Nearly one third (30%) of small and medium sized enterprises (SMEs) in the UAE believe that acquiring new customers is their biggest opportunity at the present time, indicating high levels of confidence in the strength of the local economy. This is according to the 2014 Global SME Survey released today by global insurer Zurich, which asked the leaders of 3,800 SMEs across 19 countries, including 200 companies in the UAE, about their business experience during the past 12 months.
The survey found that UAE-based SMEs were more positive than competitors in other countries about the opportunities that exist to reach new consumers. SMEs in the Asia-Pacific region were particularly downbeat about the potential provided by new customer segments (22%) and were found to believe that better prospects existed through the diversification of their range of products or services (29%).
Other perceived opportunities for businesses in the UAE in 2014 were expansion into foreign markets (17%) and improving operating costs (21%), although positively for employees this was down 4% on the 2013 figure while ‘improving the employees pool’ was up 4% on last year. Nearly twice as many SMEs in the UAE believe that changes in legislation or regulation over the last 12 months present an opportunity for their business (11%; 2013: 6%).
According to the UAE’s Ministry of Economy, SMEs are a key driver in the nation’s resurgent economy contributing approximately 60% to non-oil GDP and 86% of private sector employment. The impact of positive developments within the UAE’s financial services sector over the last 12 months is also evident in the 10% of SMEs which feel that attractive credit terms now provide an opportunity for their business, up 4% on last year.
Globally, SMEs believed that they can benefit from leveraging modern technology as both new sales channels (19%), such as web trading, and pioneering electronic devices which can improve efficiency (15%), including mobile and tablet computing, were thought to be positive advancements which could progress their commercial activities. However, UAE SMEs were less encouraged by such technological developments, with only 13% viewing new sales channels as an opportunity and 14% considering new electronic devices a productive aid. In large part, this may be because SME businesses have already adopted such innovative developments.
Commenting on the research, Clint Draper, Head of SME at Zurich Insurance Middle East, said: “There is no doubt that opportunities exist for SMEs in the UAE at the present time. Zurich’s research reveals that SMEs are determined to make best use of current economic conditions to target new customers, grow revenues and increase the size and scale of their business. As these company’s grow, we would expect them to diversify and extend their offering to a wider market by providing a broader range of products or services.”
Draper added: “While it is excellent that many SMEs in the UAE are considering opportunities to develop and grow their business, both domestically and overseas, it is essential that they are doing this from a stable foundation. By managing risks and protecting against potential threats, insurance provides an essential platform from which SMEs can flourish.”