Abu Dhabi to Expand Media Hub in Effort to Diversify Economy
(Bloomberg) -- Abu Dhabi’s media free zone twofour54, home to the regional headquarters of Ubisoft Entertainment SA and CNN, is aiming to triple the size of the emirate’s media industry over the next decade, as part of ongoing efforts to diversify the oil-dependent economy.
“Abu Dhabi is in the process of transforming itself from a resource-based economy to a knowledge-based economy,” twofour54’s Chief Executive Officer Michael Garin said in an interview. “They’ve identified the media and digital sector as one of the drivers of that.”
The new, government-funded Yas Creative Hub is projected to add 3.5 billion dirhams ($952.9 million) to gross domestic product by 2023 and create 11,000 new jobs by 2031 in sectors like gaming and production, Garin said.
With oil revenue diminishing, Abu Dhabi, like other Gulf energy exporters, faces pressure to diversify its economy and explore new sources of revenue. Abu Dhabi is the capital of the United Arab Emirates, which includes the business hub of Dubai.
Government-backed property developer Miral Asset Management has invested $1.1 billion in Yas Bay development, of which Yas Creative Hub is a part, on Abu Dhabi’s man-made Yas island.
Twofour54, named after Abu Dhabi’s geographical coordinates, was set up in 2008. Garin, who has more than 40 years’ experience as a media industry executive, was appointed CEO in January.
Garin is also trying to attract gaming companies to grab a piece of one of the fastest-growing sectors in entertainment. The global video game industry is now estimated to be larger than film and music combined -- the sector generated annual revenue of $135 billion in 2019 and Morgan Stanley Investment Management expects double-digit sales growth by 2025.
Twofour54 has partnered with Unity Technologies SF to make Abu Dhabi the “center of the digital and gaming world,” according to Garin. Unity is the company behind video games including “GooBall” and “Angry Bots Demo.”
Garin said the center has already signed nine deals with gaming companies in the region, and is expecting to attract as many as 45 more over the next three years, creating 450 jobs.
Twofour54 has been attracting companies by subsidizing rent and offering other financial incentives. Abu Dhabi Film Commission offers a 30% cashback rebate on all productions in the emirate and Garin said Abu Dhabi is negotiating reduced school fees and building affordable housing to attract new companies.
The UAE is expected to suffer a steep economic contraction this year. Foreign workers have been forced to go home amid a wave of job cuts in the private sector and, earlier this year, Oxford Economics estimated the UAE’s population would shrink by nearly 10%.
Earlier this week, the country abolished the need for companies to have Emirati shareholders, local media reported, in a major shake-up of foreign ownership laws aimed at attracting investment into an economy reeling from the coronavirus and a decline in oil prices.
“We’re trying to build Abu Dhabi, and we’re building it by allowing these companies to build and enjoy the success of their efforts,” Garin said.
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