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From Invest In to Invent In : Red Carpet G2B Services

From Invest In to Invent In : Red Carpet G2B Services

The Government’s role is more than just a source of easy funds, and extends to helping innovators commercialize great ideas and making it easy for companies to do business. These are some of the ways in which countries can attract innovators to a knowledge economy.

In a session titled ‘From Invest In to Invent In: Red carpet G2B services’ at The Government Summit 2015, experts discussed ways to attract innovator-entrepreneurs to the economy. 
Mr. McClay said that the role of the government needs to be carefully defined. Instead of focusing on short-term gains, such as subsidies for the private sector, he said government should focus on creating an environment for investment. 

;Creating clear pathways for investment leads to good innovation. Good innovation also leads to good investment,” he said.

Innovations need to be protected and regulations should be simple for attracting innovators. McClay said one of the policies that drive regulation is to have many categories of immigration, which ensures creating pathways to long-term residency in skill areas where there are shortages.

There are many ways to attract investment into a country but there is need to be cautious about using public funds to do so. Instead, it is better to focus on creating an atmosphere conducive to good business and good people.

Education emerged as a key point in the discussion, along with retaining the skill base. McClay said: “We have invested in education and research through the crisis. We spend per capita more than any other country in the world on education.

;When we think of large and small businesses, they need capital and they need an idea. Good work can be done when there is lack of capital but when an enterprise does not have a good idea that is a challenge,” he said.

Building efficiency in the system is a way of reducing risks. McClay said: “Reducing risk for businesses does not mean that government take this risk from the investor. It means reducing red tape and bureaucracy. For instance, you can create a registered business in half a day with one form. When government is focused on finding ways to be more efficient, businesses spend more of their time focusing on business and less time worrying about meeting the requirements of government.;

Al Nowais said there is a need to create a culture for innovation and entrepreneurs. He said the fund is in the process of launching an incubator in cooperation with various academic institutions, which include MIT.

Al Nowais said the Khalifa Fund is bridging the funding gap for SMEs, adding that they have recently covered 60 projects in Ras Al Khaimah and 50 in Fujairah. A third of the funds go to women-led initiatives. A venture capital fund has also been created to provide soft and easy loans.

“We do have a clear strategy that encourages investment. We want to create an incubator for innovation,” he said.

> Weathering a failure rate of 30%, he said, the Khalifa Fund has created a department for business support, which sifts through the applications to see if any management support is required to build capacity to reduce failure. 
Mr. Al Qamzi said one of the essential jobs of government is to enhance digital infrastructure to ensure that the UAE meets the criteria and standards to attract innovation-based investment, along with the required amendments and legislation.

The UAE has announced 2015 as the Year of Innovation. This will mean different things for various sectors and levels. Al Qamzi said the focus will be on investment incubators for space, education, and technology sectors.

Al Qamzi said a part of their work is to provide support. This includes facilities, training and developing strategy. One example is the Dubai Innovation Hub initiative to enhance cooperation with leading international companies, launched by Sheikh Hamdan bin Mohammad bin Rashid Al Maktoum, Crown Prince of Dubai. 
Al Qamzi said the UAE government is working on many such plans towards the preparation for Expo 2020. An innovation hub is being established at a cost of AED 4.5 million. He said it is important to minimise risk and support innovation. This is only possible by working on an integrated approach. 

In addition to financing, he said, “challenges to attract innovation-based investment are awareness, attracting and retaining talent, and developing legislation that guarantees intellectual property rights.

Al Qamzi said Dubai is already attractive to investors and there is a demand for investment in the UAE. “The Foreign Investment Law will resolve a number of these problems,” he said, adding that the current regulations, which provide for partnerships and free zones under various models, are suitable for a wide range of investors. 

Introducing the German perspective, Dr. Gopfrich said the economic success of Germany, which lacks natural resources, is based on using innovation and talent to build industrial services. Referring to the model of Economy 4.0, which relies on automation and systems for industrial transformation, he said: “Innovation is more important than classical investment.

He said Germany’s heavy industry sector has contributed to the country’s success in weathering the world economic downturn. Along with this, the non-centralized nature of knowledge is a contributor too. Many SMEs, the champions of Germany’s industrial sector, are based in the countryside, working with local universities. He spoke about the emphasis on floor-level science where workers are rewarded for innovation.

Dr. Gopfrich brought up the idea of business angels. He said that while there are many funds where young inventors get access to loans and offices, a more personal approach involves successful businessmen investing their money, providing infrastructure and advice. 

Even so, funding remains important for some segments. In the UAE, some of the large funds say they do not open a file for investment smaller than AED 20 million.