Economic impacts of Expo 2020 on Dubai's small and medium enterprises

¶ … Expo 2020 to Small Scale Business in United Arab Emirates

The Expo 2020 will have an enormous economic impact on the Emirate of Dubai since they won the bid to host the convention. Dubai's is a nation with an economy that is not very diverse. The country depends on several factors to keep the economy stable, and these include tourism, the real estate sector, and the financial services sector. Due to this it is understandable that Dubai's economy could easily come under heavy pressure from external factors. The 2008 and 2010 economic crisis demonstrates this point clearly as the housing bubble declined and pulled Dubai's economy down with it.

The Expo 2020 is a great benefit for Dubai since its economic implications will lift the financial sector for both Dubai and the UAE. Travelers from all over the world will come to see the Expo and is thus a great opportunity for foreign investment to grow. Another obvious perk is that these visitors will be spending very large amounts of money in Dubai. This will provide a much needed boost in the economy, specifically in the hospitality sector. Those businesses which provide accommodation for tourists and visitors will benefit greatly from the Expo 2020. Infrastructural development is also a sector that the Dubai government is hoping will grow during the event, and as a result they have invested very large amounts of money in expanding the industry for the expo (Dokoupil & Menon, 2013).

Even though the Expo 2020 comes with great economic benefits, it also carries certain financial risks with it. The most severe risk is the possibility that the other sectors of Dubai's economy will be cut across by an economic bubble. Housing prices have inflated greatly since the announcement of the expo being held in Dubai, and the stock market is sharing the same trend. Unstable and unsustainable prices are permeating Dubai's markets right now, and could eventually cause a great collapse which would lead to an economic depression (Mustafa & Crompton, 2013). This would additionally lead to Dubai ceasing to be as competitive of a city and foreign investors might choose to go elsewhere.

The build up to the Expo over the next six years will greatly benefit the SME's. Additional FDI's (foreign direct investments), skilled labor, and more business will be attracted to Dubai's increasingly competitive business arena as the Expo comes closer. An approximate number of 200,000 new businesses will be founded by 2020 (Walid, 2015). Due to this many of Dubai's entrepreneurs feel like privileged stakeholders and important agents in the government's goal to boost the national economy and create a thriving environment in which both small and large businesses can flourish. However, these industries do realize that their fate is their own and that only their own hands can help build a successful enterprise (Yahoo News, 2013). The travel industry is a big sector in the Expo as over 25 million visitors will come over the half year prior to the Expo (Dubai Chronicle, 2015)

History of Expo

The World Expo has proved to be a highly fruitful achievement throughout its history. It is a reflection of man-kinds deep understanding of economy, industry, science, technology, culture, and ethnicity. Its history is a history about cooperation, of people joining together and collaborating in order to advance civilizations industries. In a way, the Industrial Revolution really paved the way for the modern World Expo that we know today. The World Expo features various achievements held by the different participating countries. The very first expo is recognized as the one held in London back in 1851. This was called the Great Exhibition of the Works of Industry of All Nations. The event lasted for a total of 160 days and included 10 participating countries. The entire event attracted roughly 6.3 million visitors. Later, the Chicago Expo in 1993 was another defining moment in the development of the World Expo. It was held in a very historic and sensitive time in America that was just starting to emerge from the Great Depression. The city celebrated its 100th anniversary with 47 participating countries and over 38 million visitors present. A Century of Progress was the explicitly given theme that expo received, and it has become the official theme and staple of the convention. It also started the tradition of large scale companies building pavilions at the convention site. The Expo allowed for certain large businesses such as Ford, Chrysler, or GM to build dedicated pavilions. This practice became greatly appreciated by both businesses and visitors (Mohamed bin Rashid, 2011).

