For decades, the economic landscape of the United Arab Emirates (UAE) has been firmly rooted in its renowned oil and gas industry. It continues to serve as a cornerstone of the country's prosperity. However, in recent years, a shift towards diversification has taken centre stage. With a keen eye on the future, the UAE government took initiatives towards proactive strategies and ideas aimed at nurturing emerging industries and creating business opportunities. According to the Q3 2023 Central Bank of the UAE's (CBUAE) Quarterly Economic Review, released in December 2023, a non-oil GDP growth of 4.7% is expected in 2024. Meanwhile, oil GDP growth is estimated to reach 8.1% in 2024. This indicates promising business opportunities in the UAE, especially for those who are aligned with current market trends and are ready to leverage the various government initiatives in place to support diversification efforts and tap into the country's rapidly evolving economy. The UAE’s economic landscape in the third quarter of 2023 saw significant growth in real estate, construction, tourism and hospitality, with e-commerce and AI also expected to play pivotal roles in shaping the nation's economy.
In this article, let us explore the business opportunities in the UAE by examining some of the most promising sectors within the UAE economy for 2024. According to Statista, the UAE's GDP is expected to steadily rise and reach USD 652.44 billion by 2028. But which sectors could drive this growth? Here are some of the industries poised to flourish in the UAE market in 2024 and beyond.
The UAE’s real estate and construction market is a major player in the Middle East, thanks to massive and iconic projects like the Burj Khalifa and Palm Jumeirah. It is supported by government initiatives and incentives and the country’s overall appeal in terms of work-life balance. The real estate market in the UAE is anticipated to reach a staggering value of USD 0.71 trillion by the end of 2024. Within this market, the residential real estate segment is projected to reach $0.41tn by 2024. A steady annual growth rate of 3.03% between 2024 and 2028 will increase the market volume to USD 0.80 trillion by 2028. As part of the “Projects of the 50” initiative, the UAE government announced plans to implement a series of projects aimed at accelerating the country's economic development to transform the country into a comprehensive hub for all sectors. It aims to attract USD 149.8 billion in foreign direct investment (FDI) over the next nine years. As the government enhances cities for living, working and travelling, the real estate and construction sector will expand. Robotics, drone technology and artificial intelligence (AI) are making construction safer, more efficient and cost-effective. Companies looking to enter the UAE market can leverage these strategies and government initiatives to establish a strong presence and capitalise on expanding business opportunities.
The tourism and hospitality sectors demonstrated resilience and growth, in line with the UAE’s ambitious National Tourism Strategy 2031. The strategy includes 25 government initiatives and policies to boost the UAE's tourism sector. It targets four main areas: enhancing the national tourism identity, diversifying specialised tourism products, building tourism capabilities, promoting national talent and increasing investments in all tourism areas. In 2023, business ideas surrounding luxury hotel revenue dominated, constituting 53.7% of the total, showcasing the UAE’s commitment to upscale experiences. The hospitality sector is set to expand, with over 130 premium sites and about 34,000 rooms expected to join the top-tier segment. The UAE's hospitality sector growth, boosted by Michelin-starred restaurants, cements its status as a prime destination for high-net-worth individuals. The market is projected to reach $7.37bn in 2024 and emerging industries at a CAGR of 5.12% to USD 9.46 billion by 2029.
In the dynamic landscape of the UAE, the e-commerce sector has emerged as a lucrative arena ripe with business opportunities and driven by evolving market trends and innovative government initiatives. In 2023, the UAE saw notable growth in apparel, electronics, and media due to increased internet usage. Mobile shopping is preferred for its convenience. Credit and debit cards are the primary payment methods, with 93.2% trusting traditional banking, as per Euromonitor International. Smartphone use underscores the importance of seamless mobile experiences and social media in e-commerce. According to the ‘E-Commerce Report in the Mena Region 2023’, the UAE’s total e-commerce market size reached AED 27.5 billion in 2023 and is expected to surpass AED 48.8 billion in 2028. The UAE government has implemented several initiatives to promote entrepreneurship and innovation in the country’s e-commerce space while also developing frameworks that protect consumers and businesses. This includes regulating payment systems and establishing dispute resolution mechanisms among other efforts. These strategies underscore the UAE's commitment to nurturing entrepreneurial ideas and staying abreast of market trends in emerging industries.
The UAE’s commitment to embracing cutting-edge technologies such as AI is evident. This aligns seamlessly with the broader market trend observed in the Middle East and Africa (MEA) region, including Israel, where expenditure on AI is anticipated to surge. According to insights from the International Data Corporation (IDC), the business environment in the MEA region anticipates a substantial growth trajectory in AI expenditure, slated to soar to $6.4bn by 2026. This surge underscores a robust 29.7% Compound Annual Growth Rate (CAGR) from 2022 to 2026, signalling profound shifts in business strategies and ideas. In October 2017, the UAE government introduced the UAE National Strategy for Artificial Intelligence 2031, showcasing its commitment to evolving into a technologically advanced nation. This strategic initiative not only reflects the government's dedication to fostering innovation but also presents lucrative business opportunities for companies within the UAE. The strategy sets forth aspirations for positioning the UAE as a frontrunner in AI by 2031, with a particular emphasis on constructing a cohesive AI framework tailored to key sectors within the country.
In 2024, the UAE will continue its pursuit of business opportunities and economic growth, propelled by an array of emerging industries. For entrepreneurs seeking business opportunities in the UAE, Ras Al Khaimah Economic Zone (RAKEZ) emerges as a pivotal ally. RAKEZ offers an innovative platform conducive to cultivating business ideas and tapping into emerging trends within the UAE. We simplify company registration and offer competitive cost structures and incentives, aiming to reduce operational expenses and enhance profitability. Our modern facilities and well-equipped infrastructure, including office spaces, are designed to meet the needs of startups and SMEs. Additionally, our comprehensive support services, such as legal and regulatory assistance and help with opening bank accounts, ensure your company operates efficiently and compliantly. For insights into how RAKEZ can bolster your enterprise amid evolving market trends and government initiatives, call us at +971 7 204 1111 or visit our website. We are here to help you succeed.
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