Digital Transformation is the Condition for Companies to Expand Across Borders

Experts emphasized that digital transformation has become a prerequisite for the prosperity of small and medium-sized companies and their expansion across borders, starting from the UAE, which is considered the strongest regional base for small and medium-sized companies and startups in the region, noting that the effective adoption of new technology saves up to 80% of incidental costs in companies, as well as It helps companies innovate, stay flexible and responsive, and adapt to the ever-changing business environment.

Experts pointed out that digital transformation may require investments that often exceed the capacity of small companies, and they stressed that digital infrastructures such as digital applications and electronic payment platforms and systems available in the UAE allow small and medium-sized companies and startups in the country to grow and become power centers affecting the economy. Both the regional and even the global economy levels, pointing to the need to strengthen partnerships between large companies on the one hand, and small and emerging companies on the other, to achieve this goal.

Experts explained that supporting medium-sized companies to face the challenges of digital transformation challenges are not a purely governmental responsibility, pointing to the possibility that large companies can also play an important role when it comes to supporting small and medium-sized companies in terms of building skills, especially in the field of digitization and helping to create an ecosystem for environmental transformation. , including opening financing.

A Pivotal Role

Small and medium enterprises play a pivotal role in the economic growth of the UAE and contribute to strengthening the country’s position as a global investment hub. According to recent government statistics, these companies represent more than 94% of all companies operating in the UAE and constitute more than 60% of the country’s GDP.

In Dubai alone, small and medium-sized companies represent 95% of all companies and provide 42% of all job opportunities. Therefore, these companies constitute a pivotal pillar for economic development in the region, job opportunities and stimulation for innovation.

According to a recent McKinsey report, by 2025, 70% of companies in the world will automate their structured infrastructure to provide flexibility and efficiency, up from 20% in 2021.

Centers of Strength

Tarek Heneidy, Vice President of Operations for the Middle East and Africa at FedEx, said in statements to Al-Bayan that digital infrastructures such as digital applications, platforms and online payment systems available in the UAE allow small and medium-sized companies and startups in the country to grow and become power centers that can influence. on the global economy.

Henedy added that small and medium-sized companies need digital transformation to improve a number of operations, such as streamlining the value chain for suppliers, dealing with cross-border payments, tracking customers for their parcel delivery operations, and enhancing efficiency and customer experience. Therefore, digital transformation provides these companies with opportunities for prosperity and growth to become valuable assets and important companies that contribute In the service and development of society.

On the role of large companies in supporting smaller companies in digital transformation, Heneidy said: “At FedEx we have decades of experience and we watch companies grow and how startups grow into power centers that can influence the global economy.

We are excited to provide SMEs in the UAE with the right resources, tools and solutions they need, and to remain the trusted advisor to help them accelerate their business growth globally. For example, the FedEx Small Business Center is a one-stop shop that offers practical advice including process planning, building and running an online business.”

Supportive Environment

The UAE enjoys a strong environment supportive of business through the presence of government support and initiatives that encourage this, such as allowing 100% foreign ownership of companies, as well as providing high levels of security and safety, welcoming workplaces and its close connection with all parts of the world.

In 2007, the UAE established the Khalifa Fund for Enterprise Development to raise the level of emerging companies in the country and help them thrive through investments and workshops. Since 2019, the fund has invested more than 1.32 billion dirhams to encourage entrepreneurship and instill a culture of innovation.

Global Openness

In addition to investing in the growth of small and medium-sized companies, the UAE is considered the preferred business destination due to its openness to large regional and international markets, its possession of a world-class infrastructure, its attractive and favorable nature for the conclusion and success of business, in addition to the many airports, seaports and free zones that The country is proud of it.

There are more than 1,500 American companies operating in the Middle East, Africa, Europe and Asia that have chosen to establish their global headquarters in the UAE, which has become the largest market in the Middle East and Africa for American exports over the past 12 years.

Growth and Expansion

Henedy added: “In addition to the above, small and medium-sized companies should focus on their strengths in order to grow and expand in new markets, and leave the tasks of establishing infrastructure and logistics services to specialists.

Logistics service providers can also support SMEs with improved customer experiences and cost optimization, in addition to addressing the challenges of cross-border trade, and delivering products on time.

By going one step further, logistics service providers will be able to make suggestions with additional benefits, and to identify gaps that companies may not necessarily be able to notice. Business owners can cooperate with logistics service providers to build a strong, well-established and integrated supply chain, which contributes to providing access to new markets and enhancing revenue streams.

Across Borders

Many commercial activities, especially those related to small and medium enterprises, are still carried out within the local market due to the complexities and costs of border crossing procedures. Therefore, SMEs need to adapt to the demands of international shipping regulations and guidelines as their business grows abroad.

Compliance with complex supply chain procedures, cross-border business activities, and government regulations is a tough work process and remains a barrier to expansion, often very difficult to overcome.

Heneidy added: “FedEx continues to be a major supporter of small and medium-sized businesses, so we have developed programs that provide small business owners with the right tools and guidance to help them expand their business. We also help small and medium-sized companies better navigate global markets by providing them with automated shipping tools, allowing our customers to create their shipments online and simplify their shipping process and take advantage of the various benefits that are included in these tools.”

Logistics Services

Soham Chokshi, co-founder and CEO of Chipsy, a logistics software company, considered that developing the local supply chain is crucial to promoting economic growth in the UAE, especially since the country’s logistics sector contributes more than 14% to its gross domestic product.

He added: With favorable investment opportunities, the great trend towards digitization, and the strategic location on the world map, the UAE has become a leading global trade center and is among the top three logistics centers in emerging markets around the world. The logistics services market is expected to reach 31.4 percent. billion dollars by 2026.

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