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INTERNSHIP REPORT

PROMOTION OF ITC IN DUBAI

DUBAI ECONOMIC DEVELOPMENT CORPORATION

SUBMITTED BY:

ANKIT TEOTIA

SMBA-08284

INSTITUTE OF MANAGEMENT TECHNOLOGY, DUBAI

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ACKNOWLEDGEMENT

It is an honour to acknowledge all the great people

who have helped me during my internship period and without whom my training would
not have been a great success.

I thank Dr. Ashraf

Dr.Waheed, my internship dean &

Dr. T.P.Ghosh, my supervisor, who stood

by my side in all the challenges that

came my way.

I extend my heart full greetings to them.

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EXECUTIVE SUMMARY

ICT is a revolution for 21st century!

This project was an eye opener. This project highlights the importance of communication
and technology in today’s world, including the UAE. It tells about availability of various
technologies providing the facility of ICT, along with its ranking, it also tells us about the
Market sophistication and Venture Capital availability, Legal Regulations etc. Also it
throws light on government policies which are very stringent providing friction in the
smooth development of countries’ economies and also the advantages and limitations
which countries offer in ICT development. But to analyze as a whole, ICT is a boon for
the present and future!
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UNITED ARAB EMIRATES

Figure 1: UAE tops list of ICT development in Arab World

The United Arab Emirates and Bahrain top the list of Arab States, with Russia and
Belarus leading ICT development in the CIS, the International Telecommunication Union
(ITU) says in its measuring the Information Society 2010 report.

Topping the list of Arab States, the United Arab Emirates (ranked 23th overall) is said
to have "experienced a large value increase as a result of strong performance in both ICT
access and use. Furthermore, it was the first country to surpass the 200 percent mobile
cellular penetration mark in 2008."

The report adds that growth in the UAE ICT market has partly been driven by strong
demand for ICT products, with household access to ICTs and the number of internet
users per 100 inhabitants increasing significantly between 2007 and 2008.The UAE was
also identified as one of the top ten economies with the "lowest relative prices for
fixed lines" along with Belarus, Singapore, Iran, Kuwait, the Republic of Korea and
the United States.

The United Arab Emirates improves four positions to 23rd place, overtaking for the
first time traditional best regional performer Israel (28th).The country’s impressive
performance in recent years has been driven by a strong and consistent government
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focus on ICT (2nd and 29th for government readiness and usage, respectively) as a key
factor for its vision for the future (2nd).The government has not only been quite
successful in promoting ICT diffusion (2nd), but is widely using it to improve its
efficiency (2nd), albeit government online services and e-participation remain low (91st

and 77th, respectively). Among the country’s many other strengths, one can cite its
outstanding individual preparation and ICT usage (5th and 29th, respectively) together
with its ICT-conducive market environment (12th).

Thirty years ago the UAE was one of the least developed countries of the world. Today,

it has achieved an income level comparable to that of the industrialized nations. The UAE
did not pass through the hypothetical development ‘stages’ that most developed countries
seem to have experienced. Rather, its large oil revenues have allowed her to leap these
stages to the stage of high mass consumption. Massive oil revenues have enabled the
UAE to short-cut the usually difficult and lengthy process of saving and capital
accumulation necessary for economic development. Given an abundance of natural
resource endowments (oil and gas), the UAE has embraced resource-based industries
(RBI) as a development strategy, an industrial strategy that is based on utilization of
natural resources. There has been a deployment of windfall income, largely directed at a
‘once-and-for-all’ boost to the social and economic infrastructure, which enabled the
UAE to achieve a significant degree of economic development within the very brief
timeframe of 1973 to 1982, a period of relatively high oil prices.

Menasa is Middle East North Africa South Asia and its 22 countries. We're seeing the
economic power in this post-credit crisis period shift towards east, and for Middle East
generally, and GCC, specifically, neighbouring South Asia, the historical link to India,
Pakistan, Sri Lanka is a natural, considering the following associations that have existed
for centuries:

• Interaction of labour from South Asia to the Mena region

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• Coastal trade routes resulting in transference of common cultural and religious

trait
• Education, where citizens of the Gulf have been to India for higher education

Markets like Pakistan, Bangladesh, India and Sri Lanka present interesting investment
opportunities, as can absorb liquidity inflows on infrastructure projects that have
meaningful GDP growth.

