Silver Linings: What SMEs In Dubai (Potentially) Stand To Gain From The COVID-19 Crisis
Looking beyond the summer, I'm hoping that we are going to see drastic changes to how we work, how we get paid, and a reduction in bureaucracy that will benefit everyone.
First of all, forgive the headline– I'm not looking to trivialize what's going on right now. I do understand what you all, as entrepreneurs, are going through: I've been a founder myself, and I've poured two years of sweat and tears into an idea. I remember going without a salary on many an occasion, and still believing that my business would work out.
This is what I remember when I see many of my friends who are SME owners and founders in the UAE enduring the worst possible hardships right now. They're doing everything they can do to stay afloat, including cutting costs as much as they feel they can do, and chasing payments.
Short of a bailout, similar to what we've seen in Europe where governments have stepped in with a raft of policies, stimulus packages, and employee payment schemes (I remain hopeful that governments in the region will step up and do more, rather than let businesses fail), SME owners must look to themselves right now to survive this crisis.
Looking beyond the summer, I'm hoping that we are going to see drastic changes to how we work, how we get paid, and a reduction in bureaucracy that will benefit everyone. Here's what I mean:
1. The remote working revolution Let's start with the most obvious one. This pandemic has made us all realize that we don't need offices to work out of. All we need is a computer and an internet connection. That's it. This could result not just in employees being able to live wherever they want (and move to cheaper locations), but also companies resizing and reducing their office space. Rent is one of the top two costs when running a business, and this trend toward remote working could result in SMEs being able to drastically reduce their overheads. The challenge here could be how the number of work visas a company is entitled to is often tied to the size of office space rented– free zones and governments will need to rework this policy.
2. A future with less red tape You can show me all the "Ease of Doing Business" reports that you want till you're blue in the face, and I will tell you that there's still too much bureaucracy here. Well, that red tape needs to go. We don't need company stamps or a company card. Given everything is supposedly digitized, should we need to make so many calls to government offices and pay for processing both physical and digital forms? Governments must transition away from their old habits, embrace digital-only services, and reduce costs for us all.
3. Improved cash flow I remember how much time I used to spend chasing on money owed to me, and how little recourse I had besides the constant follow-ups. There's little any of us can do, besides spend days following up via email and phone calls. Governments in the region have promised to take action on late payments from their own entities. But they've got to go a step further, and set up mechanisms that make it easy -and cheap- to follow up on pending payments. Improving cash flows will benefit everyone in the economy, most of all SMEs and their employees.
4. Fairer taxation Muttering the word tax in the UAE often feels like a taboo. And yet every company pays for a whole range of fees and services. Would a corporate tax be fairer, especially if it meant that companies paid proportionately? There's been increasing chatter about the idea of a corporate tax being introduced, and it may be the right way to go if the fees go, and if the tax provides for transparency and fairness based on a company's size and operations.
5. A (real) sense of community This is my last hope, and it's up to SMEs to make this happen. SMEs are the life-blood of the economy. Let's focus on just Dubai, as an example. I'm going to quote a couple of statistics from a 2019 report issued by Dubai SME: SMEs represent 99.2% of the number of establishments in Dubai, they account for 51% of the workforce, and they contribute around 46% of Dubai's GDP. You run this city and this Emirate. Your voice has to be heard loud and clear. You've got to come out of this as one community. Set up associations, organizations, or whatever you want to call them. But come together as one. When you join forces, we all have to listen to you, and help change the economy and the laws so they support your growth.
They're my five cents for today. My hope is that the pain will ease, as we return slowly back to work. And we have to build something better for the economy and for the SMEs that power it. Do let me know your thoughts, and whether you agree, disagree, or see things differently. Let's start a conversation on how business should be for SMEs, once all of this is over.