The UAE Ministry of Economy and the Swedish Ministry of Enterprise and Innovation have signed a memorandum of understanding envisaging wide-ranging cooperation between the United Arab Emirates and the Kingdom of Sweden in the spheres of innovation and research, and seeking to develop and strengthen small and medium enterprises.

The agreement, consisting of 15 clauses and covering the period of three years, is aimed at building a long-term strategic alliance between the two sides.

The MoU was signed by Sultan bin Saeed Al Mansouri, UAE Minister of Economy, and Mikael Damberg, Sweden's Minister of Enterprise and Innovation, at the Federal Government stand in GITEX 2015.

The MoU reflects the desire of both countries to set up a reciprocally beneficial network of business cooperation for young entrepreneurs running small and medium enterprises. This is in addition to cooperation in the exchange of knowledge and expertise among relevant government departments, including ‘Business Sweden' -the Swedish Trade and Invest Council and ‘Vinnova', Sweden's innovation agency and the relevant UAE bodies such as the SMEs Council, SME Fund, and chambers of commerce and industry.

The agreement will look into preparing a work plan to identify further areas of cooperation as well as to encourage government entities, business development centres and private sector organisations to set up joint projects among SMEs focusing on technological innovation.

The agreement will also facilitate access to sources of funding and help SMEs explore viable market opportunities. The MoU will enable exchange of information on intellectual property rights pertaining to SMEs in both the UAE and Sweden.

The agreement will also explore the possibility of cooperation for purposes of building networks of communication and brokerage business between important stakeholders involved in innovation initiatives such as companies, academic and research institutions and business development firms, particularly those involved in the SME sector. The agreement will enable mutual coordination among various government departments to remove the commercial hurdles facing SMEs. The agreement also proposes the exchange of knowledge and study groups.

The MoU envisages closer interaction among government, academic and private sector organisations in both countries on a regular basis. Another key aspect is the inclusion of social responsibility as an integral part of all partnerships developed as a result of this agreement.

Minister Al Mansouri noted that the MoU was consistent with the directives of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, and in line with the UAE Cabinet's announcement of 2015 as the UAE Year of Innovation.

Al Mansouri said: "This MoU is part of our efforts to actualise the National Strategy for Innovation that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, launched last year. The vice president has stressed the need for deepening a culture of innovation nation-wide. This vision reflects the Ministry's own strategy to expedite the process of transition to a knowledge economy based on creativity and innovation in tune with the UAE Vision 2021 that seeks to enhance the country's global competitiveness and economic sustainability."

The UAE minister of economy pointed out that the importance of the MoU lay in the fact that it focused on three areas of paramount importance for the country, namely, innovation, SMEs and research and development.

He said: "These are areas that form the strategic pivot of the wise leadership's determination to make the UAE a leader in many fields. Innovation is not a choice, but an imperative for any country trying to consolidate its position in the global economy. The UAE realised this early on and included innovation among its goals as far back as in its Vision 2012."

He added: "Last year, His Highness Sheikh Mohammed bin Rashid Al Maktoum launched the National Strategy for Innovation. The strategy included 30 initiatives to be implemented in three years. Covering seven sectors - energy, transportation, health, education, technology, water and space, the strategy proposed the setting up of the National Innovation Committee to convene a number of federal entities to work together on the execution of the National Innovation Strategy and to involve the private sector in the drive."

Many public sector and private sector organisations have already commenced the establishment of innovation and development centres to organise economic and academic activities focused on innovation. The Minister pointed out that the Global Competitiveness Report 2015-2016 issued by Davos Forum has highlighted the UAE's consistently preeminent position among top innovation-based economies of the world.

He said: "This list includes some of the strongest economies such as Switzerland, Germany, Singapore, and the United States of America. Cooperation with friendly countries like Sweden will help us retain our leading position on the world economic map."

Al Mansouri further pointed out that SMEs played an important and contributory role in the national economy. They were integral to the UAE's efforts to achieve sustainable development, and helped enhance the country's global competitiveness, while also supporting its transition to a knowledge economy based on creativity and innovation."

The promotion of SMEs and encouragement of young entrepreneurs is also part of the UAE's efforts to diversify its economy. SMEs currently constitute 94% of companies operating in the UAE, and contribute around 60% of the country's GDP. The UAE government is looking to take this figure to 70% by 2021. In this context, strengthening cooperation with other countries with respect to SMEs is crucial to the UAE's economic sustainability objectives.

For his part, Mikael Damberg, Swedish Minister of Enterprise and Innovation, said: "This Memorandum of Understanding is an important bilateral partnership. It will add a new and collaborative dimension to the relations between our countries. This year has been declared as the Year of Innovation in the UAE, which Sweden – as a country of creativity and innovation - strongly supports and encourages."