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When Citizens Are Minority: Toward Establishing A Comprehensive Emirati SME Support System | International Journal of Scientific Research and Management Quick jump to page content Main Navigation Main Content Sidebar e-ISSN : 2321-3418 | Email: editor@ijsrm.in Register Login HomeWell-nighAbout the Journal Editorial Team Submissions Current Issue Archives Contact Home Archives Vol 6 No 09 (2018) Economics and Management Total : PDF: 53 XML: 1 | Total views: 54 When Citizens Are Minority: Toward Establishing A Comprehensive Emirati SME Support System Abbas Abdelkarim, × Abbas Abdelkarim . Close ArticleStagePublished : 5 September 2018 | Page No.: EM-2018-650-666 | Google Scholar DOI https://doi.org/10.18535/ijsrm/v6i9.em01 Article Text Article Info Citation Tools Article Metrics Abstract This paper endeavours to contribute to developing a comprehensive framework of institutional support system in a situation where citizens and citizen-owned SMEs form a minority in their own country. This is significant considering it is not serving only to the specimen study of this Paper, (United Arab Emirates), but is prevalent in all countries of Gulf Cooperation Council. Examining the current situation of Emirati-owned SME reveals many challenges and opportunities. Withoutdeveloping an empirical framework for SME support and providing wringer of the Emirati SME scene, the paper uses the benchmarking tideway (and Singapore has been selected for this purpose), and refers to other relevant literature, to discuss and develop constituents of the proposed support system. It concludes that Emirati SME support system may not be sustainable if not linked to a broader strategy for the minutiae of the country’s unshortened SME sector. Such a strategy, which the paper has not extended into, remains to be an zone for future research. Introduction andPreliminariesto the Research Problem The United Arab Emirates (UAE) is one of the six oil producing and exporting countries that constitute the Gulf CooperationSteering(GCC); others are Bahrain, Kuwait, Oman, Saudi Arabia and Qatar. The six countries share many similarities in their economic, social, political, demographic and cultural structures. As a result of oversized incomes derived from exportation of oil and gas, the GCC governments embarked on executing huge modern infrastructural projects and developing vast health and education facilities and other services in the last four decades. The enormous government investments pushed the level of economic activities to new unprecedented heights [?] . The huge minutiae projects tabbed for importation of foreign labour, whose influx has been progressing at unparalleled level, and has led to a well-constructed transformation of demographic structures in all countries of the GCC. Expatriates have wilt majority in population and labour gravity of the GCC region. While the GCC countries‟ stock of immigrant workers has been growing, their own local labour gravity has been facing increasing difficulties in finding jobs. Due to competition with the expatriates, citizens have opted to seek jobs t in the public sector that is offering priority of (more rewarding) employment to them. „Concern of the governments is that public sector jobs are not expanding at a rate commensurate with that of an increasingly educated national labour force, and the private sector employment has wilt the unchallenged domain of foreign workers‟ [?] . Nationalisation polices and projects aiming at expanding employment opportunities (including self-employment) for the citizens are stuff ripened in all GCC countries.Surpassingsigning the union between the emirates in 1971 (Abu Dhabi, Ajman, Dubai, Fujairah, Sharjah and Umm Al-Quwain; Ras Al-Khaimah emirate joined in 1972), their political umbrella was The Trucial StatesMinutiaeCouncil. TheSteeringorganised the first population census in 1968. By then, the local population worked majority. The 1970‟s witnessed significant transformations: the establishment of the UAE, production and exportation of oil and the start of massive infrastructural and social service projects and wide-ranging economic activities. By 1975, non-citizens became majority in the population and labour gravity of the country, and overly since their proportion has been augmenting. The citizens worked 20.1% of the total population in the last census in 2005, and 11.5% only equal to (the Government‟s latest) official estimates in 2010. Expatriates dominated the labour gravity by 90.9% in the latest census, making the UAE the world‟s lattermost specimen of dependency on foreign labour [?] . UAE is classified by the WorldWallas a highincome country.Equalto the WorldWallCountry Data [?] , UAE GDP at current USD in 1980 was unscientific at 43.6 billion; in 1990: 50.7; 2000: 104.3; 2010: 286.1; and in 2014 at 401.6 billion. In 2014, GDP per capita at current USD was unscientific at 42,522; and on the understructure of international dollar (PPP) at 63,497- putting the UAE in the world‟s 7th rank. While the laws stipulate that enterprises should either be wholly or majority-owned by UAE citizens (with the exceptions of micro enterprises operating in unrepealable crafts and all enterprises in the free-zones), the majority of the enterprises are powerfully owned by expatriates. To satisfy/go virtually the legal requirement, an enterprise fully or majority-owned by an expatriate is registered under the name of a local person (as owner or as majority shares holder), who receives a fee for this service as sponsor (locally tabbed „kafeel‟). The last population census of 2005 [1] makes misogynist the total number of employers and self-employed (business owners), but the number is not segregated by nationality group (citizens and non-citizens). The 2009 LabourGravitySurvey (NBS, 2015) provides this nomenclature as a percentage of all employed in the two respective groups. Using the two pieces of data, we can estimate the number of expatriate merchantry owners at 77,969 and the number of local merchantry owners at 4,820 (5.8 % of all merchantry owners) in the last population census. Research Problem, Objective and Methodology That only 6% of merchantry owners in any country are citizens and the rest are foreigners, poses enormous political and economic challenges to that country. In the UAE (as well as in the GCC region overall), major concerns raised were employment opportunities for the citizens and issues of economic sovereignty. The UAE citizens (Emiratis) operating in the SME sector squatter fierce competition with the expatriates. Expatriates are increasingly experienced and utilise own (same citizenship) networks within the UAE and in the country of origin. It is