The first World Expo following World War II was held in Brussels in 1958. The convention took place during a time when people where still living in rubble and trying to recover from the war. Another theme was therefore added to the expo: A World View - A New Humanism. A shift to a higher focus on humanism is what this new theme symbolized. The Atomium was a huge structural model depicting atoms which became yet another symbol of this theme. The structure represented the ability man has to use power in a peaceful and safe way. This was of course a reference to the atomic bombs and their devastation towards the end of the war. Japan, a defeated country, started focusing heavily on economic revival and national development following the war. A major progress point for the country came when they were allowed to host the 1970 Expo in Osaka. This drew the attention of over 64 million visitors and 76 countries. This was by far the largest turn out throughout the World Expo history, and became a massive success for Japan and their economy. Transportation, residential communities, tourism, cultural exchanges, and business facilities all received wonderful improvements due to the success of the expo. It also marked a milestone as the first expo ever held in an Asian country (Mohamed bin Rashid, 2011).

The respecting of nature was a growing trend as the 20th century transitioned over towards the 21st. This in turn led to the expo also become significantly more environmentally concerned. Ecology and environmental protection became big issues and inclusive themes in the convention. People's yearning for peace had become intensified due to the numerous wars behind them. Because of this, the World Expo came to be viewed as many as a bridge between cultures and peoples that could eliminate conflict, provide protection, and sort out misunderstandings. The current scope of the theme led the Hanover Expo of 2000 to choose protection of resources as a major issue. This fit the line of the current trend very well. In similar lines, the Aichi 2005 Expo in Japan chose Nature's Wisdom as its theme. It reflected both global and individual attitudes and perspectives in regards to society, nature, and the future. The Zaragova Expo of 2008 followed suit with a large focus on water and the human society's dynamic relationship. The Zaragova Expo had a profound impact on the globe due to its supportive program on water and sustainability (Mohamed bin Rashid, 2011).

The 21st century Expo organizers desire to demonstrate the processes through which humans connect with nature using technology and wisdom. As in the past, the 21st century Expo will also promote peace and unity throughout the world. The World Expo will continue to have a profound impact on history and it has started with the 2010 Shanghai China Expo with the theme: Better City, Better Life (Mohamed bin Rashid, 2011).

Objective of the research/survey

The primary purpose for this research project is to examine and evaluate the implications tied to small scale businesses before and after the Dubai 2020 Expo.

Research Problem (Statement of Problem)

The problem to be studied is regarding whether or not the Dubai 2020 Expo will have negative or positive effects on the small scale businesses in the UAE.

Hypotheses

The hypothesis for this project stands as such: That the Dubai 2020 will provide positive and long lasting effects for the small business owner.

Limitation of the Study

Through have the purpose of lowering all chances of erroneous replies, Saunders et al. (2012) recommends that detailed deliberation of both rationality as well as consistency be offered by the researchers in regards to the strategy of the project. Dissimilar researches gaining similar deductions have to be taken into account when determining reliability of a study. All in all, the exactness of the computing stratagem demonstrates difficulties and quandaries present when considering the limitations of reliability (Bouma, 2010).

In support of this position and opinion, Saunders et al. (2012) claims that the apprehensions of predispositions can be connected to reliability and exists in two types. Emphasis will be placed on the plan and design of the questionnaire questions so that no prior bias of the researches will have an impact on the individual. Additionally, the researcher will seek to gain the trust of the study participants so as to avoid all suspicion of illegitimacy or of wrongful data collection.

Literature review

Tourists and investors will flock together into the region and boost the local economy which will create a tidal wave of business for small companies as well as the SME's across both the Emirates of Dubai & Abu Dhabi. This will create a large net effect of economic increase for business leaders. Consequently there are a lot more entrepreneurs and business owners looking to participate if the Expo receives its confirmation (Bailey, 2013)

Over 90% of all Dubai's registered companies are SMEs, and they represent 42% of the total labor force. All together they result in 40% of the nation's GDP (Walid, 2015). There is a more optimistic prospect in the future though if the region keeps moving forward and is managed correctly. This would create significantly more opportunities to spend and will stimulate growth of the city towards the inland and the center of the expo (Bailey, 2013)