In addition, South Asia has a natural pool of both skilled and unskilled labour that can
form the basis of investment interaction between capital rich Gulf and population rich
South Asia.

Below is the list of graphs which shows the ranking of United Arab Emirates in
various aspects of ICT development in a country. The ranking shows how far or
how much ahead is UAE with respect to other ICT leaders and on what aspect
should UAE work to surpass all the countries to become the leader of all in terms of
ICT and economic growth wise also as economic growth is directly proportional to
the ICT development in a country.

• Availability Of Latest Technologies

To what extent are the latest technologies available in your country? (1 = not available; 7
= widely available) | 2008–2009 weighted average

Figure 2: Availability of latest technologies wise ranking

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• Financial Market Sophistication

How would you assess the level of sophistication of financial markets in your country? (1
= poor by international standards; 7 = excellent by international standards) | 2008–2009
weighted average

Figure 3: Financial Market Sophistication wise ranking

• Venture Capital Availability

In your country, how easy is it for entrepreneurs with innovative but risky projects to find
venture capital? (1 = very difficult; 7 = very easy) | 2008–2009 weighted average
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Figure 4: Venture Capital Availability wise ranking

• State Of Cluster Development

In your country’s economy, how prevalent are well-developed and deep clusters? (1 =
nonexistent; 7 = widespread in many fields) | 2008–2009 weighted average

Figure 5: State of Cluster wise ranking

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• Burden Of Government Regulation

How burdensome is it for businesses in your country to comply with governmental

administrative requirements (e.g., permits, regulations, reporting)? (1 = extremely
burdensome; 7 = not burdensome at all) | 2008–2009 weighted average

Figure 6: Burden of Government Regulation wise ranking

• Efficiency Of Legal Framework In Settling Disputes

How efficient is the legal framework in your country for private businesses to settle
disputes? (1 = extremely inefficient; 7 = highly efficient) |2008–2009 weighted average

Figure 7: Efficiency of legal framework wise ranking

• Availability Of Scientists And Engineers

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To what extent are scientists and engineers available in your country? (1 = not at all; 7 =
widely available) | 2008–2009 weighted average

Figure 8: Availability of Scientists and engineers wise ranking

• Quality Of The Educational System

How well does the educational system in your country meet the needs of a competitive
economy? (1 = not well at all; 7 = very well) | 2008–2009 weighted average
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Figure 9: Quality of education wise ranking

• Company Spending On R&D

To what extent do companies in your country spend on research and development

(R&D)? (1 = do not spend on R&D; 7 = spend heavily on R&D) |2008–2009 weighted
average
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Figure 10: Expenditure on R&D wise ranking

• Government Prioritization Of ICT

How much priority does the government in your country place on information and
communication technologies? (1 = weak priority; 7 = high priority) | 2008–2009
weighted average

Figure 11: Government prioritization of ICT wise ranking

• Government Procurement Of Advanced Technology Products

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Do government procurement decisions foster technology innovation in your country? (1

= no, not at all; 7 = yes, extremely effectively) |2008–2009 weighted average

Figure 12: Government procurement of advanced technology products wise

ranking

• Government Success In ICT Promotion

How successful is the government in promoting the use of information and

communication technologies in your country? (1 = not successful at all; 7 = extremely
successful) | 2008–2009 weighted average

Figure 13: Government success in ICT promotion wise ranking

Also,

• In terms of Time required to start a business (hard

data), UAE ranks 52 with New Zealand at number 1, then Australia, then Georgia
and Singapore. Saudi Arabia placed at number 8, Turkey and United States at number
12.
• In terms of Judicial independence, UAE stands at number
32 with New Zealand at number one followed by Sweden and then Denmark and then
Finland.
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• In terms of Time to enforce a contract (hard data), UAE

is place at number 62 with Singapore and New Zealand as forerunners

All the data above shows that even though UAE holds a good position in terms of
readiness to ICT development with Developed ICT infrastructure and strong Government
support for ICT but UAE lacks somewhere in the proper usage of the deployed ICT
infrastructure. There is lack of scientists and engineers. There is resistance in the move
for Research and Development. Some government policies are very stringent providing
friction in the smooth development of country’s economy.

