UAE and UK commit to data bridge to boost $18bn trade links

DIFC

• UK-DIFC partnership on data flow enhances trade
• Over 5,000 UK companies operate in the UAE
• UK exports to UAE at £9.2bn, imports from UAE at £5.9bn 

The UK and UAE are making “significant progress” towards building a robust data bridge which experts believe will create further opportunities to develop bilateral trade.

The UK government and Dubai International Financial Centre (DIFC) said in a joint statement that they will work together to realise “the benefits of the important role that the trustworthy use of data across borders plays in international commerce”.

There are more than 5,000 UK companies operating in the UAE, many of which depend on the free and secure flow of safe data across borders, and 16 percent of DIFC’s financial service companies originally hail from the UK.

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“We are committed to pursuing a closer UK-DIFC partnership on data flows as a way of realising untapped economic growth. International data transfers underpin modern day business transactions and financial services,” the statement added.

Bradley Jones, executive director of the UAE-UK Business Council, agreed, telling AGBI: “A large proportion of trade between the UK and the UAE involves the transfer of data. A data bridge will therefore enhance opportunities for bilateral trade and investment.”

International data transfers underpin modern-day business transactions and financial services. They help streamline supply chain management and allow for financial inclusion, so that businesses in the Middle East, Africa and South Asia region with ties to the UK can scale and trade globally. 

Julia Lopez, UK minister of state for media, data and digital infrastructure, added: “Trusted data transfers can unlock huge potential for trade, investment and innovation around the world. The UAE has always been an important destination for UK businesses, and I look forward to strengthening our partnership through the free and secure flow of data in the future.”

According to latest figures from the UK’s Department of International Trade, total trade in goods and services between the UK and the UAE was £15.1 billion ($18.3 billion) in the four quarters to the end of Q2, an increase of 31 percent on the previous 12 months. 

UK Gov

Of this £15.1 billion, total UK exports to the UAE amounted to £9.2 billion, up 15.5 percent, while total UK imports from the UAE reached £5.9 billion, a rise of 65.7 percent. 

The UAE was the UK’s 23rd largest trading partner in the four quarters to the end of Q2, accounting for 1 percent of total UK trade.

Jones previously told AGBI that he is excited by a new trend – the increasingly important role that technology is playing in diversifying the UAE-UK trade relationship.

He added: “The UAE is investing in skills and technologies and as a result the kind of trade flows we are seeing are starting to look very different. Of course fossil fuels will still play a big part for a decade or so but it’s definitely changing and the likes of artificial intelligence, 3D printing and anything tech-related is going to play a significant part in this change.” 

The data commitment builds a bilateral memorandum of cooperation on Industrial and Advanced Technologies Collaboration signed last year which sought to enable greater ties between the UK and the UAE on a broad range of shared priorities, including the development of life sciences, space, hydrogen, and wider industrial sectors, including supply chain resilience, regulations and standards. 

The importance of data collaboration has also been highlighted in new research which suggests hyperscale cloud computing is expected to provide SMEs and startups in the UAE with $17.1 billion worth of economic benefits before 2030 — the equivalent of 4 percent of the country’s 2021 gross domestic product.

International Data Corporation, the market intelligence firm, generally defines a data centre as hyperscale when it exceeds 5,000 servers and 10,000sq ft.

According to research commissioned by Amazon Web Services in partnership with Dubai Chamber of Digital Economy, SMEs can generate $10.1 billion in user benefits and $7 billion in partner benefits, supported by a hyperscale regional data centre in the UAE.

The report estimates that by 2030, hyperscale cloud computing is expected to create 133,000 direct and indirect jobs in the UAE. It also reduces the country’s carbon footprint and carbon dioxide emissions by up to 78 percent and 2.2 million metric tonnes in comparison to other IT infrastructure models, in addition to reducing security incidents by more than 30 percent.

According to Essam Disi, director of strategy and policy at Dubai SME, the demand to expand cloud capabilities is there.

“Dubai is seeing a lot of tech-related startups choosing not only to be based in Dubai, but to also scale up and test their products and solutions, with soft landing services facilitating that process,” he said.

“Besides simply investment, innovative startups in Europe and the United States are also attracted by the opportunity to test the proof of concept with different demographics, as well as experiment and collaborate with the support of government entities, such as the Dubai Health Authority for healthcare startups.”

Khalid Al-Jarwan, executive director of Dubai Chamber of Digital Economy, added: “Despite its rapid progress, the UAE continues to look to the future as it pushes ahead with strategies and initiatives to fast track its digital transformation. 

“Hyperscale cloud computing offers tremendous potential for startups and SMEs in the UAE that are keen to enhance their competitiveness and contribute to a thriving innovation ecosystem.”