Dubai Silicon Oasis to act as VC to help R&D startups

The region should look at developing engineers who write software rather than focusing only on IT professionals, says DSO technology chief. (EB FILE)

Dubai Silicon Oasis (DSO) wants new companies moving to the high-tech free zone to set up research and development (R&D) and design centres rather than just sales and marketing offices.

This will encourage local hiring of talent and development of products, according to Ray Milhem, Chief Technology Officer (CTO), Technology Investment at DSO.

The DSO houses 180 companies and is expecting further arrivals this year. The UAE's innovation hub last year launched a venture capital (VC) fund that will invest in potential startup companies in the Arab World and beyond.

Milhem told Emirates Business that DSO wants to be a VC company in addition to welcoming other investment companies in the region.

What are you doing to turn the technology park into an R&D hub for the region?

We have a two to three-year strategy. The model is based on that of Silicon Valley in California and basically involves an increased focus on working with universities, especially on computer science, and attracting large corporates such as IBM, Nokia and Motorola to our premises.

The region should also look at developing software engineers who write software rather than focusing only on IT professionals. Entrepreneurs must be encouraged and the incubation of startups is another area of potential opportunity. These should be connected to universities, which will encourage the setting up of companies such as Maktoob. A VC environment will help these startup companies to evolve and get funding for growth. This encourages companies to set goals such as building cellphones or even becoming the next Google.

China and India are good examples where there are startups and incubators. DSO has started at a modest level and works closely with the government to model ourselves on Singapore, where technology parks have been built with government funding. The next stage at DSO is about attracting companies that are interested in setting up R&D centres. This will add value by boosting the hiring of talent locally, increasing the number of skilled jobs and encouraging technology transfer.

What are you doing to incorporate these factors into the ecosystem?

The ecosystem already involves partnerships with the American University of Sharjah and Sharjah University, which provide a base for students and projects. With university education programmes and startups, the platform is available. Dubai Circuit Design (DCD), Sphere Networks and Silica are examples of the success of this strategy, companies that are active in designing technology products. We want to go to the next level by setting up a design centre and hiring engineers.

Would this involve supporting other venture capital companies?

DSO is looking at making connections around the globe and at the same time conducting due diligence. We are constantly talking to management teams, understanding the product and seeking revenue to invest in the ecosystem. DCD, which is 100 per cent owned by DSO, is an example.

We may invest in design centres and also focus on writing software and creating jobs. These startup companies can then take on projects for, say, etisalat or Dubal not just to sell products but to test and deploy them. It is a risk but DSO will look at attracting startup companies even from outside the Middle East, from as far away as India.

Do you want these companies to open offices and R&D centres at DSO?

Yes, we want them to come, open offices and centres. In cases where they need to obtain funding from the UAE and the Arab World, DSO could be a VC partner and provide partial funding or fund a project completely. We want to play the role of a strategic investor. We don't have a product but our premises can be used by VC companies that interact with companies in the region. When VCs set up offices, analysts will also be hired along with investment experts. DSO wants to be a VC company in addition to welcoming other investment companies in the region. This is line with our strategy to set up a fund for startup companies.

Would you look at certain geographic areas for investing?

We want to be a global investor and therefore would look at Europe, the US, Canada and India. Even in the Middle East, maturity has occurred, which is why global companies like Intel are also investing in the region.

Are VC funds looking at investing outside the UAE or only within the country?

The VC world is complex and a certain level of specialisation is required. The VC environment was focused on Jordan, Egypt and Lebanon. North Africa, Tunisia, Algeria, Morocco and Libya, to some extent, are potential areas for investment. Over time, the calibre of Arab talent will improve as universities and other institutions move forward.

Do you expect to see new engineering universities in the region?

We cannot have another university other than RIT Dubai on the campus.

How do you see the technology landscape evolving in the UAE and the rest of the region?

Technology adoption in the Middle East has been growing, but at a slower rate than in global markets. This is mainly because this process is complex and still has a long way to go. There are seeds of technology investment in the region. Every Arab country is different. There are R&D centres in Tunisia, Morocco and Egypt with 200 to 300 engineers. Currently, there are 180 companies at DSO and it's no longer just a sales and marketing hub but has startup companies and others looking at manufacturing and assembling.

 

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