Digital infrastructure one of the main drivers of FDI into Dubai in Q2 2017
Data processing, hosting, and related services return to top five sectors, highlighting Dubai’s readiness for the digital economy
Tuesday 27 March 2018
Investments in hard and digital infrastructure, across multiple sectors, were the main drivers of FDI into Dubai in the second quarter of 2017, the latest available data show.
Data processing, hosting, and related services were back in the top five sectors from Q4 2016, highlighting Dubai’s readiness for the digital economy. As many as 67 percent of all FDI projects in Q2 2017 were in the high and medium technology domain and accounted for 14 percent of total FDI capital coming into Dubai in the quarter. The Smart Dubai Office estimates that its open data initiative will add USD 2.8 billion to the economy by 2021.
The top sectors by FDI capital accounted for 95 percent of total FDI inflows and 35 percent of total projects in Q2 2017. The construction sector received the largest inflows from the top source countries. Digital infrastructure continued to receive consistent investment.
These infrastructure investments are catering to the demand for a more diverse project base as has been evident in previous quarters.
The top five source countries by FDI capital accounted for 88.3 percent of all FDI flows into Dubai and 60 percent of all FDI projects. The US and the UK continued to be the top investors for a fourth quarter in a row and accounted for 31.7 percent of high and medium technology FDI projects in Dubai. They were followed by India, France, and Germany.
Three out of these five countries are also ranked among the top ten in the Global Innovation Index 2017, which is an indication of Dubai’s high attractiveness as an investment destination for innovative, future-oriented companies. Market access and growth opportunities are additional important factors cited by companies in choosing Dubai as a hub of operations.