Below are the advantages of UAE and some limitations which country offer in ICT
development.

ADVANTAGES:

• Strong Government Support Through Policy And

Funding

• A foreign investment law is created to establish rules to

encourage foreign investment, allowing better and increased inflow of foreign
capital and protecting the rights and property of foreign investors

• The government has also supported ICT development in

the country through both investments in education and infrastructure

• Tax free city. No tax is imposed on all scopes

(Services, import or export and it is very convenient for all business communities
to operate form Dubai as there is no tax hassles.)

• The Government of Dubai has invested in providing

more facilities to the people living in here by modifying their system of
transportation such as metro, bridges, highways and water bus
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• Expatriates are more than the origins of this country

therefore the expenses of the government of U.A.E are much lesser. As the
foreigners are more in population in U.A.E. most of the income which they earn
will be expensed through investment with high return back of capital

• Cutting Edge ICT Infrastructure For The Region

• Dubai Silicon Oasis – purpose-built high-technology

Park for the microelectronics and the semiconductor industry.

• The Jebel Ali Free Trade Zone- the 5th largest in the
world has attracted over 900 international companies that include giants- a few of
these are General Motors, AEG, Aiwa, BP, Ciba, Geigy, Daewoo and Heinz

• Dubai Technology E-Commerce & Media Freezone

(TECOM) –has the largest IT base in the region. Today it includes companies like
Microsoft, Oracle, HP, and Cisco.

• Zayed University – the first electronic governmental

university in the region. The University is a women only university

• Talented Ict Workforce

• Geographic Location

• A major outsourcing force, particularly for the West

• Main gate and centre for economic activities in the

Middle East. (Most of the imports and exports for any country in Middle East are
operated through Dubai’s ports)

• Internet Governance

• The increase in bandwidth and the upgrade of

equipments which have warranted such significant investments in infrastructure
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have been done with a view to ensure an unmatched quality of service and a
world class Internet experience to consumers in the UAE.

• Access To Information And Knowledge

• The UAE government is strongly committed to raising

people awareness of the benefits of information and communication technologies,
and of giving access to all people to information and knowledge almost
instantaneously

• A prime indicator of the movement towards an

information/knowledge society is the information society index (ISI). the World
Times/IDC ISI ranks the UAE 32nd

• The e-Library22 is a government supported imitative

whereby its services are provided through collaboration between Dubai
eGovernment and Dubai Municipality – Public Libraries section

Strategies for sustained ICT growth in UAE

• What are the greatest challenges to a country’s ability to

innovate?
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Figure 14: Challenges to a country to innovate

• Which Arab country has the greatest potential for

becoming the innovation hub for the region?

Figure 15: List of Arab Countries with potential for becoming innovation
hub.
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Which industry sector has the highest level of innovation in the Arab world?

Figure 16: Graph showing which sector has highest level of innovation

The United Arab Emirates has combined innovative government policies and the
forces of petro-dollars to redefine its economic landscape. The country’s per capita
income is on par with those of leading Western European nations. Certain
observable parameters indicate that the country has a great potential for becoming
a top-notch knowledge-based economy stimulated and energized by a host of
innovative initiatives and programs; public- and private-sector entities in the United
Arab Emirates have started their journey of focusing on innovation as a driver for further
development and growth. Supportive market mechanisms and policies are fueling the
innovation wheel.