often the specimen that small entrepreneurs from a unrepealable nationality or ethnic background, tenancy a unrepealable line of worriedness within a unrepealable locality making it difficult for outsiders (citizens and non-citizens) to enter or to stay in the merchantry [?] . Wellpaid government and public sector jobs citizens enjoy entail a upper transitional forfeit to move to the merchantry sector. In addition, lack of merchantry wits of young citizens, fee derived as „kafeel‟ of businesses (without taking risk of the business) and lack of viable institutional support system to Emirati-owned SMEs play important roles in deterring (more) Emiratis to become, and succeed as, entrepreneurs [2] . The main objective of this paper is to establish and employ an empirical framework of SME institutional support system for the purpose of drawing a structure for the minutiae of citizen-owned SMEs in the UAE. The framework may be useful to other countries in the GCC region (where citizens are minority, moreover in the SME sectors), and, stuff based on international experiences, may be informative elsewhere also. The empirical framework wide in the pursuit section will be used for outlining what the paper considers as „necessary interventions‟ for the minutiae of Emirati SMEs and of Emirati entrepreneurship. What are considered necessary interventions will be identified through analysing the situation of Emirati entrepreneurs and of existing SME support organisations). Insights on how to intervene will be established using the benchmarking approach. Benchmarking and identification and transfer of weightier practices have been widely used in policy minutiae [3] . Policy benchmarking is well-nigh assessing current situation versus selected, relevant weightier practices. Singapore is selected as the main specimen for benchmarking (justification is given in section 2), in wing to allusions to other cases. It is to be noted at the start that there is no unified definition of micro, small, medium and large enterprise in the UAE. Defining an Empirical Framework of SME Institutional Support System The role of the state in supporting SMEs, including areas and extent of this support, has been debated in the literature. The roots of the debate lie in the ideological differences between economic liberalism and state interventionism. SMEs virtually the world are undoubtedly facing difficult situations, compared to larger enterprises, in many areas: wangle to finance, information, technology, markets, etc. There is a consensus that this unfavourable situation must be corrected, but the difference lies in whether the remedy should be by providing uncontrived government support (e.g. wangle to finance at less than market rate; subsidised services, etc.) or indirect support. The liberalists oppose that financial support (also in the form of subsidised services) leads to distortion of the market dynamics for the goody of SMEs, which do not necessarily represent the suitable size for all activities, and may not be, undisciplined to worldwide conviction, the constructive sector for employment generation. They moreover think that receiving subsidies could lead to reluctance of SMEs to grow into larger enterprises (so as not to lose support), and thus compromise efficiency standards. They conclude that the role of the state can alternately be „levelling the playing field‟ by removing obstacles facing SMEs, mainly lack of wangle to information, and by creating an enabling merchantry environment for all enterprises [?] . On the other hand, vestige shows that in the success of a number of East and Southeast Asian countries, the state (selective) intervention in the economy, including massive support to SME development, has been instrumental [?] . It is moreover evident that in all industrial and in many emerging and developing economies an SME support system has been instituted. (Whether the system, in all these countries, is bringing coveted economic efficiency and growth and social equity, is flipside story, and requires a case-by-case analysis). A main report prepared for OECD second SME Conference (OECD, 2004), establishes that one major lesson, self-sustaining of level of minutiae or region, gained from global wringer of SME minutiae is the need to have in place an SME strategy entrenched in the broader national minutiae agenda; crosscutting with many areas, like macroeconomic policies, micro economic merchantry environment, good governance, infrastructure, education, health, etc. Strengthening SME sector‟s competitiveness requires an enabling regulatory and legalistic environment, wangle to finance, minutiae of human and natural resources, supporting infrastructure, SME topics building, strengthening SME-FDI linkages and improving aid effectiveness. Providing a review of SME institutional support structure of four selected countries (two industrial, USA and UK, and two developing, Philippines and Thailand), the Report manifests that in all four, the system of institutional structure encompasses three levels; national, regional and local. The government finances or supports the financing of all these structures. All of these countries provide uncontrived support to SMEs through various programmes.Flipsidereport, prepared for European Commission, on reforming institutional support systems for SMEs in EU Candidate Countries, recommended the pursuit measures: 1formulating medium-term SME minutiae strategies; 2- improving the merchantry environment; 3- supporting the minutiae of coherent NationalMerchantrySupport System (for provision of resulting and constructive support services) ; 4enhancing wangle to finance (non-banking loans, probity and venture capital; wall guarantee) and 5strengthening entrepreneurial skills [4] The Global Alliance of SMEs [5] , on the understructure of global wits of SME minutiae support, identifies four major areas that constitute the support system. The first is establishing a well-constructed legal system in the form of unstipulated and/or specific SME laws and acts. The second is megacosm of sound and efficient government institutions for SME support. These include institutions at various levels, from national to local, entrusted with regulatory, legalistic and facilitation roles. The third zone is financial support. This comprises credit guarantee mechanism, uncontrived funding by not-for-profit organisations, establishment of venture and private probity market and facilitating wangle to wanted market financing opportunities. Establishing a diversified non-governmental service system to compliment the government‟s role represents the fourth area. The nongovernment system encompasses NGOS, trade associations and private sector, and offers a wide range of