a country with a population of about 1.4 billion. India itself is well on its way to achieving its target of becoming a $1 trillion digital economy by 2025-26. It is already the world’s third-largest startup ecosystem, with nearly 10,000 tech and deeptech (AI, IoT, blockchain, Web3, biotech, metaverse, etc.) startups. India also has world-class institutes of technology (IITs, IIITs and NITs) that regularly collaborate with companies across the country. The government’s Aadhaar-enabled payments system and the Unified Payments Interface (UPI), too, have revolutionized the payments ecosystem. India also launched its National AI Mission in May 2020, aiming to be an AI power to reckon with. And while the Indian government may dislike cryptocurrencies, it is piloting a digital rupee, and supports blockchain (tech that powers cryptocurrencies).

However, India’s infrastructure, poor air quality, and low standards of living, are a dampener for global talent.

To be sure, India is building an ecosystem in Gujarat that may someday rival financial and tech hubs like Dubai, Mauritius and Singapore. Christened the Gujarat International Finance Tec-City (GIFT City), the 886 acres of land with 62 million sq. ft of land includes office spaces, residential apartments, schools, hospitals, hotels, clubs, retail, and recreational facilities. The Indian government has also offered a host of incentives including a 100% tax holiday for a decade to businesses that is set up within the hub’s International Financial Services Center (IFSC). But GIFT City is a work in progress.

Bengaluru, dubbed India’s Silicon Valley, is another success story with 40-50% of the tech experts there having “moved there from elsewhere in India”, according to an April 2022 BCG report.

Bengaluru started by attracting big domestic and international technology companies into “export zones” in the 1980s with tax incentives and low, government-subsidized rent for office space. It “sustained and expanded its position as India’s leading digital hub in part by investing in higher education, startup incubators, and other local development platforms to help innovators and entrepreneurs create new local tech companies. The city is now home to 48% of India’s R&D workforce,” the report explains. But Bengaluru’s potholed roads and disorderly traffic, too, remain sore points for expats.

“We do not have a Shenzen, Singapore, or Dubai in India. The global cosmopolitan hub is missing in India. Dubai attracts intellectual and business capital. India needs to focus more on the ease of doing business here to building better infrastructure, providing a global quality of life, and ensuring that people are safe and secure,” insists Jayanth Kolla, co-founder of deeptech research and advisory firm Convergence Catalyst.

Sehgal believes it’s “not about zero taxes but providing good infrastructure, and good execution of projects, which in most cases is done by Asians, even in Dubai”. He asks: “Everyone is saying this is the decade of India. Why would you leave India and go to Dubai if you had good infrastructure and ease of business here itself?”

The emirate’s digital transformation is luring talent from across the globe. What can India learn from it?