The United Arab Emirates (UAE) has long been recognized as a global hub for trade, commerce, and innovation. With its strategic location, world-class infrastructure, and business-friendly policies, the country has attracted investors and entrepreneurs from around the world. However, in recent years, the UAE government has intensified efforts to diversify its economy, reducing dependence on oil revenues and fostering a more stable and resilient economic framework.
As part of this broader vision, the government has introduced several strategic initiatives to enhance economic sustainability. One of the most impactful programs in this regard is the In-Country Value (ICV) Program. This initiative is designed to stimulate the growth of local industries, encourage foreign investments, and generate employment opportunities in the private sector. By prioritizing businesses that contribute to the local economy, the ICV Program aims to create a more self-sufficient and diversified economic structure.
The significance of the ICV Program lies in its ability to support homegrown enterprises while also attracting multinational corporations to establish and expand their operations within the UAE. By offering incentives and advantages to companies that prioritize local procurement, workforce development, and manufacturing, the program ensures that a significant portion of business activities directly benefits the national economy. This not only strengthens the supply chain within the country but also fosters technological advancements and skill development among the local workforce.
Moreover, the ICV certification plays a crucial role in enhancing the competitiveness of businesses operating in the UAE. Companies that obtain this certification gain preferential access to government contracts and projects, encouraging enterprises to align their strategies with the national economic goals. This, in turn, leads to increased investment in infrastructure, innovation, and research and development, further boosting economic diversification efforts.
By reinforcing a more balanced and sustainable economic model, the ICV Program contributes to the UAE’s long-term vision of becoming a global leader in various non-oil sectors, including technology, manufacturing, logistics, and renewable energy. As more businesses integrate the ICV framework into their operations, the program is expected to drive continued growth, positioning the UAE as a dynamic and future-ready economy.
What is ICV Certification?
The In-Country Value (ICV) Program was launched in 2018 under the Ministry of Industry and Advanced Technology (MoIAT) as a strategic initiative to enhance the UAE’s economic resilience by promoting local content. This program provides businesses with the opportunity to contribute actively to the country’s economic growth while benefiting from preferential treatment in government and semi-government procurement processes.
ICV certification is an official recognition that assesses a company’s contributions to the local economy based on several key criteria, including job creation for Emirati nationals, local procurement of goods and services, and investments in research and development (R&D). Companies that obtain ICV certification demonstrate their commitment to strengthening the UAE’s economy, thereby playing a pivotal role in achieving the country’s long-term vision for economic diversification.
The ICV Program not only benefits local businesses but also encourages multinational corporations to integrate more deeply into the UAE’s economic landscape. By fostering a more sustainable and self-sufficient business environment, the certification helps to reduce dependence on foreign imports while promoting domestic industries and supply chains.
The Importance of ICV Certification for Economic Diversification
The ICV certification is a fundamental driver of economic diversification in the UAE. It reinforces the nation’s efforts to transition from an oil-dependent economy to one that thrives on industrial innovation, local manufacturing, and knowledge-based industries. The certification achieves this by encouraging businesses to focus on key areas of economic development, such as local sourcing, foreign investment, employment generation, and research-driven innovation.
Supporting Local Sourcing and Manufacturing
ICV certification plays a crucial role in promoting local sourcing and manufacturing by incentivizing companies to procure raw materials, products, and services from domestic suppliers. This initiative strengthens local industries, creating a more robust and sustainable supply chain that reduces reliance on imports. By fostering a self-sufficient economy, the program enhances national resilience against global supply chain disruptions.
A significant step toward boosting local manufacturing was taken in March 2021 when the MoIAT introduced the “Make it in the Emirates” campaign. This initiative was designed to support industrial expansion and increase domestic production capacity. The ICV Program complements this effort by granting companies with higher ICV scores a competitive edge in tendering processes, encouraging them to prioritize local suppliers and manufacturers in their procurement strategies.
Attracting Foreign Investments
ICV certification strengthens the UAE’s position as a prime destination for foreign investment by demonstrating a commitment to economic sustainability and local content development. By aligning with the principles of ICV, international businesses can establish themselves as key contributors to the UAE economy, gaining long-term advantages in the marketplace.
Foreign direct investment (FDI) plays a crucial role in driving economic diversification by introducing capital, technology, and global expertise into the UAE. The country has witnessed remarkable growth in FDI inflows, with a total of $22.7 billion (AED 83 billion) recorded in 2022, up from $20.7 billion (AED 76 billion) in 2021. The ICV Program contributes to this upward trend by creating a business environment that encourages foreign companies to set up operations, collaborate with local enterprises, and invest in knowledge transfer initiatives that benefit the UAE’s broader economic goals.
Creating Job Opportunities
The ICV Program is instrumental in fostering employment opportunities, particularly for Emirati nationals, by encouraging companies to prioritize local hiring and workforce development. Businesses that actively engage in recruiting and training UAE citizens are awarded higher ICV scores, making them more competitive in securing government contracts.
This emphasis on job creation directly supports the UAE’s vision of building a knowledge-based economy while also enhancing social stability. Since the launch of the ICV Program, more than 3,000 job opportunities for Emirati nationals have been created, according to MoIAT. By equipping the local workforce with industry-specific skills, the program ensures long-term employment sustainability and career growth for UAE citizens, further strengthening economic diversification efforts.
