The Emirates leads the Arab world as an ecosystem for new emerging companies

The United Arab Emirates (UAE) ranks first in the Arab world in the ranking of destinations for new emerging companies, according to the global rankings for 2020 prepared by the company StartupBlink, which includes 100 countries and 1,000 cities.

Emirates ranked 43rd in the world according to the registration of StartupBlink, a research entity based in Zurich and specialized in the analysis of ecosystems for startups or emerging innovative companies. The UAE ranked first as the best environment for emerging incubator companies in the Arab world, followed by Bahrain, which ranked second in the Gulf. Riyadh, the capital of the Kingdom of Saudi Arabia, rose more than 213 places to 281 worldwide in the ranking of 1,000 cosmopolitan cities. 

The UAE and Bahrain have thus been ranked among the top 100 destinations for new businesses worldwide, according to the new StartupBlink study. The research firm's annual StartupBlink Ecosystem Ranking Report calculates a score for each country based on tens of thousands of data points collected from more than 50,000 members working as venture capitalists, founders and employees of small businesses. In this year's ranking, the United Arab Emirates ranked 43rd, while Bahrain jumped 20 places to 75th; ranked first and second respectively within the Gulf Cooperation Council (GCC) group of countries.

The United Arab Emirates was highlighted in the study for the potential of its Arabic-speaking market and the close involvement of the Executive in the local start-up ecosystem. "Dubai is now the undisputed technology leader in the Arab world, becoming a popular relocation destination for Arab entrepreneurs across the Middle East," the report said.

"Considering the size of the Arab-speaking market, the potential is high; continued government reforms can provide the much-needed legal and financial infrastructure, with laws that favor entrepreneurs and a banking system that supports innovation," the study added.

The report also praised Bahrain's "collaborative community of startups" and the "framework of legal and support systems for startups and entrepreneurs. Initiatives such as StartUp Bahrain, Tamkeen and Bahrain FinTech Bay were also highlighted, as well as favorable fiscal conditions and recent investment records.

The published research also mentioned several Bahrain-based startups such as Rain, the first licensed crypto-currency platform, and Skiplino, a cloud-based queue management system that allows companies to intelligently manage social distancing during the COVID-19 pandemic.

For its 2020 ranking, StartupBlink has used an algorithm developed over the past five years that favors a more complete record on emerging business environments around the world; and the results consist of a variety of sources, where the company's algorithm has taken into account a geographic database that is based on a large multitude of tens of thousands of startups, accelerators and workcenters, among others. 

Incubation environments for new businesses are essential for creating jobs, boosting the economy, increasing tax revenues, improving quality of life, developing innovation, and attracting and retaining talent. In this ecosystem, entrepreneurs get the right place to start their new businesses with a strong foundation for success. 

The report reaffirmed that "it is important to monitor the level of performance of the work environment for emerging businesses, as companies use these qualifications to improve decision-making regarding future expansion, while universities and consulting agencies use them for research purposes, and governments and local development organizations use them to measure the level of success of their programs. 

Notably, a new record was set last year with 564 investments in start-ups in the Middle East and North Africa, and the value of those investments amounted to $704 million, compared to 294 deals in 2015, according to a report by the consulting firm Magnet Company.

The report also indicated that the number of agreements increased by 31%, and the value of total funding grew by 12% compared to 2018. In addition, it noted that last year represented a major milestone, as total financing increased at a 47% compound annual rate, and transactions increased at a 60% compound annual rate over the last decade.

The report indicated that one of the main drivers of this increase is government support, as in recent years Gulf Cooperation Council governments have increasingly focused on entrepreneurship and new businesses through the launch of funds, matching programs, accelerators, emerging project licenses, investment companies and many other initiatives. 

Commenting on the StartupBlink report, Eli David, CEO of the entity, noted that "good startup ecosystems are critical, creating jobs, boosting the economy, increasing tax revenues, improving quality of life and urban innovation, and attracting and retaining talent. "As an entrepreneur, location will greatly influence the chances of a successful startup," he explained.

"Knowing how well your ecosystem works is also important. Corporations use these rankings to make decisions about future expansion, universities and consulting agencies use them for research, and governments and local development organizations use them to evaluate how well their programs are working," Eli David noted.  "The efforts of governments, municipalities and development organizations make a real difference. Knowing this information and measuring it mathematically helps track real progress and creates an urgency to encourage improvement," he said.

Pakiza Abdul Rahman, manager of new businesses at the Bahrain Economic Development Board, said: "Choosing a starting location is one of the most important choices an entrepreneur can make, affecting everything from tax levels to market access and the cost of doing business. "Emerging businesses coming to Bahrain join a thriving ecosystem that combines pro-business regulation with competitive costs, benefit from a comprehensive support environment that combines legislation and policies that support emerging projects, backed by the support of a listening government, all with the market that represents the GCC space, valued at $1.5 trillion," he said.

"We are delighted that Bahrain's approach, and that of the wider Arab region, continues to gain recognition and look forward to enhancing our support for the new businesses of tomorrow and today," he said. Bahrain offers new businesses an ideal location for new ideas, combining pro-business government policies with a constantly evolving ecosystem and a large pool of international talent.