professional services to SMEs. In India, SME support system has been focusing on four main areas: technology, marketing, finance and skill development. A host of institutions form the technology support infrastructure; the Small IndustriesMinutiaeOrganisation and the Small Industries Service Institute stuff the main actors. These two institutions moreover play a major role in extending marketing support to SMEs; profitable them to participate in national and international zillion tenders and to reach to international markets in other ways. Small IndustriesMinutiaeBank of India (SIDBI) has been created as a specialised financial institution. In wing to uncontrived lending, SIDBI moreover refinances other financial institutions that lend SMEs. The Ministry of MSME of India has established a range of institutions to provide skill minutiae programmes. In India, the umbrella organisation for SME support is the Office of Commissioner-Micro, Small and Medium Enterprises (Export-ImportWallof India, 2009). The Small and Medium EnterpriseMerchantryAdministration (SMBA) is the principal SME institution in Korea, with 11 regional offices and 3 branches. Current focus of Korea‟s SME support system can be summarised as follows. 1Fostering megacosm of new start-ups, expressly technology-based, through improving merchantry environment for them, provision of information, enhancing youth entrepreneurship and expanding the management topics and safety network of microenterprises; 2- Removing obstacles facing growth of upper potential SMEs (including availability of trained human resources geared toward the needs of SMEs), and enhancing an enabling environment for the minutiae of creative and innovative SMEs; 3- Expand the range of financial solutions, including venture capital, and facilitating wangle to them; 4Enhancing the market wiring of SMEs through up-and-coming export topics and expanding local demand for SME products; ; and 5- Creating conditions for pearly trade to protect SMEs, and promote merchantry linkage between large enterprises and SMEs [6] . The challenges facing SME support system in Hong Kong, as has been viewed by Trade and Industry Department (2012), consist of the pursuit areas. 1- Maintaining favourable merchantry environment; 2- Expanding the range of EM-2018-653 financial solutions, including loan guarantee scheme, and enhancing SME knowledge well-nigh them and well-nigh financial management; 3Drawing up of guidelines on corporate governance for SMEs in collaboration with professional and trade associations, and fostering strategic partnership between SMEs and large enterprises; 4-Increasing supply of well-trained human resources; 5- Fostering using of technology and raising SME IT awareness; and 5Facilitating expansion of international markets (establishing SME Export Marketing Fund) and growth of local and Mainland markets. On the understructure of the unenduring reflections on international experiences portrayed above, the empirical framework of a comprehensive institutional system for SME minutiae is comprehended in this paper to consist of the pursuit four pillars:  Legislations, enabling environment and policy advocacy;  Finance and financial Services; Merchantryminutiae services (BDS); alternatively referred to as non-financial services;  Networking and merchantry linkage. Each of these pillars is understood to include relevant supporting legislation and/or policies, institutions and programmes. While variegated countries squatter variegated challenges, opportunities and options, this empirical framework may be towardly as a unstipulated tideway for analysing and developing SME support systems. The specific policy and functional issues addressed in this paper could be of special relevance to other GCC countries. The specimen of Singapore, which serves as a specimen for benchmarking, is presented on the understructure of the empirical framework this paper advances. SME Institutional Singapore Support System in Singapore‟s SME institutional support system has been selected for benchmarking for the pursuit reasons. While Singapore‟s SME system is not targeting minority citizens, it has been supporting an SME sector in a small country surround by relatively larger ones. Singapore is a prominent specimen of successful government intervention in the economy, and its SME institutional support system, only 30 years old, is regarded as one of the world‟s most comprehensive systems, from which other countries (emerging and wide alike) have been learning. For policy makers in the UAE, selecting Singapore for benchmarking could be well-flavored as a number of government institutions take the Singaporean government system as a model to be followed. It is to be noted that Singapore‟s public sector performance has been consistently, and for many years, ranked as number one or two world-wide by the World Competitiveness Report. For the year 2015/16, the Report places Singapore in the second place in the unstipulated global competitiveness alphabetize [?] . SMEs in Singapore (180,000 in number) subsume 99% of all enterprises, contribute nearly half of the GDP and employ 70% of the workforce (SPRING Singapore, n.d.). Legislation, Enabling Environment and PolicySponsorshipSingapore has undergone major economic structural transformations. Upon independence in 1965, it was a country with no natural resource, confronted with upper level of illiteracy and widespread unemployment. At the whence of the Millennium, Singapore has transformed into one of the world‟s fastest growing economies. Liang (2007) summarises the incubation of Singapore SME strategies as follows:  1965-85: The economic policy (spearheaded by the EconomicMinutiaeBoard-EDB) was focusing on industrialisation through attracting MNCs. SME minutiae was not specifically targeted.  1986: The new economic policy document entitled “Singapore Economy: New EM-2018-654 Directions” highlighted the need for developing SME policies and interventions. The EDB established a special SME unit.  1989: First SME Master Plan was launched.  