Over the last decades, cities across the globe have tried — and failed — to become the next Silicon Valley. Abu Dhabi is unfazed by that: It hopes to become a better Silicon Valley.
The Abu Dhabi Investment Office (ADIO) and Director General Dr. Tariq Bin Hendi have been working to simultaneously court foreign investment and stimulate local entrepreneurs to establish the UAE — and Abu Dhabi specifically — as a force in the global tech landscape. Bin Hendi, whose mandate includes convincing companies to base themselves in the region, believes the financial and regulatory incentives they can offer, especially in a post-COVID era, are ripe for making that happen.
"We are in a very unique situation here," he said. "Policies can be changed very quickly, very effectively to make sure that the private sector is able to thrive."
In an interview with Protocol, Bin Hendi shared how the government is working alongside the private sector to foster a culture of innovation, what he sees as Abu Dhabi's trajectory for the next 10 years, and why he thinks the city can surpass Silicon Valley where others have failed.
This interview has been edited for clarity and length.
I've heard you describe ADIO's broader mandate as shaping the private sector. How do you go about selling that message?
The way we've looked at how we can help the private sector is that we look at what's already on the ground. And we're trying to understand based on the companies that are here — that are trying to adopt technology and grow — whether or not we can bring in those technology partners and help them with that. We've got various incentives that we use both financial and nonfinancial. More important is we're looking at how those international technology firms or innovators can come in and really help us with resetting the existing infrastructure.
So [companies are] coming in and they're being constructive, but they're also disruptive to some of the industries that we have. It's in getting that balance right that I think we've figured out a really interesting program. And we're seeing a lot of traction now from companies around the world that are looking at Abu Dhabi as this link into jurisdictions and geographies that they hadn't thought of the need to grow into. We want international companies, we want local private sector firms to help us from a policy perspective, from an ecosystem build-out, from a cluster strengthening perspective to really help reshape what Abu Dhabi looks like.
Of those three pillars — shaping policy, ecosystem and industry clusters — which has been easiest to capitalize on, and which has presented the most hurdles?
Where we might've had some resistance previously from local institutions that were not as concerned about adopting technology, it's been a very different conversation in the last three or four months. They've reached out saying, listen, our business model needs to change. So, whereas we were delivering that narrative previously, it's now coming back to us. And so coming in and trying to help them by partnering them up with international firms has been an interesting experience.
I suppose the easiest one is working with firms that have international exposure that had been looking at how to rebalance their geographic presence. One of the key things that we start with every time we engage with someone is [asking] how can we build this partnership with you? How can we make your business model more resilient in terms of expanding within the region and the wider geography? But more importantly is that there's a seat at the table to help us with the evolution of our policies, the evolution of our ecosystem. And I think that is a really important point that many of the international firms get quite excited about. They really want to come and they want to help shape things. They don't feel like they're fighting against the system. They feel like they're moving with the system to effect change.
I would say that pre-COVID we probably had less traction on the local institutions, but I'd say that now, going through this experience, we're seeing that companies are immediately engaging with local companies and they're working together to try to figure out how they can move forward. So it's been really enlightening in terms of seeing how the private sector will take on board some of the government initiatives and run with them themselves.
What does it actually look like when companies run with those initiatives themselves?
When we started deploying capital into the local entrepreneurial— call it venture capital — ecosystem, you had pockets in Abu Dhabi that were [already] doing this well for a long time. When we started communicating to not just the local community, but to the world that we were pushing forward with this initiative, what we started to notice was that locally, you had lot of entrepreneurs that were starting to come to us, [asking] can you transfer some of that knowledge that you have in house to help us build something for our family office or our family business? So this is where the government leads a lot of initiatives, and when the private sector sees that there is an impetus to really push forward with something, they come on board.
What they noticed was that not only was there a narrative around this, but there were real actions and deliverables. There were millions of dollars being deployed. We were actually putting forward a new narrative: This is a space that you should invest in because we do believe that you're going to be doing multiple things by participating, whether it's creating new businesses or whether it's disrupting.
So the combination of financial incentives and policy reform and the alignment within the wider Abu Dhabi ecosystem has been something that's really helped drive the private sector to own some of this work with us, rather than trying to say that we're competing.
How have the events of the last few months shifted ADIO's dealings or the way you're looking at the global landscape?
