And these types of firms tend to attract and nurture high-calibre talent.

Economic free zones, with their tax advantages and other business incentives, will help to bring the economies back to full health. So far there are more than 50 free zones across the UAE and more are planned.


As Harvard academic Michael Porter wrote in 1990, clusters help to increase productivity and stimulate business because they encourage innovation. Innovation is one of the key factors driving competitiveness. The most competitive companies are usually the most innovative, and innovation occurs when there is ‘knowledge transfer’ – when people are encouraged to come together and share ideas, whether in the office, the coffee machine or a local restaurant.

I asked several people how they thought the economic free zones had benefited the region and in particular Dubai. One legal source commented that because the region’s rapid economic development has taken place on a blank canvas, the ability to plan economic clusters, rather than relying on an ad hoc approach, had drastically sped up economic development. The source also said: “Promoting clusters shows a desire to ensure competitiveness and business collaboration across all industry sectors, public and private.”

At a time when the world is becoming increasingly global, all economies are striving to remain more competitive at a micro and a macro level, and clusters are seen as a way to fast-track this development. The UAE has proved itself to be a master at it. Other countries in the region are learning from this.

Lucia Dore is the Gulf correspondent at mergermarket, part of The Financial Times Group.