2000: Second SME Master Plan (SME 21) was released. Unlike some other Asian countries (e.g. Japan and Korea) that have preceded Singapore in developing comprehensive systems for SME support, Singapore has opted to start with a plan and not SME law or act. The 1989 SME Master Plan came as result of recognition, incited by the 1985 recession, that local SMEs‟ role cannot be relegated to providing support functions to the MNCs. SMEs are a vital plug-in of Singapore‟s future economic minutiae [7] . The 1989 Plan was a comprehensive and a detailed document of programmes and deportment to create an enabling environment for the SME sector to wilt a capable player in facilitating economic growth and transforming Singapore into a newly industrialised economy. The Plan focused on: 1- promoting domestic entrepreneurship, technology adoption and innovation, 2-enhancing information mart on new methods and opportunities, including finance, merchantry planning and human resource management, 3facilitating wangle to training and consultancy services and promoting and transferring weightier merchantry practices to enhance growth and modernize productivity, and 4-encouraging SMEs to grow internationally [?] .Towerson the First SME Master Plan, SME 21 „Positioning Singapore for the 21st Century” envisions the megacosm of an SME sector which is „a source of entrepreneurship and innovation; a wiring of strong supporting industries and strategic partner for foreign SMEs and MNCs; manufacturer of high-value widow products, global provider of professional services; robust domestic service sector enhancing the quality of life in Singapore‟ [8] . It is to be noted that SME plans/strategies in Singapore are continuously stuff reassessed during implementation, and changes and/refinements are introduced when necessary. In Singapore SME support system, the two most prominent actors are the Ministry of Trade and Industry (MTI), at the level of strategies and policies, and SPRING Singapore, at the level of policy sponsorship and support programmes. Other specialist and functional organisations are moreover constituents of the structure. SPRING Singapore started as the National Productivity Board (under MTI) with a mandate not focusing only on SMEs. In 1996, it merged with related functions of EDB (including SME Unit) to form the „Productivity and Standards Board‟ (PSB). Then, without SME 21 was released, which focused on growth and innovation, PSB was renamed as SPRING „Standards, Productivity, Innovation and Growth‟ [9] . SPRING is considered the paramount institution for SME support in Singapore. Selected Finance and Non-Financial Service Programmes Unless mentioned separately, the unelevated draws on the website of SPRING [?] . Finance A wide range of SME finance options are misogynist both for start-ups and established enterprises. SPRING SEED is the investment arm of SPRING Singapore. It finances start-ups though two major schemes. SEED runs the equitybased co-financing option geared toward innovative start-ups that have strong international growth potential.Flipsideco-financing scheme is theMerchantryAngel. Start-ups that are worldly-wise to vamp investment interest from any of the merchantry sweetie-pie investors can wield for similar investment from SPRING SEED. Both the sweetie-pie investor and SEED then wilt probity holders in the company. SPRING and others organise merchantry project competition among school and junior higher students with the aim of towers and enhancing merchantry capabilities. The YES! Schools programme offers funding for the winning projects. In this way, the programme contributes to creating new start-ups. For established enterprises, one important source of finance is the Local Enterprise Finance Scheme. The scheme offers credit of up to S$15 million for SMEs owned by Singaporeans. The Micro Loan Programme provides credit of up to S$100,000 for micro enterprises (10 or less workers) owned by Singaporeans. Established companies moreover goody from the Over-the-CounterWanted(OTC); which is a trading platform for unlisted companies to raise wanted through selling shares (see the website of MAS- Monetary Authority of Singapore). Start-ups and established companies may goody from the Loans Insurance Scheme, which insures loans versus default risks. Premium is paid by the government and the SME. Non-Financial Services SPRING assists SMEs sufficiency minutiae mostly through financial subsidies. The CapabilityMinutiaeGrant covers up to 70 percent of forfeit of sufficiency enhancing. Innovation &SufficiencyVoucher (of $5,000 value) is given to encourage SMEs taking first deportment in developing their capability. Companies investing in enhancing productivity and innovation can be offered grant in form of tax deduction. Private sector providers unhook the sufficiency enhancing programmes (training, consultation, etc.) that SMEs may demand using the grants offered by SPRING. SPRING moreover subsidises private sector incubators by offering them up to 70% grant to hoist their capabilities to squire start-ups.Flipsideroute SPRING uses to raise SME capabilities is through the Online Toolkits; which are ways for enterprises to evaluate their strengths and weaknesses and develop solutions. Toolkits imbricate areas of consumer service, financial management, marketing and productivity. Technology innovators may lack the worthiness to commercialise their inventions. The Technology Enterprise Commercialisation Scheme assists start-ups with persuasive technology intellectual property to commercialise their projects. Since the First SME Strategy, Singapore has been encouraging the internationalisation of SMEs. The Enterprise International Singapore furthers international presence of SMEs through provision of topics minutiae programmes, funding participation in external trade fairs and helping them to wangle finance. It has moreover set an office in China to squire SMEs inward the Chinese market [10] . Enhancing productivity of SMEs through use of technology has been flipside focus of Singapore SME strategy. InfocommMinutiaeAuthority (IDA) is regarded as the Government Chief Information Officer. Its mission is to identify and facilitate adoption of ICT generally. In 2010, iSPRINT programme was established to uplift SME adoption of ICT technology [11] . Networking andMerchantryLinkage The two entities that serve most the networking needs of SMEs are the Association of Small and Medium Enterprises (ASME) and Trade Associations and Chambers (TACs). ASME was established in 1986 as a not-for-profit organisation of SMEs with the aim of promoting a increasingly conducive merchantry environment which facilitates starting, growth and minutiae of SMEs. ASME is a major representative of, and networking venue for SMEs. It disseminates information to its members and organise regular networking events that facilitate merchantry linkages [12] . Six TACs have been established: Association of Singapore Marine Industries, Print and Media Association, Restaurant Association of Singapore, SingaporeMerchantryFederation, Singapore Food Manufacturers‟ Association and Singapore Furniture Industries Council. TACS are important settings for reaching out to SMEs to share information on new industry developments and opportunities, as well as making them enlightened of the opportunities the government offers for SME support [?] . TACS enter into partnership with SPRING to develop