One of the fastest developing cities in the world Dubai had seen its ups and downs ever since it began its journey upwards after oil was discovered. It was just a port sustained by the pearl industry and now it is one of the most sought after business-destinations in the world. The progressive, forward-thinking, innovation-minded leaders had ensured its steady rise in the global map.
With world-class infrastructure, free-market policies and its prime location joining the East and the West, which gives it easy access to the Asian, European and African markets, Dubai had become the economic hub of the Middle East. But the Gulf Tiger, as it is often called because of its resilience to survive and grow, had seen various ups and downs throughout. Dubai survives the earlier crisis and is recovers fast from the recent one is because of one mantra- Diversification.
The cosmopolitan city of Dubai has diversity ingrained in it already. In 2020 it had expatriates make up about 92.05% of its population (as per https://www.dsc.gov.ae). Over 200 nationalities reside in this stellar city and it boasts nearly as many cuisines from around the world. Investors and business-men from all over the world had chosen this city as the place to be to conduct their business. So it is only natural that this ideology is applied to its business sector as well. It is an age-old saying: “Do not put all your eggs in one basket”. That is just smart logic. If one segment falters, you have the others as back-up. So Dubai had been exploring business sectors other than oil-based or gas-based markets as all know that the reserve would not last forever.
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Advantages of diversification:
- Diversification helps to generate more returns as it ensures that one is not dependent on a single source.
- Diversification reduces the risk of loss. As all investments are not put into a single type, the risk of loss is minimized.
- Diversification can help conserve savings. Investors closing retirement need to protect theoir capital and diversifying their portfolio helps them do just that.
Dubai’s strategies to diversify:
- Government Initiatives and Strategies:
“UAE Vision 2021” and “National Innovation Strategy” are two of the many state-sponsored programs that promote the shift towards a more knowledge-based economy.
- Upgrading its Business strategies with time:
The discovery of oil had helped to propel Dubai towards greatness. But knowing that being a solo-commodity economy would not sustain it for the longer term, Dubai had undergone various changes like inclusion of 5% VAT in 2018 and diversifying in business by significant investments in various sectors like infrastructure, healthcare, education, renewable energy, etc.
- Keeping an eye towards the future:
Creating additional revenue-streams is the major goal. Keeping that in mind, recently e-commerce had developed immensely in the logistics sector, especially during these pandemic times that saw the world getting confined at home.
Dubai’s diversification had caused it to become a prime example of a resilient economy in the recent adverse times. Its exemption from corporate tax and 100% repatriations of capital and profit attracts investors form Asia, Europe and America to its shore. One can start a business in Dubai, in various sectors like consultancy, banking, insurance, production, construction, real estate, transportation, food, communication, etc. The opportunities are endless.
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