The decades-old UAE-UK relationship is evolving, seeing greater trade in knowledge and culture sharing – which marks a shift away from the relationship’s roots in the energy trade.
It is the strength of the relationship that has led to more than 120,000 British citizens and more than 5,000 British businesses moving to the UAE. The UK Department for Business & Trade reports that UK-UAE trade has bounced back to pre-Covid rates to reach £18.9bn by the end of Q3 2022. According to The National, Britain aims to export a total of £1trn in goods and services by 2030, with the UAE as a key target market.
The UAE-UK Business Council oversees this ambitious relationship. “Since the UK-UAE Partnership for the Future Agreement was signed in September 2021, alongside the £10bn Sovereign Investment Partnership between Mubadala and the UK Office for Investment, we have seen strong growth in trade and investment in both directions, particularly in new and emerging sectors,” explains Bradley Jones, executive director of the UAE-UK Business Council.
“The main benefit I see from the relationship, in addition to the commercial deals taking place, is the exchange of knowledge flowing between both countries, which is the main area of focus for the UAE-UK Business Council.”
The capital of the UAE, Abu Dhabi, offers UK businesses a host of benefits.
“Ease of doing business is an important factor for British companies looking to expand overseas,” explains Jones. “Abu Dhabi ranks first in the MENA [Middle East and North Africa] region for ease of doing business. It is a great hub for innovative start-ups, with Hub71 offering a range of incentives such as office space, marketing and visa support to help connect companies to potential investors as well as large corporates and government contacts. Abu Dhabi is also a very lovely place to live.”
Companies like fraud prevention firm Callsign have chosen Abu Dhabi as the site of their regional headquarters. The London-headquartered company established an engineering and development site in Abu Dhabi in 2021. The UAE has placed digital transformation at the heart of the country’s national strategy, and Callsign’s world-class engineering facility employs regional talent to drive innovation and growth in the digital identity industry.
“There is great scope for collaboration in every sector, which is rich in technology and innovation,” Jones adds. “For example, life sciences: we are running a campaign on UK-UAE collaboration in cancer care at the moment.
“Abu Dhabi is also a great springboard for British companies looking to win new business opportunities elsewhere in the Gulf and wider MENA region. It has great transport links and commercial connectivity to the region.”
One of the priorities of the relationship between the UAE and UK is digitalisation. The UAE and UK signed a bilateral memorandum of cooperation on Industrial and Advanced Technologies Collaboration in 2021. The two countries agreed to work together[SA1] on priority areas including life sciences, space and hydrogen, as well as business goals including supply chain resilience, regulations and standards.
The UAE is already a leading international destination for digitalisation. Abu Dhabi is home to large-scale data centres and leading international cloud service providers including Microsoft and was ranked one of the top two smartest cities in the Middle East in the 2020 Global Innovation Index. According to a report commissioned by Amazon Web Services, hyperscale cloud computing is expected to create 133,000 direct and indirect jobs in the UAE by 2030 and help reduce the country’s carbon dioxide emissions by up to 78% compared with other IT models. It will also reduce security incidents by more than 30%.
In 2022, the UK and UAE announced “significant progress” towards building a data bridge to further develop bilateral trade. With more than 5,000 UK businesses operating in the UAE, the reliable flow of data across borders is essential. Julia Lopez, UK Minister of State for Media, Data and Digital Infrastructure, told AGBI: “The UAE has always been an important destination for UK businesses, and I look forward to strengthening our partnership through the free and secure flow of data in the future.”
Another major priority for the UAE-UK Business Council is decarbonisation. According to a recent report, Collaboration In Energy Transition Between the UK and the UAE – Barriers and Opportunities, the Middle East aims to become one of the world’s leading hubs for large and low-cost renewable energy projects. The region is already home to world-leading infrastructure and decades of energy expertise. Abu Dhabi has focused on green energy and the green economy for more than 16 years, with the creation of world-leading sustainable city Masdar beginning in 2008.
“Collaboration in energy transition is a fast-growing and increasingly important area,” says Jones. “Last year, BP and ADNOC announced that they were moving to the design phase of their hydrogen collaboration in Teesside, ADNOC’s first investment in the UK.
“Masdar and BP are also exploring opportunities for collaboration on HyGreen Teesside, BP’s green hydrogen project powered by offshore wind in the Teesside industrial cluster.”
Meanwhile, the UK is pursuing an ambitious trajectory towards net zero. The Council confirms that “there is scope for the UK and the UAE to exchange views and best practice on the regulation of the hydrogen sector as it scales up over the decades ahead”.
In order to reach climate targets, new technology is vital. “This presents a significant collaborative research and innovation opportunity for the UAE and UK, to incentivise R&D through public policies and regulation,” according to the Council. At the same time, shareholder-driven action and sovereign wealth funds will also help finance UAE-UK collaboration in the energy transition. Through its Dh2bn Innovation Programme, Abu Dhabi Investment Office (ADIO) offers financial and non-financial incentives to innovators across a range of sectors. Abu Dhabi’s Mubadala sovereign fund is committed to pursuing the energy transition while making a positive impact on people and the planet.
In a move towards greater sustainability, ADIO has also issued its own environment, social and governance (ESG) policy for partners to integrate ESG standards into business decision-making under the public-private partnership framework, as well as the Innovation Programme.
In 2022, negotiations began for a free trade deal between the UK and Guld Cooperation Council (GCC). The deal will address two types of barriers to trade: tariff barriers and non-tariff barriers. “Tariffs are already relatively low on most goods and services trade between the UK and the GCC,” says Jones. “While a further reduction in tariffs will certainly be beneficial, I think we will see the main benefit being the removal of regulations that impede the flow of business between both markets. This benefit could potentially be felt across all sectors.”
The future is bright for the relationship between the UAE and UK – and this is good news for the global digitalisation and decarbonisation outlook.
“I think COP28 will act as a great stimulus for UK-UAE collaboration in energy transition and decarbonisation across all sectors,” says Jones. “The UAE-UK Business Council is currently running a campaign on decarbonising the built environment and the exchange of ideas between the UAE and UK participants in the campaign group has been inspirational.”
UK businesses looking to expand overseas can learn more about opportunities in Abu Dhabi by downloading the whitepaper.