specialised clusters. Clusters, as is known, offer enterprises immense opportunities to modernize productivity raise competitiveness and cooperate in many other ways. From flipside side, TheMerchantryAngel programme (and other similar programmes) coordinated by SPRING, and the OTC platform organised by Monetary Authority of Singapore provide SMEs with opportunities to link with potential investors/entrepreneurs. The Singaporean SME minutiae wits offers many lessons from which the Emirati SME support system could learn. Toward Establishing Institutional Support System Emirati SME This main section starts with a review of the situation of Emirati SMEs. A unenduring note on the need for intervention will precede the discussion on pillars of the institutional support system. Emirati Entrepreneurs: AWringerBrief Situational The first published works on SMEs in UAE [?] were carried out within a project by the Ministry of Labour in 1999 to develop a strategy for the minutiae and employment of the Emirati labour force. The Ministry‟s project resulted in the establishment of TANMIA- the National Human ResourceMinutiaeand Employment Authority [?] . It is within TANMIA‟s Centre for Labour Market Research and Information (CLMRI) that the first studies focusing on Emirati entrepreneurs- based on small surveys and in-depth interviews providing quantitative and qualitative insights- were concluded. These studies [?] stand out to stage as the most informative on the subject, and they served as sponsorship for the need to intervene in support of Emirati SMEs.Pursuitthem, works based on interviews with Emirati entrepreneurs that are relevant to this paper are scarce, and include reports of GEM (Global Entrepreneurship Monitor). These reports target both Emiratis and expatriates [13] . The review unelevated draws on CLMRI and GEM studies. Emirati entrepreneurs raised the initial wanted for their new businesses mainly through personal sources (59%), through family (12%) or through banks (22%). Major worriedness is trade, which represents a historical continuation of the Emirati merchantry profile, followed by services and, to a less extent (1 in 7), industry [2] . When seeking merchantry advice, surpassing and without establishing their businesses, Emirati entrepreneurs rely increasingly on social (family and friends) than on external newsy (professional and market) networks [?] . Majority of Emirati merchantry owners (80%) were in full-time (mainly government) employment during and without establishing their business. Secured and lucrative government jobs are difficult to leave in order to take up (insecurities of) private merchantry [?] . With the relative ease of importation of labour, it can moreover be added; Emirati entrepreneurs can hands find experienced, low forfeit expatriates as full-time operation or unstipulated managers of their businesses. The Emirati entrepreneur‟s role would be unstipulated supervision. This sounds a rational visualization when engaging in merchantry is considered as a source of uneaten income, and not the sole source of livelihood. The major problems Emirati entrepreneurs faced without establishment were: 1- competition with other owners, expressly expatriates who get support through their networks, 2- finance, 3marketing and 4-lack of institutional support. They believed that their success chances were low or very low (55%) or pearly or good (45%) [2] . Emirati businesswomen‟s particular problems are: 1- securing institutional funding, 2lack of previous wits in business, 3handling government procedures, and 4- in some cases, lack of support of husbands and/or family [14] . To the question why UAE citizens are reluctant to enter into private merchantry in larger numbers, the answers were as follows: “not used to this kind of wits with unknown outcome”; “lack of wanted to start the project”; “lack of institutional support to Emirati SMEs”, and “low rate of return to investment” [2] . It should not be understood that Emiratis‟ entrepreneurial activities are relatively lower than the expatriates‟. As per GEM‟s measurement of Total Entrepreneurial Activity-TEA (a category consisting of nascent entrepreneurs and new entrepreneurs less than three and a half years in business) of Emiratis was 10.4% of Emirati sultana population in 2011; which is higher than the rate of expatriates; 5.6% [13] . However, it should moreover be noted that the opportunities (both legal and financial) for Emiratis to engage in merchantry are higher. In addition, the overwhelming majority of sultana expatriates come to the UAE (and have a legal status) as wage earners, if we exclude twin family (to note: only a very small segment of expatriates is unliable to bring family). Emiratis moreover surpass expatriates in the rate of merchantry discontinuation: 4.5% versus 2.2%. Main reasons stated were „personal reasons‟ (35.8%) and merchantry „non-profitable‟ (32.3%). By gender, the reasons varied considerably: 50.7% of Emirati men attributed latter merchantry for „business not profitable‟ (against only 14.3% of women), and 66.7% of the women stated „for personal reasons‟ (with only 12.4% of men). The GEM report commented that cultural pressures (familial commitments) could be the reason for the upper incidence of „personal reasons‟ among women [13] . The Need for a Support System Supporting the minutiae of the unshortened SME sector in UAE is vital to growth and diversification of the economy (and the need for this will be highlighted below). However, our main snooping here is the minutiae of a system of institutional support for Emirati entrepreneurs. The need for such a system is justified by the following. 1. They represent a minority engaged in a sector mostly dominated by expatriates and squatter fierce and inequitable competition. Expatriates proceeds their competitive wholesomeness by using strong networks withal ethnic/nationality lines, which enables them to cooperate with each other and with larger enterprises within the same network inside the UAE and in the countries of origin [?] . In this way they get support not only in accessing markets and finance (also nonbanking loans), but moreover by benefiting from the wits of older and/or larger enterprises. 2. Competition with expatriates often causes higher rate of merchantry discontinuation among Emirati SMEs (double the expatriates‟ rate). 3. Citizens entered many merchantry activities relatively late (historically trade constituted the main zone of worriedness of Emirati businesses, and still is). 