I’m often asked which region I believe is most likely to drive the next great wave of innovation and entrepreneurship – an area with a visionary ecosystem that will support and propel the momentous change in business, technology and social interaction we’re likely to see in the next decade.
The model that immediately springs to mind is, of course, Silicon Valley, home to many of the world’s largest tech corporations and thousands of startups, accounting for a third of all venture capital investments in the United States.
There’s certainly a lot to learn from this model, but the most insightful question to ask in our rapidly changing geopolitical and socioeconomic environment is this: which region is pushing the boundaries in a way that exceeds anything we’ve seen before?
The key to answering this lies in understanding the shift in priorities among global entrepreneurs and venture capitalists. No longer focused solely on traditional spheres of influence, they are actively seeking geographical areas that offer integrated, state-of-the-art operating environments created to support an entirely new generation of enterprises.
For those who want to tap into dynamic, high-growth markets that meet these criteria, there can be little doubt: the Gulf region stands out as one of the world's most business-forward areas.
Future-fit innovation
Strategically located at the crossroads between Asia, Europe and Africa, the Gulf is a natural trade and logistics hub that’s rapidly becoming known as the ultimate smart location for business.
Unlike Silicon Valley, where infrastructure is mature but ageing, where barriers to entry are high, where complex ownership structures are often required, and where taxes can be prohibitive, the Gulf states are taking the post-World War II innovation model a step further, creating a smart, future-fit operating environment designed to support quick-thinking investors, adventurous startups and business growth.
National strategies are driving this innovation. Initiatives such as the UAE’s ‘We the UAE 2031’, Saudi Arabia’s ‘Vision 2030’ and Qatar’s’ Third National Development Strategy’ (NDS3) define an integrated approach to social and economic development supported by progressive legislation for new businesses and sectors. They also align with the UN’s Human Development Index and objectives, including safety, food security, sustainability, technological innovation, education, quality healthcare, and cybersecurity.
Supported in this way, cities like Dubai and Riyadh have become innovation hubs characterised by progressive policies, world-class infrastructure and a growing culture of entrepreneurship.
In 2024, for instance, Dubai surged towards tech supremacy by helping to launch or scale 1,210 digital startups, a 120% increase on the previous year, when the startup ecosystem here reached an estimated value of USD 23 billion (AED 844 billion). By the end of 2024, there were over 5,600 startups registered across the UAE, including more than 550 fintech companies. And not only are these startups growing locally, they’re attracting international recognition and funding from top global investors.
This rise of the Gulf as a business and tech hub is no accident. A key feature of the region’s development push is that government entities and institutions collaborate with the private sector to drive innovation and development. And rather than regarding government as an encumbrance, the private sector values its support for a range of desired outcomes, including making the Gulf attractive to foreign investment.
Government also spearheads the development of the high-quality infrastructure essential to business success. State-of-the-art ports, airports, and logistics networks have been specifically designed to meet the needs of contemporary businesses, integrated into smart cities driven by digital services.
The Gulf factor
Significantly, the six countries that make up the Gulf Cooperation Council (GCC) all have free zones – designated areas that offer businesses a simplified, pro-growth environment. These operate under independent regulatory frameworks designed to attract foreign investment, global talent and visionary companies.
The UAE’s free zones – and there are nearly 50 here – lead the way in terms of variety and ease of doing business. Many of these are sector-specific, giving fintech, trade, manufacturing or remote-first startups an ideal place to operate. In contrast to the regulatory requirements in many other countries, companies operating in UAE free zones can be fully foreign-owned, bypassing the need for local partners. They also benefit from highly favourable tax regimes and, in some cases, exemption from import and export duties.
Given these advantages, it’s no surprise that the Gulf is a magnet for startups, especially as governments are actively investing in tech hubs, incubators and accelerators, crafting what may be the most favourable conditions small businesses have ever enjoyed. This is because private sector expansion is key to national ambitions in all six Gulf countries, with leaders looking to entrepreneurs and small businesses as engines of economic growth, job creation and innovation.
Funding is also widely available. The Gulf’s sovereign wealth funds, which continue to dominate the global SWF landscape, had more than USD 12 trillion in assets under management (AED 440 trillion) by the end of 2024, accounting for more than 40% of global SWF equity.
Opportunities for investors
There are also many options for those who wish to enter the market without launching a new entity. For example, investors have the option of making equity investments in Gulf-based start-ups through dedicated accelerators. They can also acquire companies that already have licences in place or enter into joint ventures with local companies.
Particularly attractive for high-net-worth and ultra-high-net-worth individuals is the fact that both the UAE and Saudi Arabia offer family office licences. These enable the establishment and operation of dedicated offices to manage the financial affairs of wealthy families that have at least USD 50 million in investable assets.
A haven for startups
The ecosystems that countries in the Gulf region have established to nurture, fund and scale startups are maturing. Funders, from sovereign wealth funds to venture capitalists and family offices, are looking to support entrepreneurs, while regulatory fine-tuning is creating new openings for smaller companies that have previously struggled to compete.
This year, for instance, the Abu Dhabi Executive Council approved a USD 3.54 billion (AED 12.9 billion) digital strategy for 2025–2027, making the UAE the first government aiming to fully integrate AI into all digital services by 2027. The plan targets full automation, sovereign cloud adoption and a USD 6.53 billion (AED 3.9 billion) GDP boost, which is projected to create 5,000 jobs. In addition, massive infrastructure, energy and technology projects are having a spinoff effect for local businesses and specialised service providers.
In short, the entire trading environment in the Gulf works strongly in favour of innovative startups that have the potential to be the business leaders of the future.