Currently the country enjoys high levels of broadband Internet penetration,

particularly in Dubai (64 percent) and a high mobile telephony penetration rate (close to
100 percent). The country is significant today as a business, technology, education and
health-care hub in the region. Responding to the rapidly growing importance of the
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United Arab Emirates and riding the wave of innovation in this market, many global
corporations are establishing “innovation centers” in that country. One such facility
was established by Bayer Material Science AG in November, 2006—this is the first
development center for high-quality polymer materials in the region to have access
to a wide range of options for technical service, the development of new
applications, and training for customers and employees. The Dubai e-government
initiative is an integral component of Dubai Vision 2010, which aims to establish
Dubai as a knowledge-based economy by leveraging tourism, IT, media, trade, and
services as pivotal industries in an effort to move away from dependence on oil related
products. The Dubai e-government initiative aims to improve and innovate in
government services by using technology as a key enabler for a customer-centric
approach to providing government services

The first of the technology-intensive innovation initiatives in the United Arab Emirates
was Dubai Media City (DMC), launched in November 2000. Next to DMC are Dubai
Internet City (DIC) and Knowledge Village. The major goal of the multibillion dollar
DMC, DIC, and Knowledge Village complex is to create a cluster of innovation
comprising educators, incubators, logistic companies, multimedia businesses,
telecommunications companies, remote service providers, software developers, and
venture capitalists in one place. DIC is the region’s first technology-innovation zone and
is viewed by decision makers in this country as an economic driver not only of Dubai’s
economy, but also of the United Arab Emirates as a whole. Knowledge Village is located
in the Dubai Technology and Media Free Zone with DIC and DMC. By being in the
high-tech corridor, Knowledge Village offers its partners the prospect of forging
partnerships with the business community and creating a vibrant learning and innovation
environment. Currently, Knowledge Village has more than 70 educational and research
institutions as partners.

Also worth mentioning is Dubai Silicon Oasis (DSO), which is intended to be one of
the world’s leading high-technology parks for the semiconductor and
microelectronics industry. DSO is an innovation-driven technology community,
housing microelectronics- and optoelectronics-related enterprises, a state-of-the-art
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microelectronics innovation center (MIC), fabrication plants, research and development

centers, and specialized academic institutions and residential areas.

What Dubai is good in?

Many international businesses which are interested in developing their market in the
Middle East have been lured by some attractive features offered by Dubai. The sheer size
of the market in Dubai has been increasing at a steady pace. Although the United Arab
Emirates has a relatively smaller population than other Middle East countries, its total
imports have been registering a steady growth with the passing of each year. The
impressive performance can be attributed to the fact that Dubai has emerged as the
major re-export centre for the entire Middle East region.

Distribution hub of the Middle East:

Dubai's non-oil imports have been growing by leaps and bounds since early 80's. These
figures are certain to gain further momentum in the coming years as many of the
economies of the region (which are being serviced by Dubai) are still at a relatively early
stage of development. As a result, there is plenty of long-term scope for diversification
and expansion. As a major supplier of goods to such emerging markets as India, the CIS,
Central Asia and Africa, Dubai is well poised to further strengthen its status as the
distribution hub of the Middle East.

As one of the most active and outgoing markets in the region, Dubai has the
potential to promote almost any type of goods and services. In a regional context,
Dubai has been playing an important role catering to the increasing demand for
foodstuff, high technology equipment and luxury products in the small but
prosperous Gulf countries. In addition to inter-Gulf trade, Dubai also reaches an
"outlying ring" of huge markets including East African countries, the CIS, Iran and
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the Indian sub-continent. Therefore, by establishing a base in Dubai, international

businessmen, manufacturers and exporters of less sophisticated equipment and
mass consumer products can also successfully find readily available buyers for their
goods.

Business centre of the Middle East:

The absence of any foreign exchange controls, quotas or trade barriers makes Dubai one
the most attractive trading posts in the region. The fact that import duties are extremely
low, and that many products are exempt, further adds to the status of Dubai as the
business centre of the Middle East. As a further incentive, businessmen will be impressed
by the Emirate's efficient transport and telecommunications infrastructure - an absolute
must in today's fast moving corporate world. Dubai's ports, considered to be one of the
best in the world, are served by more than 100 shipping lines. And the Dubai
International Airport, which will soon undergo a major expansion project, is served by
over 70 airlines at present.

Yet, one of the most unique features of Dubai is its ability to conduct international
business with a local flavor. Foreign businessmen are often impressed by Dubai-based
entrepreneurs who are able to blend their local and regional expertise with a full
understanding of international business practices.