4. A system supporting Emiratis in merchantry ventures helps diversifying their opportunities for economic participation and enables them to urgently engage in formulating future directions of their national economy. Enabling Environment, Legislation and PolicySponsorshipThe SME legislative scene in the UAE witnessed a major development. In April 2014, a federal SME Law was signed, objective of which is to encourage Emiratis to run SMEs. The law identified EmiratesMinutiaeBank, established in 2011 (with a wanted of AED 10 EM-2018-658 billion to help uplift economic development) to provide government funding (40% of its assets) to Emirati SMEs. The Law tabbed for the insemination of SME council. It moreover stated that government entities and companies, in which the government owns increasingly than 25% of the total capital, are to contract with Emirati SMEs by at least 5% of the total value of their contracts. Listed companies are tabbed upon to follow suit (The National, 13 April 2014). It should be noted that in their pursue of creating enabling environment for SME development, countries may use laws and acts as legislative tools and translate them into policies and programmes, implementation of which is entrusted to specialist institutions. In Japan, for example, the Small and Medium EnterprisesVitalLaw was issued in 1954. This was followed by other subsidiary legislations, such as the Financial Assistance Act, in wing to a large number of policies and regulations, formulated when necessary to enhance SME minutiae in variegated stages/situations (Ituh and Urata, 1994). Other examples are the USA SmallMerchantryAct (1953), Korea SmallMerchantryLaw (1966) and Indonesia Small Enterprise Act (1995), to mention only some. In the UAE, the SME Law and the megacosm of SMESteeringare positive initial steps. SME laws are often vital pointers and serve as a receptacle for remoter undertow of whoopee (acts targeting specific areas, strategies, policies, programmes, etc.). It is the responsibility of the UAE SME Council, specific responsibilities of which have not yet been formulated (personal liaison from aSteeringmember in November 2015), to lead remoter actions. On top of theSteeringagenda is the formulation of a strategy. It is important to emphasise that a strategy for the minutiae of Emirati-owned SMEs, that aims to be constructive and sustainable, cannot be wide without the presence of enabling environment for the minutiae of the unshortened country‟s SME sector. Emirati SMEs simply cannot flourish if the merchantry environment for SMEs in the country is not conducive and when economic conditions for growth are lacking. The specific strategy (or plan) to enhance participation of Emiratis in the SME sector is to be linked to a strategy for enhancing the merchantry environment for minutiae of the country‟s SME sector. The requirements of this have never been thoroughly researched before. The Emirati SME- focused strategy should identify the specific areas in need of intervention and specific plans linked to these areas; as well as plans for strengthening of existing and establishing of new support institutions –as required– that can be prescribed the implementation of the plans set for each intervention zone identified. Singapore SME strategies; identifying challenges, opportunities and priorities, and on their understructure formulating intervention programmes, offer a lot to learn from. Emirate-level SME support institutions exist in all seven emirates. They work without a countrylevel coordinating mechanism, lack of which hampers their effectiveness and efficiency. UAE is a small country, and some emirates are very small population- and economic activity-wise. Support programmes devised may often lack the hair-trigger mass of beneficiaries. The UAE SME Council, having representation of all emirates, is to write this issue. One issue that transpired whilom is that the majority of Emirati entrepreneurs are full-time wage employees, predominantly in the government sectors (federal or emirate-level). For the same level of wits and qualifications, Emiratis receive higher wage than expatriates in the government, and what they receive in the government is mostly (much) higher than what they would have received in the private sector [?] . In wing to labour market imbalances that might have been created, this situation will protract to feed the thinking among many/majority of Emiratis that merchantry venturing is only a source of uneaten income. It is of undertow rational to think in this way; enjoy goody of relatively upper wage and secure employment and stave insecurities of EM-2018-659 merchantry ventures. However, such situation („halfheartedness) will make it difficult to whop Emirati entrepreneurship; create a generation of innovative entrepreneurs. One idea that floated in the past is to hogtie government funding recipient entrepreneurs to focus full-time on the enterprise, and, at the time, grant them the opportunity to return to the government job within a unrepealable number of years. Another, that the tragedian of this paper has been propagating, is that while governments have the right to directly and indirectly (re)distribute part of the national wealth to their citizens, this should not be achieved in the form of topping wages, which distorts labour market functioning as well as negatively affects work ethics. Such „reward‟ should be based on citizenship, not wage employment, and in this way all eligible citizens receive it regardless of economic activity. It can of undertow be regulated in a way to enhance social equity; less or no reward for the high- income categories, and vice versa. Working on such a scheme is long term, but so is towers a robust national SME sector (and realise sustainable socio-economic development). Finance and Financial Services The first SME finance project in the UAE was AlTomooh (means ambition) established by the then Emirates InternationalWall(now Emirates National wall of Dubai) in 1998. Up to 2013, 130 Emirati-owned projects, mostly in Dubai, had been granted loans for a total of 60 million Arab Emirates Dirhams (1 USD = 3.65 AED) (AMEinfo.com, 18 March 2013). SME institutions (supporting Emiratis) have been established in all emirates, as mentioned earlier. The two most important ones are based in Abu Dhabi and Dubai (the two major emirates, between which most of the GDP is produced). The first SME- organisation in UAE was founded in Dubai in 2002; Mohammed bin Rashid Establishment for SME Development, wontedly known as Dubai SME. Dubai SME until recently was not providing uncontrived finance and was only profitable SMEs to wangle wall funding. Recently, CEO of Dubai SME spoken launching of a new fund with resources totalling AED 600 million. The Fund offers innovative Emirati SMES based in Dubai emirate two types of loans; 1-SeedWantedloan- offered directly to start-ups in the range of AED 50,000 to 500,000, and 2- Credit Scheme Loan