Dubai Internet City (DIC), which clusters companies from many industries and targets emerging markets throughout the Middle East, India, Africa and the CIS countries, is the benchmark in technology free zones. Sheikh Mohammed bin Rashid al-Maktoum, crown prince of Dubai, had never made a secret of his vision to make the emirate a premier ICT hub, not only for the UAE and the Gulf, but for a much larger region, and as a result, DIC was launched in 2000. It is part of TECOM Investments, a subsidiary of the state-owned Dubai Holding, and built to be a knowledge-economy ecosystem to support ICT businesses in a free trade zone.
“Our whole idea in developing the cluster was to attract development and a knowledge based economy. This fell very well inline with the overall Dubai strategy,” explained one of DIC’s officials. “At the time that Dubai Internet City was created, the cluster development idea was not well-known to the world. We emphasized the fact that we are a purpose-built city that can accommodate certain segments of the industry, or cluster certain segments of the industry, which help in developing a stronger base for that segment.”
The DIC boasts the most sophisticated and largest ICT infrastructure in the Middle East and North Africa region. This competitive advantage has attracted multinational leaders such as Microsoft, HP, IBM, Dell, Siemens, Canon, and Cisco that base their operations from DIC along with many other medium and small enterprises. For foreign companies, DIC offers 100% tax-free ownership, 100% repatriation of capital and profits, no currency restrictions, stringent cyber regulations, and protection of intellectual property.
By 2007 DIC had expanded its premises and saw an additional 112 companies locate which resulted in 84% growth in rented areas.
“Today, we have 1,200 companies residing in the DIC and that is growing at a very rapid rate. There is approximately 33% growth in the number of companies that have joined DIC in 2007 against 2006,” the official pointed out.
Notable additions to DIC environment were Qualcomm, Google, and British Telecom.
“From our end, we are focused on maintaining the [growth] curve by maintaining our base and diversifying our main core areas. Our main core areas are software development, IT services, networking, etc. For us to keep this momentum going, we are looking at attracting new companies into the region.”
In the initial stages, instead of relying on the UAE’s only telecom at the time — Etisalat — DIC provided its own telecommunications infrastructure, du, launched in 2006 as the UAE’s second telecom provider. DIC holds a 20% share of du and therefore maintains control and leverage over its services.
As a free zone, DIC remains outside the country’s censorship proxy that filters and blocks material deemed ‘inappropriate’, and also blocks Skype and other voice-over-IP (VOIP) functions.
Until the expansion was completed in 2007, DIC’s major challenge was available space for new partners wanting to join. In March 2008, DIC announced a 25% rent increase for leases signed after June 2008, although prices are still below market. However, now the main challenge is to maintain the consistent growth it has seen since its launch.
For the city’s managers, the sustainability of growth for the DIC is still possible by attracting more ICT firms from around the globe. As the official pointed out, “With a huge number of global players around the world, not everyone is aware of the potential that the region can offer to them. Also as part of TECOM’s strategy, our goal for the future is to diversify into main areas of development. So we are entering into areas that can benefit and compliment what we are already doing for the industry.”
DIC is also expanding abroad in partnership with Sama Dubai to take its cluster model internationally. Plans for a new development in Malta were launched in 2007 and there is also talk about a cluster in the southern Indian state of Kerala.
