Why so few UAE SMEs become major companies

Small and medium-sized enterprises (SMEs) account for more than 95 per cent of businesses in the UAE and contribute over 60 per cent of the country’s non-oil GDP, yet relatively few scale into large private companies, The National reports. In a Business Extra episode hosted by Salim A. Essaid, two guests — Karolos Travassaros, chief portfolio officer at the Emirates Growth Fund, and Jen Blandos, founder and chief executive of Female Fusion — explored why many UAE firms stall after the start-up phase and what might help them bridge the gap to become sustainable midsized and national champions.

"Starting a business is much easier than scaling one, and in some cases, even easier than closing one."

That observation, often repeated by founders, underlines a pattern contributors to the podcast say is familiar across sectors. As firms grow beyond founding teams, they encounter a consistent set of barriers that slow or stop expansion. Guests on the show described a combination of financial, operational and market dynamics that create a so‑called "missing middle" — the space between early-stage start-up funding and the patient capital needed to build larger enterprises.

• Access to growth financing: Travassaros outlined the need for more tailored capital structures, noting the role of the Emirates Growth Fund in addressing the "missing middle" and the potential value of "patient, minority capital" to help SMEs scale without losing founder control.
• Delayed payments and cash flow pressure: The podcast highlighted how late receivables can choke expanding operations, forcing firms to divert time and resources from strategic growth to day-to-day survival.
• Operational complexity: As companies add staff, systems and markets, operational demands increase, pulling founders away from product and market development and toward administration and compliance.
• Competition for contracts and talent: Smaller firms often struggle to win large contracts and to attract and retain skilled employees when competing with established incumbents.

Jen Blandos, drawing on 17 years as a business owner in the UAE and her work with Female Fusion — a community for women entrepreneurs — described "structural frustrations" that amplify these challenges for many company founders. The podcast framed these frustrations as not only a matter of capital, but also of market access, procurement practices and talent pipelines.

Looking ahead, the conversation on Business Extra focused on practical steps and adjustments that could increase the number of UAE‑founded firms that survive and thrive as midsized and larger private companies. "So, while the UAE has built a strong start-up culture, the next challenge is helping more of those businesses grow into sustainable midsized companies," the programme concluded, pointing to the need for coordinated solutions from investors, industry and policy-makers.