Opportunities will increase and doors will open during the Expo 2020 that will allow medium and even small sized companies to be big winners. Tourism will skyrocket and as a result, create a huge demand for more products and services across the Emirates. This has led the Dubai chamber to expect over 245,000 new career opportunities to be created by 2023. The numbers of hotel rooms are projected to double by 2020 as the tourism sector booms to Dh143 billion by 2023. Moreover, construction sector and the tourism business will benefit as a natural consequence and so will other industries like food and beverage. Waste disposal management, goods suppliers, and transportation will all feel this increase when over 20 million visitors come over the next 6 years. Additionally, SMEs will have increased opportunity in the IT sector as well (The National Staff, 2014)

Developing competitive advantage

The emirate's strategic growth agenda directed towards the future will be the main focus of the pre-event development of the convention. The Expo 2020 will act as a stimulus in order for the business to improve their competitiveness. Additionally, a faster growth for the business community will be fostered.

Development of business

The enhancement of infrastructure, the hosting of greater employment opportunities, the increasing of global reputation for good, and the economic development of the UAE are all things that the country is set to see during the expo. The Expo's are by far the largest and most well-known events in the world, and as such it is a remarkable opportunity for businesses to embark on new endeavors, seek new opportunities, and fulfill new potential. The Expo will provide business across the nation the very best chance for not only financial development, but also for their strategic operations (IAEWP, 2013). A demand across several different sectors is expected to be seen directly over the following 6 years. This is supposedly linked to the operations, delivery, and servicing needs of the convention. Therefore it should only be natural that business will grow across the wider regions areas. Examples of businesses expected to flourish include real estate, construction, engineering, logistics, transportation, aviation, tourism, and hospitality (Algethami, 2014).

High competition in pricing and branding of products

The success of Dubai in securing the place as host for the World Expo 2020 will serve to drastically increase the job market competition. For some this will mean a huge benefit of salary raises (Maceda, 2013). Since it has been forecasted that thousands of new job are to be created, people will flood in from all over the world in hope to secure a new career. This inflation of people could result in a tough time for job seekers. The current population of the UAE sits at 9.2 million but is already expected to grow well over 12 million by 2018. Since only a rough 220,000 new jobs are projected to be created, this will cause problems of unemployment. Even though a rough road is projected in the future, the job market of the UAE is expected to become much more competitive.

Availability of funding for small business

The budget for the 2020 Expo in Dubai is solid and straightforward. It is the result of in depth financial analysis. The total budget for the convention tops at 6.4 million Euros which is spread across both long and short-term needs. The Dubai Government is also participating in adding to and financing 5.2 million Euros that is obligatory for operating expenses. These costs are expected to be recovered in full through the revenue of the conventions operations. Since much of the infrastructure and assets that are gained and built during this convention are permanent, it marks the expo as a fantastic investment opportunity for private investors. The volume of interest is already increasing dramatically as many investors are recognizing the large opportunities offered by the Expo. As part of the commitment in creating an Expo that is globally inclusive, and as an event that demonstrates the power of collaboration, a formal outreach institution will be established at a time deemed appropriate. All in all, there are many opportunities available for both private and public investors to participate and gain from the Expo 2020 (Algethami, 2014).

The result of all this is a government invested budget of at least $8bn in projects aimed at the convention which includes: infrastructure, such as seaport and airport capacity; new roads, highways; and finally a boost of water units. Additionally, the private sector will gain greatly from the event and will stimulate investors to spend in leisure, residential, commercial, as well as the hotel industry. The existing $11bn of opportunities is highlighted in the report in addition to the $6-$8bn worth of projects instigated by the government. Together they will deliver the Expo to the world (Business Wire, 2014).

The small scale business will play an important role in the economic development of UAE during Expo

Reading up on and reviewing how previous Expos have contributed in boosting the local economies of the host is a suggestion given by Ali Borhani who is the founder of Dubai based Incubeemea. Additionally she suggests visiting the Milan Expo of 2015 in order to gain a greater understanding of what the convention is and how it functions. The World Expo should be a mind-set not an event for business and corporation leaders. The convention can help millions of potential customers connect with a business or an industry, and thus the importance of a good impression can't be overstated. The most significant point for business is that they leave a solid impression with the visitors in regards to what their business strategy is, what matters most to the company, and what their key messages are. If they are successful in this endeavor it could have an immense impact on their future success (Expo Dubai 2020, 2014).