for both start-ups and existing enterprises requiring a fund of AED 500,00 to 5 Million (WAM Emirates News agency, 12 April 2015). Khalifa Fund was established in 2007 by Abu Dhabi government to help develop Emirati SMES, especially, but not exclusively, in Abu Dhabi emirate. Currently, wanted misogynist to it is AED 2 billion. Funding programmes include: Bedayaoffers to start-up loans up to AED 3 million; Zeyada- under this programme established enterprises may receive up to AED 5 million for expansion; Tasneea- earmarked for industrial enterprises for value up to AED 10 million; Khutwa (microfinance; loan up to Dirham 250,000)- directed primarily at home-based businesses and is social in nature targeting special groups (divorced women, widows, etc.). In addition, the Fund finances „social outreach‟ programmes (for Emiratis with special needs; inmates and former drug addicts) [15] . None of the two organisations publish periodic reports on operations. So, it is not possible to assess the scale and reach of funding activities. The Emirati-dedicated SME finance scene may be summarised as follows: Khalifa Fund represents the only SME organisation with serious funding misogynist to it. Dubai SME is whence to have its own source. Websites of SME organisations in other emirates do not indicate presence of defended SME funds. The wits of Singapore (and other countries) in creating a wide range of SME financial solutions, may be informative in seeking spare sources. The UAE enjoys a wide network of banks, many of them with SME finance programmes. But these banks require collateral for the provision of finance, which most of SMEs cannot provide, expressly the start-ups. Some countries (e.g. India) through its Central wall oblige banks to intrust a unrepealable percentage of their loan portfolio to SMEs ((Export-ImportWallof India, 2009). Many other countries (e.g. Singapore) opt for establishing loan insurance programmes. These programmes may moreover support loan interest and negotiate grace periods (for wringer of some international experiences, see OECD, 2013). The establishment of loan guarantee programmes in the UAE can ease the undersong on government funding. It is to be noted that Dubai SME has a whence in loan guarantee system. The EmiratesMinutiaeBank (now prescribed as the principal Emirati SME funding institution) may want to include a loan guarantee scheme in its range of financial services. Private venture wanted may be raised through Over-The-Counter (OTC) wanted markets. OTCs raise wanted for existing or start-up companies with growth potential. In wing to Singapore, OTC wanted markets function in other countries. In Korea, for example, KONEX, part of Korea Exchange, focuses on raising venture wanted for promising start-up SMEs (see website of KONEX). When the Emirati SME sector has been assessed as reaching a unrepealable maturity level, OTC market can be initiated. In wing to raising funds, venture wanted may have non-financial benefit; it can contribute to strengthening the management topics of the SMEs, as they can take wholesomeness of the knowledge of increasingly experienced investors partnering with them. In the same way, theMerchantryAngel scheme of Singapore can be replicated. That a merchantry sweetie-pie investor is willing to invest in a start-up, could be a strong indication to the SME funding organ of the viability of the project. BusinessMinutiaeServices (BDS) In wing to funding opportunities, SMEs require services in other areas: wangle to information, management and technical capabilities, marketing, wangle to technology, etc. All these non-financial services are included under the notion of BusinessMinutiaeServices [?] .Withouttens of years of wits in supporting SMEs in the developing countries through BDS programmes run directly by governmental or nongovernmental organisations, the system has been judged by the Donors Committee as inefficient; reaching only a limited segment of the SMEs and marred by setup and self-indulgence [16] . The option that seems to come wideness was to consider moving to the "market minutiae model", which ways letting private sectors provide BDS, while governments and donors develop the market for BDS. Government SME organisations supporting Emirati-owned SMEs provide some BDS, mainly at the start-up phase. Though Dubai Entrepreneurship Academy and incubation centre, Dubai SME squire start-ups to proceeds merchantry knowledge [?] . Khalifa Fund organises topics towers programmes (face-toface and on-line) to the Fund members, for both start-ups and established SMEs [15] . It is not well-spoken whether these services are provided directly by the organisations themselves or through private providers. Three major issues squatter policy makers in the UAE in the search for efficient BDS system. 1. Providing BDS entirely through defended public institutions run the risks of inefficiency that the international literature has been warning about. 2. The market for private BDS currently seems to be weak (the rationalization in the first place is deemed to be demand-deficiency, as in an unshut economy like the UAE, it will not be difficult vamp viable providers, if sufficient demand arises). This market needs to be ripened as a first step. 3. Emirati SMEs subsume a very small segment of the SME sector (in a small country). To develop a BDS market tent all areas, and based on the needs of Emirati SMEs alone, will be a difficult and plush undertaking. The solution may be to develop a BDS market (expanding both the demand and the supply sides) to serve all businesses, with Emirati SMEs organisations (as per their mission) providing support to Emirati citizens. Developing a viable BDS market helps to enhance capabilities, productivity and innovation of the unshortened SME sector in the UAE which, as has been mentioned earlier, is a necessary condition for sustainable growth of the economy and of Emirati-owned SME enterprises themselves. Governments in countries with SME support systems tend to be urgently involved in information hodgepodge and dissemination as an important condition for creating a market for BDS. Information is provided usually by specialised information centres (public mainly, but moreover private). The information provider acts as an intermediary between enterprises and BDS providers. It provides information to service providers regarding the needs of SMEs, and to users well-nigh the misogynist services and their benefits. It is important that a UAE government organisation to seem a leading intermediary role. Providing information on BDS, negotiating with providers and grouping of Emirati beneficiaries to avail of the services can be unsupportable by the existing SME organisations, which may moreover