Modern Infrastructure

The UAE has a fairly well developed and modern infrastructure. Land transportation is
by road. A concrete road network links all main cities. Authorities in Abu Dhabi and
Dubai are busily engaged in widening existing roads and upgrading the Abu Dhabi-Dubai
highway. There is no rail system in the UAE, nor any domestic air transportation
network, despite the fact that five of the seven emirates have modern airports. All the
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emirates have modern seaports. The port of Jebel Ali in Dubai is the largest manmade
port in the world.

As part of its drive to diversify its economy away from oil to regional trade, Dubai has
developed two seaports and its airport to handle re-exports cargo with considerable
expertise and precision. Given that international shippers operating between Europe and
the Far East prefer to make only one stop in the Gulf, Dubai has managed to secure the
lion's share of the business of unloading, breaking down, and reloading cargo for onward
shipment. Dubai's physical facilities and sheer expertise in this area make its ports the
preferred stops for most shippers on these routes.

Dubai aggressively seeks out new re-export markets, and it has developed trade ties with
the newly independent Central Asian states of the former Soviet Union and South Africa.
Cargo unloaded at Dubai and ferried across the Gulf to Iranian ports is then brought to
markets in central Asia via Iranian road and rail lines. Dubai’s cargo village at its
international airport handles more air cargo than any other airport in the region, much of
it coming into Dubai by sea from the Far East or the subcontinent and then going out by
air to Europe.

Free Trade Zones

There are several free zones operating in the UAE and more are planned. Since
UAE tariffs are low and are not levied against most imports, the chief attraction of
the free zones is the waiver of the requirement for majority local ownership. In the
free zones, foreigners may own up to 100 per cent of the equity in an enterprise. The
largest and most successful of the free zones is the Jebel Ali Free Zone (JAFZ) in
Dubai. Each free zone offers special incentives to attract tenants, such as no taxation
for many years, subsidized energy rates, and full repatriation of capital and profits. In
addition, for a nominal fee the zone authorities provide significant support services, such
as sponsorship, worker housing, dining facilities, recruitment, and security.
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Shopping Paradise

Dubai offers the visitor a fascinating kaleidoscope of contrasts a distinctive blend of

modern city and timeless desert, east and west, old and new. An exotic destination with a
cosmopolitan lifestyle, Dubai combines the comfort and convenience of the western
world with the unique charm and hospitality of Arabia.

The city offers superb facilities for sport and recreation, from golf and water sports to
desert safaris and dhow cruises. Or simply the opportunity to relax and enjoy year-round
sunshine on clean, uncrowded beaches.

Dubai is known as a shoppers' paradise. Gold, jewellery, designer clothes, cameras,

electronics, oriental rugs - whatever your taste, you'll find it here. From ancient souks to
luxurious shopping malls, the visitor can count on bargains galore. Dubai's culture firmly
rooted in the Islamic traditions of Arabia courtesy and hospitality are among the most
highly prized virtues. You are sure to be charmed by the genuine warmth and friendliness
that greets the visitors.

Impact and Strategies of ICT development on Digital Divide

• A visitor to the Middle East’s Western Asian region will

quickly see vast differences between and within each state. All these countries
confront divides—in demographic, economic, social, educational, and natural
resource arenas

• The Arab region invests 0.2 percent of GDP in RDI

(research, development, and innovation); global developing country estimates are 1.6
percent. Developed countries average 2.5 percent of GDP

• The UAE Electronic Transaction and Commerce Law

combined the United Nations guidelines with local qualifications. The United Arab
Emirates also passed a Cyber Crime Law to fight misuse of cyberspace and new
technologies.
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• A scarcity of Arabic digital content on the Web further

diminishes the average user’s perceived need to acquire a computer. While the
world’s Arabic speakers number 300 million, Arabic Web pages represented
only 0.2 percent of total Web pages in 2006, or an estimated 100 million pages
compared with approximately 40 billion pages in all other languages

• Policy recommendations to promote innovation: As

Middle Eastern policymakers consider how to position and prepare their countries for
the future, it is especially important that they consider the process to assess and
implement innovations. Technology is evolving at ever more rapid rates and decisions
cannot be deferred in the hope that a new more powerful or cheaper technology will
make decisions easier.