Methodology

Answering, understanding, and exploring the behavior observed and analyzing it through unstructured data is a part of what defines quality research. Numerical data is in this case dropped in favor of linguistic data. This type of research also tends to hold more bias then numerical studies do. Still, the linguistic data study seems more able to define events in actual language. Examining information straight from the source and collecting important data are both benefits of these research methods. Qualitative research includes many different strategies and methods while gathering data. It could be done through a questionnaire which involves reasoning and thought. This is one of the more efficient methods and provides first hand data from the source of our interest. They are significantly more time consuming though than numerical research (Saunders et al., 2012).

Research Strategy

Saunders et al. (2012) stated that the key components of any research strategy institution and layout clarifies the methods and processes that are used throughout the gathering of data, and this will in turn provide the researcher with assistance in achieving his or her objectives; to describe all resources necessary in the collection of information as well as the description of limitations and challenges present in the project.

The survey technique is most likely the best and most rewarding study method in a project like this. Throughout time, this method of data collection has proved to be one of the most efficacious techniques in regards to any sort of social investigation or study. Distributing questions to a specific target group or audience with well formulated questions are both ways in which this research method assists the researcher. Questionnaires and interviews are both viable methods in data collection and the researcher will have the ability to select information from both of the dissimilar techniques (Trochim, 2006). Trochim (2006) undertook a study that showed that surveys are incredibly flexible in allowing for wider responses that encompass a bigger range of information than a numerical study can achieve. This is exactly what makes the survey methodology superior and what allows it to be suitable in this form of research

Time Horizons and Research Type

The effects and implications of the World Expo 2020 that will be held in Dubai is the primary purpose of this research investigation. It is to examine the impacts of the expo specifically on small business before, during, and after the Expo has occurred. As a portion of this research is the consideration of the discernments and options of the general public without regard to gender, age, or nationality. Likewise, the general public's opinions will be considered before and after the expo as well. This is what will be accounted for when constructing quality questionnaires over a relatively short period of time, and as a result this study will become cross-sectional. The research can be defined as the examination of a specific event over a certain time period (Saunders et al., 2012). The currently known and understood progressive approaches will be taken into account for the study.

Fact-finding as well as experimentation comprises the general setting of the study, and this allows the researcher to mix the inquiries up in order to receive a more comprehensive, flexible, and profound methodology in collecting the information required to answer the study's purpose. This is vital and highly useful since it allows the researches flexibility to react to unforeseen data. A common misconception related to this methodology is that surveying often leads to nothing and has no true purpose. However, focusing in on main objectives and receiving conclusive data is one of the many strengths of this methodology (Saunders et al., 2012).

Data Collection Methods

Understanding the various features of a social setting including the philosophies, considerations, customs, and ideologies that go along with it is the intention and aim of qualitative structure according to Bouma (2010). Saunders et al. (2012) adds that the qualitative nature of the methodology allows the researcher to presume and assume the numerous unceremonious and mutual relations between the various features. They also ascertain that the viewpoints and partialities of the findings of the model being sampled is yet another thing that the researcher can understand better through the assistance of the qualitative method (Saunders et al., 2012).

The benefits of the qualitative kind of study and research have been highlighted. For instance, the researcher may, throughout the process of gathering and changing data, adapt to the constant evaluation and analysis he or she is receiving (Bouma, 2010). Another advantage that often gets overlooked is the relationship that the researcher gains with the subjects of the study, thus they can make better judgments in analyzing the data (Bouma, 2010). Finally, the significance of the qualitative layout is highlighted in the benefits it provides social arrangements as the general methods, resolutions, and predispositions held by organizations can't simply be determined through an equation (Yin, 2013).

