Small and medium-sized enterprises (SMEs) in the United Arab Emirates (UAE) are the most export -focused in the world, according to global insurer Zurich.
The group’s study, entitled
‘Challenges, Risks and Opportunities for Small and Medium Enterprises’
, suggests that 26% of UAE SMEs cite expansion overseas markets as the biggest opportunity during the next 12 months.
Zurich surveyed more than 3,250 SMEs across 12 countries, including 250 businesses in the UAE. Twenty-six per cent of SMEs in the UAE reported that they expanded their exporting activities over the past 12 months – the highest figure across all surveyed countries and double the global average of 13%.
The figure comfortably exceeds those in the survey from established exporting countries such as Switzerland (15%), Germany (8%) and Brazil (8%). As well as targeting overseas growth, 30% of SMEs in the UAE also reported that they expanded their activities to target new domestic customers over the past year, which compares with a global average of 23%.
Asked what they view as the biggest opportunity for their business over the next 12 months, SMEs in the UAE again focused on exports, with 28% of respondents citing expansion to international markets as a key opportunity for their business. This figure was double the global average of 14% and significantly higher than Switzerland (10%), Germany (10%) and Brazil (9%).
Zurich’s study suggests that the domestic and international expansion of SMEs in the country is supported by the perception of the UAE as a low-risk jurisdiction, with high competition (42%) considered to be the biggest threat. Other potential risks, such as cybercrime (6%), natural catastrophes (4%), fire (3%) and malicious damage (zero) are considered to be nominal.
“Zurich’s findings illustrate a sense of real ambition and confidence among SMEs in the UAE to grow their businesses overseas, at a time when other global small businesses are far more cautious about international expansion,” said Brian Reilly, chief executive officer (CEO) of Zurich’s general insurance business in the Middle East. “This represents good news for the economy as SMEs are a vital economic growth engine for the UAE.
“The findings in our SME research highlight the strength of the UAE as key global trading hub, which benefits from a low business risk perception that encourages small businesses to invest in expanding their operations and seek international growth opportunities.”
The survey shows the percentage of SMEs that see international expansion as a key opportunity over the next 12 months led by the UAE at 26%, followed by Switzerland, Mexico and Spain (all 15%), Australia and Ireland (14%), the UK (10%), Portugal and Indonesia (9%), Germany and Brazil (8%) and Italy (6%).
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