• Encourage innovation in small- and medium-sized

enterprises: SMEs comprise the greatest number of service companies and they
employ the largest total numbers of employees in the region. Because of their
aggregate prominence, technology take-up among SMEs could bring substantial
economic benefits to Middle Eastern countries, provided SMEs can adapt and
innovate in their business practices to capture productivity improvements.

• ICT-related financial incentives: Research and

development (R&D) in technology-related services and innovative business practices
should enjoy R&D tax credits, especially as services command such a large amount
of Middle Eastern economic activity. While these R&D tax credits would also benefit
large companies, they would encourage SMEs to experiment with introducing new
business practices using technology and innovative processes. Tax credits could also
be introduced for businesses to purchase computers and software.

• Public awareness: The government should invest in

publicity campaigns and organize technology resource centers in business districts to
inform and educate SME owners about the innovative potential of new technologies.
Financial incentives to encourage SME owners to assess technology options could be
offered, for example, by issuing consultancy vouchers.
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• Private funding guarantees: Governments can develop

loan guarantee schemes, as have been applied in Europe, to encourage private lenders
to finance technology investments. However, as Middle Eastern debt markets tend to
favor funding working capital, this approach may appeal more to foreign lenders and
financial intermediaries than to domestic businesses.

• Innovate by sharing best practices: The Middle East is

home to several innovative initiatives that could serve as models for best regional
practices, and possibly extend to other forms of cooperation and mutually beneficial
endeavors. For example, Egypt, Jordan, Saudi Arabia, and Syria have recently
introduced programs to promote family-owned computers through different types of
government-supported financing plans. Foreign technology manufacturers, such as
Hewlett Packard and Acer, are beginning to invest in the region, constructing new
plants in Saudi Arabia. Innovation parks, clusters, and free trade zones, encouraged
and fostered by different types of financial and regulatory incentives, have appeared
throughout the Middle East. Information about, and access to governmental programs
have been priorities for many countries, and e-government programs hold great
promise for advancing the sharing of best practices.

The excel sheet embedded below shows the general contrast between different
countries and analysis of where UAE is lacking and where it has excelled. The in-
depth analysis of this sheet can provide the good understanding of the field where
UAE should work to emerge as an ICT leader and what it can offer to the rest of the
world to promote ICT in UAE.

Comparison.xls

The Middle East is home to several innovative initiatives that could serve as models for
best regional practices, and possibly extend to other forms of cooperation and mutually
beneficial endeavors. For example, Egypt, Jordan, Saudi Arabia, and Syria have recently
introduced programs to promote family-owned computers through different types of
government-supported financing.
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Since 2000 most Middle Eastern countries have made substantial progress designing
strategies to integrate and weave the new strands of the information society into
traditional social, economic, and cultural patterns. These strategies have begun to yield
results. Most countries have seen a surge of mobile telephone use. Increases in Internet
access considerably outpaced world average growth.

If policymakers are to leverage these encouraging developments into innovation and

faster progress, they should refine the process to prioritize, implement, and monitor
initiatives. The process will also be substantially more robust, innovative, and versatile if
more initiatives can include new models of public-private partnerships and regional
associations. For in the Middle East, policy will likely play a greater role than technology
in setting the pace for how innovation evolves. This is because access to technology is
not the bottleneck in many parts of the Middle East, but creating the overall
environmental conditions for innovation to thrive remains an ongoing challenge, even in
the more developed economies of the region. A top policy priority should be to develop
ways to encourage SMEs to invest in technology and innovative business processes,
because the wider economic and social benefits could be substantial. Nurturing and
Promoting Technology and Innovation supporting the formation of an Arab software
industry is a most necessary parallel policy initiative to help SMEs maximize the ways
technology could potentially stimulate innovative and more productive business
activities.

Keeping in view all these points, Dubai can surpass all countries in MENASA as well
as the leaders of ICT in the world.

THANK YOU
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