One of the things that's been really beneficial to us is that the UAE and the Abu Dhabi government reacted really quickly. They put all the protocols in place. They put all the quarantine requirements in place, and we were able to nip this in the bud. And I think that sent a really strong signal to the business community globally when we started engaging with them.
It's been very different trying to talk to the entities about expanding some of their operations here when you can't actually sit across from someone and relay that message directly. Interestingly, we've seen a massive increase in interest because of the way that we reacted to what was happening with the pandemic. Now it's just about translating that into boots on the ground and getting people over here so that we can actually start helping.
Are you looking at particular sectors or industries that you're focusing investment on as you build out the Abu Dhabi tech ecosystem?
If you're looking at innovation technology, it's ICT, biomed, and we've done a lot recently in agriculture or agtech. That was not a result of the last four or five months, that was a result of a lot of forward thinking on the part of our leadership a year ago when they put all these programs in place. We need people to come and test arid agricultural technology here because we've got an arid climate, and we believe that we can offer the right incentives.
So we have a focus on agtech and on a few other clusters, but I really want to emphasize that anything that's unique, anything that helps the ecosystem, anything that's going to be revolving around that whole innovation concept is key for us.
Are you looking to other organizations, cities or countries as models for what you're doing?
We have almost a blank canvas as it relates to building this entire ecosystem up. We've looked at various models across the world: We've looked at what the Irish have done, we looked at Singapore, we looked at Korea, we looked at various cities in the U.S., Germany and elsewhere. And while we can relate to a lot of what it is that they do, we have the uniqueness in terms of some of the factors that we have at play here.
We've looked at some models more closely than others because they've been very successful, and we've looked at what works with our infrastructure and our legal framework and what it is that needs to be tweaked in our legal framework to make sure that we're able to not just reach where those other cities have reached, but surpass them. I think this is sometimes lost in some of the discussions. That it's not about trying to catch up, it's trying to catch up and then surpass. And that's what our ambition is.
We now have a singular message in Abu Dhabi, and that singular message is that if you are focused on technology and innovation, we want to support that business. We want R&D centers, we want high-skilled knowledge transfer, we want to upskill our labor force. We want to make sure our universities are plugged into these private sector companies and vice versa. We want the IP generation, and we want to change everything that revolves around securing that IP and your rights around that IP. And we need to do that by being engaged with the private sector.
Regarding the "build upon and surpass" mindset, how do you think about the timeline? In the next five or 10 years, where do you see the greatest progress happening on that objective?
We're actually really fortunate in that our decision-making process is quite flat. We go up to the senior leadership, and that leadership is running the country. You make suggestions, you give advice, and things are affected very, very quickly. We don't have long processes that we need to go through in terms of getting things done. We've got to have robust research done to validate the point, but they're done very quickly and very effectively.
All of the things that we've been trying to change and that we had milestones set for that we would be changing over the next couple of years, we've now done in a five-month period. One thing that's been highlighted now is food security. So we want to play a part in every part of that value chain, same applies to medical, pharmaceuticals, biomed, so on and so forth. Technology, our ability to communicate, that ICT component, 5G and the fourth industrial revolution. All of those are really important aspects of what we do.
Over the next five to 10 years, we want to build really strong collaborative models with companies and cities. It does no one any good to compete when you're competing over exactly the same thing, when you can collaborate and use each other's strengths for the collective good. We know that we've got competitive advantages in some sectors. We want to look at advanced materials. We want to plug into what ADNOC [Abu Dhabi National Oil Company] is doing downstream and upstream on the oil and gas front and feed into all those technologies that are emerging there.
As you're trying to build foreign direct investment and local innovation simultaneously, do you see one as more of a catalyst for the other?
I think they're not mutually exclusive here in the sense that the international companies coming in are going to have certain requests and requirements to set up that are going to then help support local companies that are already on the ground, whether those be policies or different things.
We understand now what needs to be tweaked and adjusted, so how can we make those tweaks so that everyone benefits from them rather than doing it for just one or two firms? And then how do we — beyond just a policy — support it through various mechanisms where people can actually avail of what it is that we've introduced.
I think that becomes the important connector there in terms of the catalyst: The government will always play a role in ensuring that these sectors are successful because we have a vested interest in ensuring their success. And we want to make sure that we're building these sectors, clusters and private institutions, whether they be local or international, to be here for the long term.
