ABU DHABI: The Abu Dhabi government has just launched a Dh1 billion mega hub that seeks to accelerate the local economy by bringing together start-ups, innovators and global powerhouses in the technology industry.
U.S. tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Branded as “Hub 71” and with an investment of Dh1 billion, the new initiative is being launched under the aegis of His Highness Shaikh Khalid bin Zayed Al Nahyan, member of the Abu Dhabi Executive Council and chairman of the executive committee.
Abu Dhabi derives about 50 percent of its real gross domestic product and about 90% of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a 50 billion dirham ($13.6 billion) stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic.
The new initiative, named Hub 71, is linked to Ghadan will also involve the launch of a 500 million dirham fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
LIVE: "ADGM is excited to one of the strategic partners of Hub71 collaborating with Mubadala and global powerhouses to establish an innovative environment to foster the next generation of tech innovators and startups." HE Ahmed Ali Al Sayegh, Chairman of @ADGlobalMarket#Hub71AD pic.twitter.com/Totw9q0JM2
— hub71ad (@hub71ad) March 24, 2019
The tech park is looking to host companies receiving funding and mentorship through the Middle East’s first start-up accelerator specializing in clean technology and sustainability, the Catalyst.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225 billion and a big investor in tech companies, will act as the driver of the hub, located in the emirate’s financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala which has committed $15 billion to the Softbank Vision Fund, plans to launch a $400 million fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the 1 billion dirham commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.
Like Abu Dhabi, Dubai is also eyeing more investments in the technology industry.
The emirate has recently earned the status of being the world’s most popular destination for foreign companies looking to invest in smart technologies.
Between 2015 and 2018 alone, Dubai managed to draw a total of $21.6 billion in foreign direct investments for artificial intelligence and robotics, the highest in the world.