The recently-concluded 'Celebration of Entrepreneurship' marks the latest of a number of initiatives designed to benefit small businesses in Dubai, and demonstrates the supportive stance of the Emirate's authorities towards such enterprises.

According to recent estimates, small and medium-sized enterprises (SMEs) represent in excess of 70% of the MENASA (Middle East, North Africa and South Asia) region's employment, but bring in less than a third (30%) of GDP, making the sector ripe for significant growth.

Drawing in excess of a thousand participants comprising financial providers, key figures from the business community and government, entrepreneurs and other small business people, last week's two day event provided opportunities for networking and workshops, and for speeches and individual mentoring sessions.

According to reports in the regional media, a number of new initiatives were launched at the November 8-9 event, including a one-stop portal for entrepreneurs, Wamda (which means 'spark'), and the USD500mn Riyada Enterprises Development (RED) investment platform.

The RED platform unveiled its first five investments, which included:

• Investment in regional IT healthcare service provider, E3;
• Growth capital financing for to an integrated agricultural enterprise in Egypt;
• Investment in OMS, a regional IT consultant based in Egypt;
• Growth capital financing for media and entertainment firm, Teshkeel Media Group (TMG); and
• Investment in social media, online community and user-generated content specialist firm, the Jordan-based d1g.
• The investment platform and Wamda website is backed by leading regional private equity firm, Abraaj Capital.

Quoted by the Albawaba news service last week, Tom Speechley, Abraaj Capital Partner and Chief Executive Officer of RED explained that:

"What we are aiming to achieve through RED is transformational growth in more than 100 SMEs in the next three or four years. SMEs have been starved of capital and left to their own devices and as a result they are underperforming their counterparts in other parts of the world in terms of productivity."

He continued:

"We need to address that by providing support in all its forms, finance, mentorship, education and recognition. The private equity industry is ideally placed to take a leading role in that transformation by providing much of what is required through tried and tested solutions including long term growth equity. This is the time of the entrepreneur and this is what entrepreneurs need."

This all takes place against a background of plans announced earlier this year to launch a second-tier market for smaller businesses next year, in order to boost access to capital for smaller enterprises, and increase the number of local IPOs (Initial Public Offerings).

In the new market, likely to be modelled on London's Alternative Investment Market, the regulatory thresholds for companies looking to float their shares would be lower than those of the main market.

Although there are a number of details remaining to be worked out with regard to the potential creation of the new market, including in terms of infrastructure and regulation, it would be a welcome development for both the Emirate's small firms and the private equity sector, as it would allow the latter to recoup their investment in the former in a more effective fashion.