Zoning out

Dubai Internet City — the heart of the emirate’s ICT development plans — has kicked off an expansion programme to create much needed space in its technology park and four more free zones abroad. Richard Agnew reports.

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By  Richard Agnew Published  September 25, 2005

Zoning out|~|38-43-DIC-Pic-200.jpg|~|AT THE HELM: DIC executive director, Jamal Abdul Salam, says the technology park is ahead of target. |~|JAMAL ABDUL SALAM, THE executive director of Dubai Internet City, (DIC) has a surprising admission to make. The boss of the emirate’s thriving technology park wants to expand the management team that oversees the free zone, but he’s run out of room. “We’ve can’t find the space internally,” he says. “I want more, but we don’t have it,” he adds. Abdul Salam, who was appointed executive director two months ago but has been with DIC from its inception, is facing the same problem many companies looking to set up in the park are experiencing — space in the development is now at a premium. Rents were increased at the start of this year, and 2005 has already seen DIC reach the business development targets it set out when it launched five years ago. Shortly, therefore, its management is expected to announce a significant expansion of the technology zone’s facilities, through which a large amount of office space will be made available in high-rise towers currently being built alongside the existing complex. New hotels and apartment buildings are also in the offing, including two new properties announced recently by Marriott International, which the hotel chain says will be ready by 2008. “We have achieved the goals we aimed to achieve in 2007 already,” Abdul Salam says. “Today, more than 700 ‘business partners’ work within the community,” he adds. All this hasn’t done any harm to Dubai’s effort to shift its economy away from sources of revenue that rest directly and indirectly on oil, and onto sustainable sources of income. The creation of DIC — as well as other technology park initiatives in the Middle East, including Egypt’s Smart Villages and Jordan’s CyberCity — was seen by the emirate's government as a quick way to seize the vast opportunities that ICT offers for economic development, encourage the formation of knowledge-based businesses, and create more opportunities for local employment. “Typically, technology parks stimulate and manage the flow of knowledge and technology among universities, R&D institutions, companies, and markets; they facilitate the creation and growth of innovation-based companies through incubation and spin-off processes; and they provide other value-added services together with high-quality space and facilities," said management consultancy, Booz Allen Hamilton in a recent report that recommended other Middle Eastern countries take a similar approach. Having proven its business model, Abdul Salam says the venture is now looking to go one step further and launch a series of similar developments abroad. He says DIC is in talks with authorities in India, Pakistan, Iran and Malta to set up free zones in the four countries, offering the low-tax regime and high-tech telecoms and IT systems its tenants benefit from back in Dubai. “We aim to do something similar to what we do here in DIC in each of the locations —nothing less,” Abdul Salam says. “We also want to have the freedom to operate and the self-sustainability. DIC is a one-stop shop. All services are provided under one roof — this is what we aim to have in each location,” he adds. Although the exact level of funding needed to support the international expansion has yet to be worked out, Abdul Salam says each venture will approach the US$700 million spent to establish DIC in October 2000. Discussions on the Malta, Iran and Pakistan developments are still at an early stage, so first up among the new ventures is likely to be DIC's first foray into India. The planned development — tabled for the southern port city of Kochi following a recent memorandum of understanding (MoU) signed by DIC and the government of the southern state, Kerala — follows a series of talks that began over 18 months ago. This is partly because leaders of Kerala’s opposition communist party have claimed that the state will lose out financially from the deal, as Kochi’s existing Infopark facility, which earns some US$1.6 million per year in rent for the government, will be taken over by DIC and merged with its own park. Unsurprisingly, Abdul Salam doesn’t want to get involved in the wrangle. “We are a group of commerce-oriented people, we aren’t involved in politics,” he says. “We don’t understand politics. When people ask us, we say, ‘if you have an issue, keep us aside. When you have a deal, tell us and we will sign it,’” he adds. While the agreement will obviously give DIC an opportunity to exploit India’s booming technology industry and benefit from low labour and land prices during the construction of the development, Abdul Salam also points to advantages its hosts are likely to reap from the venture. He says that part of the framework set out by the MoU — which is still to be progressed into a concrete agreement — stipulates that the park will employ 33,000 people within the first seven years, and 75,000 once the whole 100,000 acre development is complete over the longer term. DIC’s existing tenants, he says, could also use Kochi — recently ranked second in a study of the best locations for IT service providers in India by Nasscom, an outsourcing industry body — as a springboard into the Indian market. “We've done research and some of the companies that are using DIC as their headquarters also have bases in India, but need to have infrastructure that's on a par with what they have here,” Abdul Salam says. “Our business partners have told us that if we can build that infrastructure there, they would invest in India and Iran and other countries on a much bigger scale. They have the employees they need at the moment, but the infrastructure needs to be developed." He adds: “India’s infrastructure is not on the same level of Dubai’s. For companies like Dell and Microsoft, redundancy is essentially. Let’s be frank, blackouts occur regularly in India so we are trying to offer sustainable infrastructure that these companies can benefit from. Indirectly, India will also benefit from it as well." The new business parks aren’t the only way in which DIC is looking to expand its reach internationally, and pave the way for its tenants to do the same. It recently joined a grouping of similar ventures from Europe, the US and Asia — the Smart Community International Network (SCIN) — through which it hopes to improve and expand the services it offers to companies who have set up in its development parks. Abdul Salam also reveals that the group has just launched a programme to establish a network of support offices internationally, which will offer its customers various forms of aid when they are looking to break into new markets. The initiative started at the beginning of August with the opening of DIC’s first international office in the Chinese city of Shenzhen — a move which Abdul Salam says will provides a “gateway" for DIC and its clients to explore business opportunities in the fast-growing market. The office, he says, will serve as a procurement platform for acquiring equipment from the region, as well as provide free services such as temporary office space, PCs, internet access, phone and fax, mobile SIM cards, and printing and copying facilities. The branch has also been set up to provide assistance for companies needing to find relevant contacts in China, as well as for handling meeting logistics, facilitating meetings and organising interpreter services. Further down the line, Abdul Salam says DIC is considering the establishment of other branches in the country and the rest of the world. “We are hoping to grow [the China] office and we are thinking about opening other offices. We have not yet decided on the locations but the concept is being studied,” he adds. ||**||

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