The vital foundation for the gathering of all necessary data needed to complete the study's objectives is employed through the ideal and tentative format of the questionnaire. It has been demonstrated and proven that the format of the questions on the questionnaire is vital in the sense that they need to encompass the entire range of the research studies purpose. Additionally, designing well-thought out questions that are neither offensive nor imposing will result in a more authentic and transparent response by the study's subjects.

The questionnaires

There are three ways that the main purpose of the questionnaire is to be achieved. The first point is that the questionnaire aids the researcher in the gathering of information and all related statistics, and also that it helps provide a better awareness and insightfulness regarding the predispositions, standpoints, bias, outlooks, and philosophies held by the subject (Tuckman, 2012). Second, another way it will provide assistance is through the validation, understanding, criticism, and ascertaining of results or conclusions that have already been made, and also the ability to incorporate new conclusions into the study. Finally, the process of distributing questionnaires can be combined with many other forms of research methodology and offer up a new and wide variety of scopes and perspectives that had not previously been considered (Kerlinger, 1999). This will help the researcher gain understanding regarding as to why the subjects are responding as they are, and also what circumstances led to the conclusions of the study.

In this case, the questionnaire will be designed and used in a fashion that allows for the gaining of a more adaptable and comprehensive data that would be impossible to gain any other way. The first step in becoming familiar with the nature of a structured questionnaire is to describe them.

All subjects in the study will be given hand outs and instructions as to what the arrangement and layout of the questions are so that they can become used to the theme and accustomed to the subject being studied. The format of the questionnaire will be strict as to allow the subjects limited freedom and discretion to answer whatever and however they desire. At the end of this process a report will be created so as to perform unbiased and highly effective deductions of the information received. Also, it is vital to confirm and ensure that discretion and anonymity of the subjects be maintained since the matter is of a serious and complex nature, and also since confidentiality was requested (Saunders et al., 2012).

Sampling

The sample size for the group that will carry out this survey will be rather small. This is because of information received from Saunders et al. (2012) who states that a smaller sample group could be far more appropriate when considering context for particular backgrounds or phenomenon.

As a result of the small sample size, the study will use a more judgmental sampling method that allows the researcher to pick the most fitting subjects for the study (Saunders et al., 2012). Sampling in this way allows for the creation of a diverse and fully informational research study to be performed. The sample has not been predetermined and will only be determined after the researcher enters the field. Although, according to Saunders et al. (Saunders 2012), the whole population could not be considered for use in a sample.

A non-random sample may be selected in the case of certain problems arising such as workers showing an inability or lack of desire to cooperate. In that case the subjects will be chosen and identified through connections through the societal enclave, and the study will be put together with the help of societal networks.

Analyzing the questionnaire

Remember that a standardized method of quantitative techniques is not how qualitative data is gathered. The data that has been collected must be split into various categories and examined thoroughly. Again, even though there are diverse strategies, tactics, as well as research customs, there is no one method that has been standardized for analyzing qualitative data (Saunders et al., 2012).

The course of action to be taken in this study regarding data analysis is reliant upon hypothetical propositions, and that means that the study will pursue the original proposition on which the designs of the case study were founded and on which the aims and objectives lie (Yin, 2013). The first step in analyzing the data to fulfill the study's goal is to classify all information into identical orders in the same way that the theories are described in the literature review. After that in the discussion chapter an attempt to explain the purposes and questions that have been researched will be done (Saunders et al., 2012).

Following this, all of the data will be placed in and examined through theoretical structures and later analyzed in the context of how well they responded. If the researcher encounters any theories or concepts that have not been previously described in the study, they will take those theories and analyze them for further review and decide how they can best associate with the current theories.

Data analysis, data collection, and the verification and development of conclusions and relationships are processes that are both interrelated and interactive. This allows the researches to distinguish foundational themes, interactions, and relationships throughout the entire process of information gathering. Finally, the data analysis will not only be started until after the data collection is finished, but also throughout the entire survey process (Saunders et al., 2012).

