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Abu Dhabi: A thriving haven for investors

Abu Dhabi: A thriving haven for investors
8 May 2024 07:45

ISIDORA CIRIC (ABU DHABI)

In an era marked by global economic unpredictability, Abu Dhabi stands out as a resolute oasis for both burgeoning entrepreneurs and seasoned investors. The emirate’s strategic initiatives and robust economic policies have carved out a niche as a fertile haven for business growth and innovation.

The recent figure announced by the UNCTAD World Investment Report 2023 speaks volumes: the UAE attracted an astounding $23 billion in foreign direct investments the year prior, showcasing its growing influence on the world stage.

According to Massimo Falcioni, the Chief Competitiveness Officer at the Abu Dhabi Investment Office (ADIO), Abu Dhabi’s allure for investors transcends its financial incentives; it is a holistic ecosystem that nurtures success and innovation.

Why Abu Dhabi is Attractive for Investors

In an interview with Aletihad on the sidelines of the Annual Investment Meeting Congress 2024, Falcioni said that Abu Dhabi offers a trifecta of essential benefits: access to capital, political stability, and strategic market accessibility, adding that Abu Dhabi not only welcomes but actively nurtures investment and innovation.

Moreover, the emirate boasts a strong support system for startups, particularly through its 12 accelerators, including Hub71, which has been instrumental in driving the success of over 265 tech startups by facilitating crucial early-stage funding and operational support, Falcioni added.

ADIO plays a critical role in this ecosystem, serving as a bridge between investors, entrepreneurs, academia, and the government.

This unique integration enables Abu Dhabi to offer a comprehensive support network that extends beyond financial backing to include mentorship, research collaboration, and a platform for continuous learning and development.

“The idea is to really support them to set up properly and quickly, in terms of administrative procedures for getting the visa, opening bank accounts - whatever needed,” Falcioni said.

Moreover, Abu Dhabi’s strategic geographical location as a crossroads of trade routes enhances its attractiveness as an investment destination. “Our position allows easy access to international markets, which is a key factor for attracting trade,” Falcioni noted, adding that Abu Dhabi provides them with access to millions of people globally.

This strategic advantage is complemented by world-class infrastructure, from state-of-the-art telecommunications to robust transport networks, all designed to support both business needs and enhance the quality of life for residents and expats alike.

The Strategic Role of ADIO

ADIO stands as a linchpin in Abu Dhabi’s investment landscape, strategically designed to ease and enhance the investor journey.

ADIO is not merely a facilitator; it is a catalyst for seamless integration into the local economy, Falcioni explained, emphasising the dual role of the agency in welcoming investors and embedding them into the fabric of Abu Dhabi’s economic and cultural life.

Furthermore, ADIO’s proactive approach includes connecting investors with local market champions and stakeholders, ensuring they are not navigating the business environment alone.

This is about accelerating investment by facilitating every step of the process, making it as streamlined as possible, Falcioni noted. This not only speeds up the initial setup, but integrates investors into a supportive ecosystem that fosters long-term success and growth. "This is a very important edge of acceleration for investors, because they're not alone," he added.

One of ADIO’s critical functions is managing public-private procurement tenders, a responsibility that places it at the heart of Abu Dhabi’s economic strategy, according to Falcioni. “For those who are supported by ADIO, this will bring additional business,” he underscored.

ADIO’s Key Sectors

Abu Dhabi’s investment strategy is discerningly selective and futuristic, targeting sectors that promise high innovation and technological advancement.

“Our priority lies in sectors that embody high-tech and innovation, such as financial services, healthcare, and industrial investments incorporating advanced technologies,” Falcioni revealed.

The commitment to technological advancement is not just about fostering growth, but also about leading the shift towards Industry 5.0, according to Falcioni. This new industrial revolution emphasises collaboration between humans and machines, focusing on enhancing social welfare and environmental sustainability alongside economic development.

Moreover, Abu Dhabi is making significant strides in the realm of smart mobility, a sector that has become increasingly critical as urban populations grow. Falcioni highlighted the Smart and Autonomous Vehicle Industry (SAVI) cluster, an initiative that exemplifies ADIO’s approach to creating holistic ecosystems.

“The idea was to combine suppliers, manufacturers, the market, and the authorities, all in the same cluster to facilitate the development of various kinds of innovative solutions,” he said, adding that the cluster approach enables faster development and implementation of pioneering mobility solutions that could redefine urban transport.

The sectors targeted by ADIO are integral to Abu Dhabi’s broader economic diversification strategy, the ADIO competitiveness chief explained. By focusing on high-tech and innovative industries, ADIO ensures that the investments it attracts generate economic returns as well as contribute to the sustainable development of the emirate.

The Broader Impact

More than attracting capital, Abu Dhabi’s investment strategy ensures that these investments significantly contribute to the socioeconomic landscape.

Falcioni explained that ADIO’s initiatives integrate into a broader strategic vision, one that is aligned with the directives of President His Highness Sheikh Mohamed bin Zayed Al Nahyan. “The vision is clear - our economic development must be sustainable and diversified,” Falcioni said, underscoring the commitment to moving beyond the traditional reliance on oil.

This strategic pivot is evidenced by the strong emphasis on sectors that enhance the emirate’s GDP diversification, Falcioni elaborated, adding that 56% of Abu Dhabi’s GDP is now diversified.
Abu Dhabi also focuses on creating a resilient economy that is less susceptible to global price fluctuations, and is more grounded in industries that drive future growth such as technology, healthcare, and education, he added.

At the core of Abu Dhabi’s choice of target sectors is a commitment to creating employment opportunities and enhancing the region’s overall quality of life. “The social advantage and benefit have to be for the whole society, not only for the private investor,” Falcioni said, adding that this approach to investment is about building an ecosystem that supports sustainable growth and community development.

The rise of greenfield projects is another crucial aspect, as they involve constructing new facilities from the ground up. “A recent more updated study for 2023 mentioned that more than 1,284 greenfield projects have been done in the UAE and 176 in Abu Dhabi.”

“With a 36% increase in projects year over year, Abu Dhabi is positioning itself at the forefront of attracting global investments,” he added.

What’s Next for ADIO

As Abu Dhabi continues to ascend in the global investment landscape, the future strategies of ADIO are geared towards not only maintaining this growth, but accelerating it.

“We are driven not by the pursuit of numbers alone but by our commitment to the satisfaction and success of investors choosing Abu Dhabi,” Falcioni emphasised, reflecting a strategic depth that seeks to enhance the quality and impact of investments.

One of the most striking targets set by the UAE, and supported by ADIO, is to reach $150 billion in foreign direct investments by 2031, with Abu Dhabi leading the drive.

“We would like to achieve $150 billion in terms of FDI attraction in the UAE, with Abu Dhabi having a key role. Up until today, we have $22.4 billion,” Falcioni said.

To achieve this, ADIO is focusing on expanding its influence across 13 priority sectors, which include the newly formed SAVI cluster, along with other sectors like chemical, renewable energy, healthcare, retail, and agritech.

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