offer translating on other matters, like government regulations, wangle to finance, etc. through „onestop centres‟, that exist in a number of countries. In organising BDS support for Emirati entrepreneurs, two methods, among others, may be used. 1- SME organisations may contract private providers to unhook the services to their beneficiaries, with the beneficiaries receiving this service self-ruling of tuition or in a subsidised cost. 2Introduce use of the voucher system. The voucher system is expressly useful for established enterprises, which are increasingly capable of identifying their specific needs and of selecting providers, and, at the same time, may offer them the opportunity, while using the service in a group, to mix/network with expatriates with variegated backgrounds and experiences. Networking andMerchantryLinkage Findings of CLMRI and GEM studies referred to whilom reveal that Emirati entrepreneurs lack effective, institutional networking. They mainly depend on social networks (family and friends) in getting merchantry information and whimsically there is any coordination of merchantry activities among them as groups. Examples of temporary networks in the UAE are to be found in Khalifa Fund and Dubai SME. Members are occasionally invited to shepherd special events. UAE Businesswomen Councils, structured at UAE- and emirate-level, and include citizens and expatriates, follow the same pattern of networking (Emirate Businesswomen Council‟s website). Creating permanent liaison channels/networks among the Emirati SME owners, is a task of upper significance. Global wits has shown the advantages of these networks, not only to support SME merchantry minutiae through sharing of information and experience, but moreover to make their voices heard by, and enable them to coordinate with their institutional surrounding [17] . Such permanent networks in the form of associations can be geographic and may be remoter segmented by specific merchantry activities. Initially, such organisations may be created at the level of individual emirates, and at a later stage they can evolve into a networking relationship wideness emirates, creating permanent networks in the form of functional associations and a national one. The SME steering can contribute to establishing such associations in cooperation with emirate-level Chambers of Commerce and Industry and existing SME support organisations.Flipsideform of networking is when groups of SMEs come together to strengthen their competitive position to unzip economies of scale; by, for example, obtaining zillion purchase of input, meeting large orders and benefiting (for less forfeit per firm) from topics towers programmes. This horizontal networking moreover allows SMEs to enhance their strategic management and innovation capacities by learning from each other and taking joint decisions. Vertical networking/business linkage occurs when the enterprise specialises in its cadre merchantry and subcontracts other related activities to flipside firm/other firms. This may ensue between SMEs or between large enterprises and SMEs. Vertical and horizontal networking is often facilitated within clusters. UNIDO (2001, p.9) defines clusters “as sectoral and geographic concentrations of enterprises that produce and sell range of related or complimentary products and, thus, squatter worldwide challenges and opportunities”. Such clusters unshut merchantry opportunities for specialist suppliers, zillion traders and service providers. Clusters sally in all countries mostly naturally, but moreover through enterprise selforganisation and through government facilitation. The SME Council, with economic minutiae departments and chambers of commerce and industry, may take initiative in facilitating megacosm of technology-based clusters. May be such clusters are not be defended to Emirati SMEs only; relevant expatriate-owned enterprises may be included. Experienced expatriate technology entrepreneurs working in the same clusters with Emirati SMEs would facilitate knowledge transfer, enhance joint learning and may provide desirable complementarity in activities of such clusters. Opportunities for expanding merchantry linkages between Emirati SMEs and large enterprises could be facilitated by the SME Law, which entails government companies (and those in which the government owns increasingly than 25%) to intrust a unrepealable percentage of their contracts to SMEs. This may evolve into large companies „adopting‟ unrepealable SME suppliers and subcontractors. Such linkage could encourage large companies to take interest in improving productivity of their SME suppliers/subcontractors. Japanese conglomerates, among others, are good example of this. A Concluding Note The fact that citizens in UAE subsume only 6% of the merchantry owners in the country, together with a situation in which young men and women are facing difficulties in finding employment, have put a lot of pressures on the government to take actions. Recently, the government enacted the SmallMerchantryLaw and established UAE SME Council. This step has created the vessel for establishing a comprehensive institutional support system for the minutiae of Emirati-owned SMEs. Government intervention supporting the SME sector (in various ways) is a global phenomenon, and may be plane increasingly essential in the conditions of empowering a minority. This paper contributes to the establishment of such a support system. However, it is important to emphasise that Emirati SMEs may not grow in a sustainable manner if conditions for growth of the unshortened SME sector are lacking. Hence, the first step is to promote an enabling environment for the minutiae of the country‟s overall SME sector. This is to be followed by, or meantime workaday with, enhancing support structures for up-and-coming Emirati SMEs.Towersup a UAE country SME minutiae strategy, in wing to elaborating on the constituents of the strategy to support UAE citizens, remain areas for remoter research. 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[ CrossRef ] [Google Scholar] Downloads Download data is not yet available. Comments & Peer Review Please enable JavaScript to view the comments powered by Disqus. Author's Affiliation Abbas Abdelkarim Google Scholar Copyrights & License International Journal of Scientific Research and Management, 2018. This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Article Details Issue: Vol 6 No 09 (2018) Page No.: EM-2018-650-666 Section: Economics and Management DOI: https://doi.org/10.18535/ijsrm/v6i9.em01 How to Cite Abdelkarim, A. (2018). When Citizens Are Minority: Toward Establishing A Comprehensive Emirati SME Support System. 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