We have become so accustomed to talking about the Small and Medium-sized Enterprise (SME) sector that it is easy to forget that the numbers aren’t small at all.
A sector suggests a defined part of the economy, something sitting alongside the larger, more important machinery of business. But in Dubai, that description is becoming increasingly difficult to defend. Across the UAE, SMEs contribute 63.5% of non-oil GDP and account for roughly 94% of companies. That is not a niche within the economy – it is the overwhelming majority of businesses operating in it.
And if that’s the case, we need a different way of thinking about them.
The majority economy
Does the choice of terminology really matter? Yes, because language shapes policy. Once we describe something as a “sector”, it becomes very easy to treat it as a category that needs special programmes, special funding and special attention. We build an SME desk in the bank, an SME procurement initiative in government, and an SME support programme somewhere else.
These can all be useful things. But the parameters can also be restrictive, reinforcing the idea that small and medium-sized companies sit outside the main economy, rather than forming much of its operating fabric.
And that is neither accurate nor useful as Dubai moves into its next phase of growth.
Small does not mean marginal
The typical picture of an SME can be misleading. It might be a small retailer, a family-owned business or a young technology company with a handful of employees. But it might equally be a specialist logistics provider, a software company serving multinational customers, an engineering consultancy, a professional services firm or a manufacturer supplying much larger businesses.
The number of employees tells us the company’s size, but not necessarily its economic importance. That is particularly relevant in an economy like Dubai's, where so much activity is built around networks of companies rather than a handful of dominant industrial corporations.
Large companies create demand, but SMEs often fill it. A major development creates opportunities for architects, engineers, technology providers, contractors, consultants, caterers, logistics companies, marketing agencies, specialist manufacturers, and hundreds of other businesses.
The large company may get the headline, but the economic activity is distributed much more widely. This is why the language of “supporting SMEs” can sometimes undersell what is really happening. Instead of asking how to help small businesses survive, the real question is how to enable the majority of businesses to participate in the economy as effectively as possible.
The problem is what happens downstream
If SMEs are the majority, why do so many of the systems around business still appear to work best for larger companies?
Take banking. Access to finance has long been one of the most persistent challenges facing SMEs across the region. EY research into MENA SME banking found that less than 10% of lending goes to SMEs, despite their economic importance. Its research also found that many smaller businesses want faster access to credit and more useful advice from their banks. That suggests a mismatch.
The problem is not necessarily that smaller businesses are inherently difficult to assess –traditional lending models may not be good at understanding them. A large company has an established balance sheet, years of financial history and assets that are relatively easy to evaluate. A younger business may have strong revenues, growing customers and a compelling market position, but less conventional collateral and a much shorter history.
Technology is beginning to change this. Better access to real-time transaction data and digital financial records gives lenders the ability to assess businesses beyond traditional measures. EY has argued that richer data and technology can support faster, more informed SME credit decisions. Instead of asking small businesses to look more like large businesses before they can access capital, financial institutions can start getting better at understanding how smaller businesses operate.
The same principle applies to procurement. Large organisations naturally build procurement systems around risk, compliance, scale and efficiency. The trouble is that these requirements can unintentionally exclude smaller suppliers, even when those suppliers have the expertise or capacity to deliver the work. Smaller businesses need systems that recognise a wider definition of capability. After all, a company does not become a better supplier simply because it has 500 employees instead of 50.
D33 changes the stakes
Those future global companies have to come from somewhere, and they are unlikely to appear fully formed. They start as businesses that are relatively small and, in many cases, still figuring out their markets, products and business models.
That makes the SME environment an essential part of the D33 growth pipeline. The objective should therefore be more far-reaching than simply creating new businesses. Dubai also needs to become exceptionally good at helping promising businesses move through the stages of growth. That means thinking about the journey from start-up to SME, from SME to scale-up, and from scale-up to international company.
Being an SME is neither the starting point nor the destination. It is the bridge.
The majority economy needs room to grow
There is another reason to rethink the way we talk about SMEs. We sometimes celebrate the fact that almost all businesses are small or medium-sized as though the objective is simply to keep creating more of them. It isn't.
A healthy economy needs a constant supply of new businesses, because some will fail, some will remain small and successful, and some will grow into much larger companies. The important thing is that the system allows all three outcomes.
That means creating an environment where a founder can move from a five-person company to a 50-person company without encountering a completely different set of institutional barriers.
It means making finance, procurement, regulation, talent and market access work across the growth journey, rather than treating each stage as a separate problem.
Dubai has already recognised some of this. Its International Growth Initiative, for example, has allocated AED 500 million to help Dubai-based SMEs expand into international markets, explicitly linking SME growth with the objectives of D33. That is the right direction. The next step is to make the underlying ecosystem work in the same way. Operators such as Meydan Free Zone are part of that infrastructure, offering flexible, scalable licensing structures that allow founders to establish, adapt and grow without having to navigate a completely different environment at every stage.
We need to stop thinking of SMEs as the exception
There is nothing wrong with the term SME. It is useful for measurement, regulation and policy. The problem comes when the label starts shaping our assumptions. If almost all businesses fall into a category, that category is no longer a small corner of the economy. It is the norm.
Dubai does not need to be persuaded that small businesses matter – the numbers have already settled that argument. But have the institutions really caught up with this fact?
Can banks assess them according to how modern businesses actually operate? Can procurement systems recognise capability rather than simply scale? Can promising companies move from local success to international growth without having to navigate a completely different economic environment at every stage?
If Dubai wants to reach the ambitions set out in D33, those questions need answers. Because the next phase of Dubai's growth will not be built only by the companies that are already large. It will be built by the thousands of companies that are still determining where they will ultimately fit in.
Perhaps it is time we stopped calling them the small business sector. They are the majority economy.
