ABU DHABI — The UAE government has reaffirmed its commitment to the small and medium enterprise (SME) sector, framing it as a critical engine for national economic resilience. Speaking at a fireside chat during the Make it in the Emirates 2026 forum, Dr. Ahmad bin Abdullah Belhoul Al Falasi, Minister of Sports and Chairman of the Emirates Growth Fund, emphasized that the government is "doubling down" on its support for small businesses through a combination of patient equity and direct market access.
Despite the introduction of corporate taxes and regional geopolitical headwinds, Al Falasi pushed back against the narrative of government withdrawal. "Nothing beats access to market," he noted, underscoring that sustainable growth for SMEs requires long-term structural integration rather than temporary subsidies.
Closing the "Missing Middle" with the Emirates Growth Fund
The Emirates Growth Fund has emerged as a vital vehicle for addressing the financing gap faced by companies that have outgrown early-stage venture capital but require significant investment to scale.
- Investment Strategy: The fund takes minority stakes ranging from 20% to 49%, allowing founders to retain operational control while benefiting from institutional governance and global expertise.
- Sector Focus: With Dh1 billion in equity currently being deployed, the fund prioritizes high-impact sectors including manufacturing, healthcare, food security, and advanced technology.
- High Demand: Following recent expansion announcements, the fund has seen nearly ten times the anticipated interest from local enterprises seeking to move toward institutionalized business models.
Navigating Regional Risk with Local Capital
Addressing investor concerns regarding regional stability, Al Falasi argued that the perceived risk often exceeds the actual risk on the ground. He highlighted the unique advantage of local capital:
- Precision Pricing: Unlike international investors who may price risk broadly at a regional level, the Emirates Growth Fund utilizes deep local market knowledge to apply more precise risk calculations.
- Absorbing Pressure: Access to government-backed equity provides SMEs with a competitive alternative to international capital, helping them absorb rising operational costs more effectively.
Government as a Strategic Purchaser: The "Local+" Initiative
A significant shift in strategy involves the government's role as a major buyer. At the concurrent Make it with ADNOC forum, ADNOC unveiled projects valued at Dh200 billion over the next two years.
A central component of this procurement drive is the "Local+" initiative, which bridges the gap between major contractors and domestic industry:
- Direct Connection: The program connects major Engineering, Procurement, and Construction (EPC) contractors with a qualified list of 70 UAE manufacturers.
- Sovereign Supply Chains: The move to prioritize local sourcing was accelerated by pandemic-era lessons on supply chain vulnerability, leading to a concerted effort to localize production in defense, healthcare, and essential services.
A Distinct Industrial Ecosystem
Al Falasi distinguished the UAE's investment landscape from regional models by pointing to its diversity. The ecosystem is characterized by a "complementary" network of funds—ranging from passive sovereign wealth funds to active vehicles like the Emirates Growth Fund, Mubadala, and ADQ—each serving a specific niche in the market.
"I think what we have is a really healthy landscape of equity being deployed," Al Falasi concluded. "We will be able to weather any challenge that comes."
