AN ANALYSIS OF ENTREPRENEURSHIP ACROSS FIVE MAJOR NATIONALITY GROUPS IN THE UNITED ARAB EMIRATES Essay Example

Analysis of Entrepreneurship across Five Major Nationality Groups in the UAE

Analysis of Entrepreneurship across Five Major Nationality Groups in the UAE

Introduction

The United Arab Emirates (UAE) is one of the countries with the highest expatriate population engaged in entrepreneurial activities. Further, this foreign population comprises of over eighty-five percent of the total residents in the country. In their article, Qingxia Tong and colleagues posit that entrepreneurs across the five major nationality groups in the UAE have a lot in common compared to non-entrepreneurs based on their perspectives, connectivity and entrepreneurship activities (Tong, McCrohan & Erogul, 2012). However, this essay identifies the problems that these entrepreneurs face in their activities based on their different attitudes, connectivity, and activities from Tong and colleagues’ survey.

Supported by one of the highest GDP rates in the world, entrepreneurs from these nationality groups; UAE nationals, GCC nationals, non-GCC Arab expatriates, Western expatriates, and Asian expatriates, have invested heavily in the country because of its global image of being more tolerant and open to expatriates and foreign influence. Further, much of the nation’s economic growth is now driven by foreign individuals and organizations (Tong et al., 2012). While much of the entrepreneurial activities are driven by these nationals with most of them positive on the existing opportunities in the country, these entrepreneurs face numerous social, economic, political, and legal challenges in their efforts to do business in the Emirates.

In most countries, expatriate entrepreneurs comprise of the minority groups since immigration is the main reason for their relocation, and not business activities. However, in the UAE, these foreigners relocate to the country due to jobs and entrepreneurial activities. These entrepreneurs, depending on their background and occupation must navigate significant challenges before they can engage in business activities in the country. Firstly, close to fifty percent of the expatriates in the country have a secondary education and thus are low-educated and low-skilled (Tong et al., 2012). Additionally, few have the necessary capital to start a business and many of them have to deal with visa-related administrative issues. Again, their residence status and low-education make them to reside in labor camps because of earning only minimum wages. The middle and high-income foreign workers, like the rest, cannot get long-term legal residence status or rights in the country and as a result, some do not establish businesses in the country. The strict immigration and naturalization regime in the UAE makes it difficult for such entrepreneurs to get citizenship or permanent residence in the country, irrespective of the number of years one has lived in the country or the level of investment that they have made. Effectively, most expatriate entrepreneurs live in the UAE as guests compared to other nations in the world where such entrepreneurs go on to acquire permanent residence status and even citizenship (Tong et al., 2012). Therefore, the lack of long-term legal status and rights or residence may reduce the economic commitment of these expatriates and lead to negative attitudes about the entrepreneurial environment. Further, these expatriates may be keen on reducing their foreign direct investment in the country because of the strict immigration laws.

Additionally, the high income inequality and social status in the country affect entrepreneurship since the millions of low-income expatriates do not spend their income in the country but remit their money to their home countries. The UAE economy does not have a large stable middle-income class and the high-end tourist and luxury goods and services market are beyond the access of most new entrepreneurs (Tong et al., 2012). Moreover, diversity is a serious issue in the country as most expatriates find it difficult to integrate into the UAE’s Arab culture and navigate the complexities in the languages, customs, laws and cultures in their efforts to develop business ideas.

Reference

Tong, Q., McCrohan, D. and Erogul, M.S. (2012). “An Analysis of Entrepreneurship Across

Five Major Nationality Groups in the United Arab Emirates”. Journal of Developmental
Entrepreneurship, vol. 17, no.2, (18 pages).