Summary of results

The conclusions of the study demonstrate a close likeness to the information put forth in the literature review. 7 different demographics were considered and the results came out much as expected. In some cases though, the small sample sizes created data that is of indeterminate use and analysis. The first demographic considered was that of the subjects age. Out of all participants there was only one person over the age of 41. The majority of the subjects were between the ages of 20-25 while just a small number of individuals fit the other classifications. Gender was the second demographic and was a close call. The data ended up being a 60 to 40 ratio of men to women. Due to the small sample size and the close result we can render this piece of data as relatively inconclusive.

Third on the list was nationality which proved an overwhelming majority to be Non-Emirati. Had the classifications included specific demographics for the Non-Emirati individuals the result would probably come forward in favor of the Emirati. Nonetheless, this goes to show that the vast majority of participants at the Expo are in fact visitors from other countries.

Demographic number four deal with the education level of the participants. Here only 1 person was questioned who held a masters degree of higher. 13 individuals were at a high school education level or lower, and the vast majority was college graduates with bachelors' degrees that were to be expected.

The level of business the individual worked in was the next item on the list and gave interesting results. Out of the very top management level there was only 1 person present. The majority of participants were not middle management members either, but rather they were non-managerial employees. However, the results between the middle management and non-management individuals was so close that it is difficult to say whether or not it holds ground statistically.

Type of industry was the next demographic and proved the expected result that there was no specific majority across all sectors of business present. A small minority identified with the various classifications present, but most selected the 'other' category. This does not mean that they all work in an economic sector called 'other,' but rather that theirs wasn't listed on the survey.

The final demographic took into account the length of service the individual had given to the industry in which he or she worked. The majority of the people that participated in the study identified as having served wither between 1-7 years or 4-6 years. Either way it goes to show that most of the participants were at the relative start of their careers and had not yet found their niches in the economy.

So far all of the results have agreed with the literature review and provided expectant results in regards to the hypotheses. Most of the participants were young and had not worked in their respective industry for long. Thus it seems as if most participants were looking for a bright new career or a new way of upgrading and improving their current situation. Other demographics such as the gender and nationality does not carry much impact other than showing that all kinds of people from all over the world are willing to come to the Expo in hopes of a better future. Likewise, that most visitors are not members of top management goes to show that the people who visit the expo are most likely young hopefuls wishing to improve their career and climb the bureaucratic ladder.

At this point it seems as if all of the results were in line with previous expectations. Not only did the demographics fit previous information, but most of the survey questions did so as well. All questions received powerfully strong 'Agree' or 'strongly agree' responses. Some of the questions like question 1, 2, and 6, all received strong neutral responses which does contradict the literature review in a way. The question with the most neutral responses related to the ability of small business to receive funding. However, hardly any negative responses were given and the expo seems like an incredibly positive experience for both the business and the employer.

Conclusion

The hypothesis that the Dubai 2020 Expo will provide positive and long lasting effects for the small business owners seem to have been proved in this study. The methodological approach involved a well-composed study that took into account all aspects of the wide range of information we were seeking. Employers from all demographics have reported their immense positive outlook and that their business will grow as a result from the expo. Additionally, there was hardly any evidence to contradict the hypothesis. The only doubtful pieces of information were the large number of neutral responses held by many of the participants of the study. So after considering both the methods, limitations, as well as the procedure of performing the study, we can say clearly that the World Expo of 2020 in Dubai will be not only a positive experience for businesses, but will help small companies to grow.

Recommendation

Due to the results and conclusions of this study, it is recommended first that small businesses do what they can to participate in one of the World Expos in order to increase business, revenue, and growth. This will allow for future expansion and permanent success as a business.

Also, recommendations for future studies are definitely given. One of the greater limitations faced by this study was the small sample size. Also, the qualitative nature of the research allowed for human bias and opinion to potentially pollute the data. It is therefore recommended that future studies take these things into account and create larger scaled numerical studies that seek to find the actual results regardless of human emotion. Just because an individual may have had a positive outlook about the expo does not mean that their business will reflect that. An actual quantitative study would be beneficial in determining the real success of small businesses that participate in the convention.