Boosting Research and Development
Investments in research and development (R&D) are essential for fostering innovation and advancing the UAE’s industrial and technological landscape. The ICV Program actively encourages businesses to allocate resources to R&D activities, ensuring that the nation remains at the forefront of global technological advancements.
In line with this vision, the UAE launched the National Strategy for Industry and Advanced Technology in 2021. This initiative aims to enhance the efficiency of existing and future R&D projects, aligning them with high-priority industries to maximize their economic impact. By integrating R&D into the core business strategies of companies operating in the UAE, the ICV Program contributes to the growth of knowledge-based industries, unlocking new revenue streams and employment opportunities that further drive economic diversification.
Through its multifaceted approach, the ICV Program continues to be a cornerstone of the UAE’s economic transformation, fostering sustainable growth, enhancing local industry capabilities, and positioning the country as a global leader in innovation and industrial excellence.
Table 1: The Objectives of the ICV Program and their Contribution to Economic Diversification
| Objectives of the ICV Program | Contribution to Economic Diversification |
|---|---|
| Strategic localization of supply chain | Encouraging local content and creating a more robust local supply chain |
| Development of new local industries and services | Attracting foreign investment and creating new industries and services |
| Stimulating and attracting foreign investments | Encouraging foreign investment and creating new industries and services |
| Diversifying the economy | Creating new industries and services and reducing reliance on oil revenue |
| Creating valuable job opportunities in the private sector | Increasing the participation of Emiratis in the workforce and reducing reliance on foreign labor |
| Contributing to the growth of the national GDP | Increasing the private sector’s contribution to the national GDP |
| Enhancing spending on research and development (R&D) and advanced technology | Stimulating R&D and creating new industries and services |
| Increasing the private sector’s contribution to national GDP | Diversifying the economy and reducing reliance on oil revenue |
Frequently Asked Questions(FAQs)
Q: Who is presently eligible for ICV certification?
A: ICV certification is available to companies operating within the UAE that provide goods and services to government entities, semi-government organizations, and large private sector corporations. Businesses across various industries, including manufacturing, construction, trading, and services, can apply for ICV certification to enhance their market position and gain a competitive edge in procurement processes. By obtaining this certification, companies demonstrate their contribution to the local economy, thereby increasing their eligibility for government tenders and contracts.
Q: What is the validity period of an ICV certificate?
A: An ICV certificate remains valid for one year from the date of issuance. To maintain their ICV score and continue reaping the benefits of certification, companies must undergo the renewal process annually. This ensures that their contributions to the UAE’s economy—such as local procurement, job creation, and investment in research and development—remain up to date and aligned with national economic objectives. Regular renewal also allows businesses to improve their ICV score over time by implementing strategies that enhance their local economic impact.
Q: What are the benefits of ICV certification?
A: ICV certification provides several strategic advantages for businesses in the UAE, making it a valuable asset for companies looking to expand their market reach and secure high-value contracts. Some of the key benefits include:
- Increased Tender Opportunities: Companies with high ICV scores have a greater chance of winning government and semi-government contracts, as well as partnerships with large private sector organizations that prioritize local economic contributions.
- Access to New Markets: By aligning with the UAE’s economic diversification goals, ICV-certified businesses can attract both local and international clients who seek suppliers with strong local content commitments.
- Enhanced Brand Reputation: Demonstrating adherence to the ICV framework strengthens a company’s credibility, positioning it as a responsible and forward-thinking enterprise that actively contributes to national development.
- Improved Competitive Advantage: Businesses that focus on local sourcing, workforce development, and innovation gain a strategic edge in the UAE’s evolving business landscape, making them more resilient to economic shifts and global market fluctuations.
Q: What does the ICV Program do to contribute to economic diversification?
A: The ICV Program plays a fundamental role in driving the UAE’s economic diversification strategy by shifting reliance away from oil revenues and promoting a more sustainable, knowledge-based economy. It achieves this through:
- Boosting GDP Growth: By encouraging the private sector to contribute more actively to the economy, the program stimulates local business activity and increases overall national productivity.
- Job Creation for Emirati Nationals: One of the key objectives of the ICV Program is to enhance employment opportunities for UAE citizens, ensuring a skilled workforce that supports long-term economic stability.
- Attracting Foreign Direct Investment (FDI): The program enhances the UAE’s attractiveness to global investors by demonstrating a commitment to economic development, local content, and industrial expansion.
- Encouraging Innovation and R&D: The ICV framework motivates businesses to invest in research and development, leading to the growth of knowledge-intensive industries that drive technological advancements and economic sustainability.
- Developing New Industries and Services: By prioritizing local procurement and manufacturing, the program helps build new industries, strengthen supply chains, and create a more self-sufficient economy.
Conclusion
ICV certification is a key driver of economic diversification in the UAE, fostering sustainable growth by promoting local sourcing, attracting foreign investments, generating job opportunities, and stimulating research and development. The program aligns with the UAE’s long-term vision of establishing a competitive and resilient economy that thrives across various sectors beyond oil and gas.
To maximize the benefits of ICV certification, companies operating in the UAE should consider engaging professional ICV consultants. These experts can help businesses optimize their ICV scores by identifying areas for improvement, streamlining compliance with local economic contribution requirements, and enhancing overall competitiveness. By securing a strong ICV score, companies not only gain credibility in the market but also actively contribute to the UAE’s vision for long-term prosperity and economic sustainability.
