A Very Big Picture: Letter from Dubai

A Very Big Picture: Letter from Dubai

Dubai is once again on a spending spree, erecting gargantuan buildings and even planning its own settlement on Mars, all to become a world-beating city. But can an absolute ruler decree creativity?

Dubai, I discover on a recent visit, is still in the business of building megastructures. In addition to the world’s tallest building and largest mall, Dubai is now home to the world’s largest picture frame, a gilded rectangular structure that stands 150 metres tall, 93 metres wide and frames views of the old city to the north and city skyscrapers toward the south.

Inside the building, a neon “vortex” tunnel ushers visitors into an interactive, augmented reality exhibition on the history and future of the city – a fitting format for a metropolis that might best be described as hyper real. If St Petersburg was born as a Renaissance perspective drawing erected on a swampy tabula rasa, Dubai is a real-life SimCity video game, a fantastical metropolis that emerged on the desert straight from an architect’s computer-assisted design software.

But although it was built from scratch, Dubai nonetheless includes common design mistakes: a lack of density and connectivity, dependency on cars, and a notable absence of walkable neighbourhoods and public spaces. So to be more than just a city of big buildings, it appears Dubai is addressing some of its issues by expanding the scope of its superlative targets.

To boost its liveability rankings, the Emirate has appointed a Minister of Happiness whose mission is to make Dubai the “happiest city in the world.” To increase cultural vibrancy and public space, the city has built d3, a “creative community” it hopes will become like London’s Shoreditch, and installed public promenades along the waterfront. To decrease dependency on oil revenues, the government has created the DIC “innovation hub”, dedicated to new ideas in media, technology and smart education. By the time it hosts the World Expo in 2020, Dubai aims to be the “smartest” city in the world.

The government has also announced it will convert its World Expo site into a readymade community called “District 2020”. The tech city will feature one of the world’s first 5G mobile networks and the government is actively targeting companies working in tech and innovation to occupy some of the 1.5 million square feet of commercial space allocated to the site – Siemans has already agreed to build a new logistics hub in District 2020, and consultancy firm Accenture is also involved.

“Our ambition for Dubai is to be a hub for innovation,” says Mohammed Al Shaibani, CEO of Investment Corporation of Dubai. Lofty – possibly eccentric – objectives are routinely set from on high in Dubai. The city is to have “the world’s first blockchain-powered government” by 2020. The Roads and Transit Administration aims for a quarter of all rides in Dubai to be driverless by 2030. The city also aims to be “the world’s 3D-printing hub,” and to build a Martian colony by 2117 – an effort that begins with building a 1.9-million square foot Mars simulation centre.

But given the scale and speed at which Dubai managed to fashion a global business hub in the middle of the desert over the last two decades, there’s reason to believe it will deliver on its prospective goals. And the government is currently pouring billions of dollars into infrastructure and tech innovation (43 per cent of the 2018 budget is funding infrastructure projects).

To foster a start-up culture, the government has also set up incubators like Dubai Future Accelerators (DFA), an amalgam of entrepreneurial hub and government bureaucracy, where start-ups compete to help accelerate government innovation. The company Civil Maps, for example, which develops 3D mapping software for possible use in autonomous vehicles, was in one of the first cohorts at the DFA and later worked with Dubai’s Roads and Transit Administration.

Companies, which are chosen based on a “mini-VC-analysis” of their viability, have also included Hyperloop One. The headline-grabbing high-speed train is now being developed by Virgin and the Dubai Roads and Transport Authority (RTA) and is set to hurtle passengers from Dubai to Abu Dhabi in levitating magnetic pods through low-friction pipes at 1,220 kilometres per hour, reducing travel time from 90 minutes to 12.

“Dubai keeps moving up on the list of the world’s easiest places to do business”, says Taimur Khan, a senior research analyst at consultancy Knight Frank. “It takes all of five minutes to start a business here.”

According to market intelligence firm CB Insights, start-up investment in the UAE exceeded US$1 billion in 2016. The same year saw the number of privately owned start-ups receiving equity funding increase by 45 per cent.

But despite the lofty objectives, barriers remain. Dubai’s legal and regulatory frameworks still lag behind the tech ecosystem’s recent growth, and it is therefore risky for a company to operate without having most of its ownership held outside of the UAE. Bankruptcy laws, for instance, are in the process of being reformed, but protections aren’t nearly as robust as in countries like the US. Even inside the city’s ‘free zones’, the cost of a company’s failure is potentially steep.

Dubai has a few emerging VC firms – Wamda Capital, for example, launched a US$75 million Middle East-specific venture fund in 2015 – but the ecosystem hasn’t developed to the point where big-money exits are all that common. And the city has yet to produce a true unicorn of its own, although Careem, a local Uber-style service is said to be valued at around US $1 billion.

But perhaps the deeper question here is whether absolute monarchs can really build a 21st-century tech ecosystem through top down decrees. Cities such as Berlin, Melbourne and Stockholm, recognized for their culture of entrepreneurship, are also cultural hubs known for openness and experimentation. Creating a transit hub is one thing – Dubai’s airport is officially the busiest in the world for international passengers – but start-up culture, much like happiness, is a little harder to engineer.


The story appeared in the June 2018 print issue of The Peak

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