The United Arab Emirates (UAE), a leading oil producer in the Middle East, is preparing to open the "post-oil" era by shifting from oil dependence to a diversified, high–value-added economy spanning services, manufacturing and advanced industries. The intention is to improve the structure of the economy and industry in step with changing global demand. ChosunBiz visited Abu Dhabi at the forefront of the post-oil trend to look around sites preparing for the future after oil. [Editor's note]
On the 4th of last month (local time), on the streets of Abu Dhabi Global Market (ADGM), the world's largest financial free zone, foreigners in suits stood out as much as locals wearing the UAE's traditional "kandura" and "abaya." English, rather than Arabic, was being used as the de facto common language here. It was a scene that clearly showed Abu Dhabi has established itself as a "global business hub" city.
ADGM, which spans 14.38 million square meters, is the world's largest financial free zone and hosts a large number of leading global corporations such as Goldman Sachs, Morgan Stanley and BlackRock. Although it has been less than 10 years since its establishment, it attracted 3,227 corporations as of the third quarter of this year, up 43% from a year earlier. Total assets under management (AUM) also surged 48% year over year, and ADGM is being described as a "black hole" sucking in global corporations.
Abu Dhabi, the capital of the "oil-rich" UAE with daily crude output reaching 3 million barrels, has long prepared for a transition to a sustainable state in anticipation of a post-oil era. ADGM was created as part of efforts to invest oil-accumulated wealth into the future and offers an environment optimized for corporate activity. As a free zone, it operates on a common law framework and provides bold tax incentives such as corporate tax exemptions.
◇ ADIO drives non-oil growth with 13 clusters
If Abu Dhabi has built a business-friendly environment through ADGM, the Abu Dhabi Investment Office (ADIO) serves to link leading global corporations with Abu Dhabi's investment environment. ADIO operates eight offices in seven countries worldwide and is actively encouraging overseas corporations to relocate to and set up in Abu Dhabi. It opened an office in Korea in 2021, and among Korean corporations, H2O Hospitality (tourism), Bespin Global (cloud) and Neoply (Blockchain) are receiving support from ADIO.
Ahmad Subrah, ADIO head of value creation and cluster planning and development, who was met that day at ADGM, said, "ADIO is leading various initiatives to drive growth in the non-oil sector of gross domestic product (GDP)." Abu Dhabi has set a goal of expanding GDP, currently about $300 billion (about 430 trillion won), to $1 trillion (about 1,435 trillion won) by 2040, with 80% of that generated from the non-oil sector. To that end, ADIO, together with the Abu Dhabi Department of Economic Development (ADDED), is leading the development of 13 economic clusters.
Among them, the cluster considered the most successful case is "SAVI (smart and autonomous vehicle industry)." Launched in Oct. 2023, the SAVI cluster aims to support innovation and commercialization of smart and autonomous vehicle technologies in the UAE. U.S. urban air mobility (UAM) company Joby Aviation and Chinese autonomous driving company WeRide are participating in the SAVI cluster. ADIO is actively encouraging these corporations to interact with domestic autonomous driving startups and corporations to create synergies.
In addition, the agrifood and water resources technology cluster AGWA and the biomanufacturing cluster HELM are functioning as key pillars underpinning Abu Dhabi's economic diversification. Deputy Minister Subrah said, "Each cluster has its own strategy and a target for GDP contribution to be achieved over the next 20 years," adding, "If you sum the expected GDP contributions of each cluster, they will account for a very large share of Abu Dhabi's target economic performance." In SAVI's case, it aims to contribute about 44 billion dirhams (about 17 trillion won) to the regional economy and create about 40,000 jobs.
Abu Dhabi's appeal lies in its solid infrastructure and light regulation. Not only are the basic facilities needed for business—such as highways, power grids and internet networks—well established, but there are also economic free zones like ADGM with almost no restrictions on foreigners. Deputy Minister Subrah said, "Abu Dhabi boasts a range of strengths, including various support systems necessary for corporate activity, an excellent living environment, outstanding global connectivity, and modern infrastructure," adding, "These elements were not sufficiently known abroad for some time, but in recent years Abu Dhabi has raised its profile globally and is making its presence felt."
◇ Leaping forward as a "global startup hub" with Hub71
Abu Dhabi is actively attracting not only global conglomerates but also early-stage startups with high growth potential through "Hub71." Established with support from UAE sovereign wealth fund Mubadala, Hub71 is a platform that nurtures startups worldwide, and as of last year, 371 startups from around the world were participating in its investment ecosystem. Backed by Hub71's support, these corporations have secured a total of $2.1 billion (about 3 trillion won) in follow-on investment to date, and generated $1.2 billion (about 2 trillion won) in revenue.
Hub71 is focusing its investments on non-oil industries, especially advanced technology. By field, startups in Fintech (62), Healthtech (44) and Climate Tech (26) account for the largest shares. Among Korean corporations, big data specialist Dtonic, Edtech startup DoBrain, and artificial intelligence (AI) corporation Redbrick are receiving support from Hub71. Each year, Hub71 selects startups with technological prowess and provides comprehensive support so they can settle and grow stably, offering not only capital investment but also office and residential space and investor connections.
On the 5th of last month at the Hub71 office in Al Khatem Tower within ADGM, Redbrick CEO Yang Young-mo said, "Compared with other global startup hubs, Abu Dhabi has a well-established environment favorable for startup growth, and there is ample policy-level support from the government," adding, "Hub71's own investment ecosystem is solid, but simply receiving support from Hub71 serves as a kind of 'guaranteed check' in forming partnerships with various institutions and corporations." Redbrick recently signed a memorandum of understanding (MOU) with the Innovation Hub at Middlesex University Dubai for cooperation in AI education and research.
Abu Dhabi's startup-friendly environment is attracting startups that are strongly fearful of failure. Yang said, "In AI, it is difficult for startups to deliver results based on a single technology amid deep-pocketed conglomerates," adding, "For startups to survive, the environment and community must support them, and compared with other regions, Abu Dhabi has strong demand for AI technology and an environment favorable to startup growth."