DIC: The ‘Ideas Oasis’ becomes a global talent epicenterCommitted policy makes the Dubai Internet City a standout for entrepreneurs

2 | DIC: The ‘Ideas Oasis’ becomes a global talent epicenter

When His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced the Dubai Internet City proj-ect in 1999, he envisioned Dubai as an “Ideas Oasis” where businessmen, consultants and service providers would together turn ideas into successful businesses. As a technology cluster, DIC was an experiment that Sheikh Mohammed hoped would set a precedent for the decades to come. “This is Dubai’s future,” he proclaimed.

In 2000, DIC launched with 100 businesses; today, under the guidance of CEO Malek Al Malek, it has become the reigning technology centre in the Middle East, home to more than 1,400 technology companies. These include every major technology multina-tional with a presence in the MENA region, including Google, Siemens, Cisco, Intel, GE, IBM, Facebook and LinkedIn; Twitter is rumoured to be opening an office this year.

DIC is also home to the headquarters of several of the Middle East’s most famous technology start-ups, including the myriad properties of Jabbar Internet Group, which formed in the wake of Yahoo’s acquisition of Maktoob in 2009—the $165m acquisi-tion that launched an industry. Jabbar has since spun off Souq.com, now the largest e-commerce company in the Middle East, valued at $500m; it is also registered in Dubai Internet City.

DIC’s success as a technology cluster is bolstered by the city’s unique position as, in air-travel terms, the most connected city in the world and one of its most diverse and by its 78% smartphone penetra-tion rate. This and recent economic growth have galvanised not only DIC but its parent company, TE-COM, which has welcomed 800 new business part-ners over the past year, bringing its total to 4,650.

DIC’s appeal is also due to policies. As a free zone, one of more than 200 in Dubai, DIC allows compa-nies to be 100% expatriate-owned while remaining exempt from both corporate and income taxes.

However, what really sets Dubai Internet City apart, both as a free zone in Dubai and as a global technology hub, are its unique support mechanisms. These have attracted foreign technology talent and enabled start-up creation, but perhaps just as signifi-cant, they provide the framework to support lasting appeal and possibility.

While technology hubs like Silicon Valley and Kendall Square in Cambridge, Massa-chusetts, sprouted up in symbiosis with Stanford University and MIT, respectively, DIC’s primary start-up hub, In5, is a government initiative that has attracted technol-ogy talent from abroad and from corporations thanks to its supportive policies. This commitment to fostering a supportive community has given DIC an egalitarian charac-ter and an enviable openness, both of which are decisive to its success stories.

However, what really sets Dubai Internet City apart...are its unique support mechanisms.

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In5’s humble tan bungalow, tucked away in DIC’s Knowledge Village, has been the birthplace of some of Dubai’s most famous technology start-ups thanks to the train-ing, mentorship, networking, incorporation and funding that it offers. Of these five pillars, entrepreneurs cite the last two as the most critical—without financial support and reductions in set-up costs, many would never be able to make the leap from idea to business that Sheikh Mohammed envisioned.

“When I incorporated in Dubai Internet City in May 2013, all of the existing alternatives to DIC at that time would have cost me over one hundred thousand dirhams [around $27,000],” recalls Alborz Toofani, the Iranian-German founder of SnappCard, a digital loyalty programme that has become one of the most successful of In5’s 56 graduates.

In5 further reduced set-up rates from16,000 dirhams ($4,300) to 1,000 dirhams, and the cost of a visa from 4,500 dirhams to 1,500 dirhams at the time. For the 10-15 companies that are accepted into In5’s competitive programme each year, “it costs almost nothing to incorporate”, Mr Toofani says.

Mr Toofani came to Dubai from Cologne expressly to launch SnappCard. Cologne may be a booming start-up hub in its own right, but, says Mr Toofani, “Dubai has a huge merchant density—this was the most important factor for us. That, its high smartphone penetration rate and the combination of low taxes convinced me to try it”.

Today, SnappCard has raised more than $900,000 from angel and institutional investors, has part-nered with more than 400 merchants across the UAE, Turkey Germany and Bahrain, is cash-flow positive and is scaling from 9 to 20 employees. Mr Toofani, who entered the market knowing “only one friend”, is now a jovial and prolific mentor who sup-ports younger start-ups at In5.

In5’s unique appeal is that it unites the entire community—corporates, start-ups, men-tors, investors, policymakers and media—in creating the kind of collisions that give rise to new ideas. Yet its benefit to the community doesn’t end with its start-up sup-port and its hackathons. On the top floor of In5 sits an even more experimental space: The Assembly, a maker space and smart lab for Internet of Things and hardware entrepreneurs. Launched this May, The Assembly cultivates its growing community of a few hundred makers with technology access, technology kits, in-house 3D printers and workshops on topics ranging from computer vision and gesture control to drone creation and intelligent homes.

The Assembly’s ultimate goal is to transform current mindsets. “At this point, people don’t think that they can create devices, intelligence or IP or even find a solution to a

Dubai has a huge merchant density—this was the most important factor for us.— Alborz Toofani, SnappCard

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problem,” says founder Prashant K. (PK) Gulati, who also sits on the steering commit-tee of In5 and invests in early-stage start-ups via his fund, Smartstart Fund. “People tend to look at software because it’s easy, but we give them the skills to build more innovation-based ventures.”

This ambition to foster a maker mentality is made possible by DIC, says Mr Gulati. Pri-or to the formation of In5, he says, “It was very difficult to create an umbrella organi-sation that would allow people to survive financially while they experimented to see if a particular idea was worth investing in”.

Today, he says, “There are hundreds of stories of people who came here initially with a large company and ended up creating start-ups, working with start-ups or experi-menting one way or the other.”

Now, under the UAE’s National Innovation Strategy, Sheikh Mohammed aspires to make Dubai one of the most innovative cities in the world. With an announcement earlier this year of Dubai’s commitment of 4.5bn dirhams for new innovation pro-grammes in TECOM, and the creation of a 1.6msq-ft innovation hub designed to house around 15,000 knowledge and creative workers, Dubai Internet City is set to boom.

In a sense, that DIC is still in its early days counts among the cluster’s most signifi-cant offerings for business. With support for experimentation, conducive policies and infrastructure, and a steady vision towards enabling foreigners to own and scale their ideas, DIC’s “Ideas Oasis” is on track to become a global technology talent epicenter.