Skip to main content
SpringerLink
Log in

Crystallising the Dubai model of cluster-based development

  • Case Study
  • Published:
Place Branding and Public Diplomacy Aims and scope Submit manuscript

Abstract

Since the mid-1980s, Dubai has embarked on creating clusters—in the form of special economic zones—that provide both business-friendly policies and world-class infrastructure. These clusters have helped Dubai by luring foreign investment and have been a fundamental basis for economic development and diversification. Drawing on empirical evidence, this article sheds light on the Dubai experience by articulating an explorative model for cluster-based economic development. Data collected through in-depth interviews, literature reviews and scrutiny of media and policy planning documents were analysed using grounded theory to identify the main features of a particular model for Dubai, which was ultimately labelled the ‘ABS model’—where ‘A’ stands for Attraction, ‘B’ for Branding and ‘S’ for State-led development. Just as the ‘Anti-lock Braking System’ prevents a car from skidding on a wet road, the Dubai ABS model will protect the Emirate in times of economic crisis by preventing its development legacy from stalling and ultimately enhancing its economic resilience. The proposed model together with the research findings and recommendations contribute to the ongoing debate surrounding cluster-based economic development.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. It should be noted here that ranking of cluster development is based on a survey indicator. Not only do surveys employed by the World Economic Forum reports typically rely on a small number of respondents (around 100 per country), but no corrections are made to account for cross-country uniqueness. Therefore, too much should not made of survey indicators emanating from these high-profile reports.

  2. There are many names for these entities such as ‘free trade zone’, ‘export processing zone’, ‘free port’, ‘enterprise zone’ or ‘specialised zone’. For the purposes of this article, the umbrella term ‘Special Economic Zone’ (SEZ) is used to refer to all of the above.

  3. According to Hvidt (2009), nine ‘unique’ parameters characterise the Dubai development path. These are ruler-led development, swift decision-making due to the centralised institutional structure and tiny scale of the country, a flexible labour force, the creation of a service economy, internationalisation of service provision, creation of investment opportunities, supply-generated demand, market positioning and development in co-operation with international partners.

  4. For a historical review on the concept of clusters, refer to De Langen (2004) and Vorley (2008).

  5. It should be noted that decades of debate over an agreed definition for the term ‘experts’ have yet to produce a definite answer; how an expert is defined remains largely a subjective endeavour. Generally speaking, however, ‘expert’ status is attributed to people who have deep and accessible knowledge on a specific topic (Bogner and Menz 2009).

  6. Compared with neighbouring GCC states, Dubai enjoys a remarkably visionary leadership that has promoted accessible and open communication channels with its citizens (Sampler and Eigner 2003).

  7. The logo design of the World Expo 2020 event was inspired by a 4000-year-old piece of jewellery found in an archaeological site discovered in Dubai by Sheikh Mohammed Bin Rashid. “The logo represents our message to the world that our civilization has deep roots. We were and will always be a pot that gathers civilizations and a centre for innovation”, Sheikh Mohammed said. Furthermore, with a falcon-inspired design for the pavilions, Dubai has promised to deliver the most sustainable Expo site in history. In effect, Dubai seems to have heeded the prudent advice of Robert Mundell, Nobel Economics Laureate, who advocates the idea that for a brand to develop in a sustainable fashion, it must keep a close connection with its social, natural and moral principles and cultural identity.

References

  • Albeshr, H., and S. Ahmed. 2015. Service innovation by Dubai International Airport: The battle to remain competitive. Emerald Emerging Markets Case Studies 5 (1): 1–23.

    Article  Google Scholar 

  • Alkaabi, K., K. Debbage, and A. Bin Touq. 2013. The promise of the Aerotropolis model in the United Arab Emirates: The role of spatial proximity and global connectivity. The Arab World Geographer 16 (3): 289–312.

    Google Scholar 

  • Almezaini, K. 2013. Private sector actors in the UAE and their role in the process of economic and political reform. In Business Politics in the Middle East, ed. S. Hertog, G. Luciani, and M. Valeri. London: Hurst & Company.

    Google Scholar 

  • Al-Sayegh, F. 1998. Merchants’ role in a changing society: The case of Dubai, 1900-90. Middle Eastern Studies 34 (1): 87–102.

    Article  Google Scholar 

  • Anttiroiko, A. 2014. International city branding: attraction imperative, specialization and new urban brand analytics. In Proceedings of the 17th Annual International Conference of ASBBS, ed. Wali I. Mondal, 12–25. San Diego, CA: American Society of Business and Behavioral Sciences (ASBBS).

  • Ashai, Z., M. El Dahshan, J. Kubba, H. Talati, and P. Youssefi. 2007. The transport and logistics cluster in the United Arab Emirates [WWW]. Harvard Business School Website. http://www.isc.hbs.edu/resources/courses/moc-course-at-harvard/Documents/pdf/student-projects/UAE_TransportLogisticsCluster_2007.pdf.

  • Auty, R.M. 1993. Sustaining development in mineral economies: The resource curse thesis. London: Routledge.

    Google Scholar 

  • Balakrishnan, M. 2008. Dubai—a star in the east: A case study in strategic destination branding. Journal of Place Management and Development 1 (1): 62–91.

    Article  Google Scholar 

  • Baptisa, R., and P. Swann. 1998. Do firms in clusters innovate more? Research Policy 27: 525–540.

    Article  Google Scholar 

  • Barrett, R. 2010. Dubai dreams: Inside the Kingdom of Bling. London: Nicholas Brealey Publishing.

    Google Scholar 

  • Bhatti, S., J. Fung, J. Gavage, and J. Yoo. 2006. Dubai financial services cluster: Oasis or mirage? Microeconomics of Competitiveness (Spring), pp. 1–30.

  • Blaikie, N. 2000. Designing social research: The logic of anticipation. Cambridge: Polity Press.

    Google Scholar 

  • Bloch, R. 2010. Dubai’s long goodbye. International Journal of Urban and Regional Research 34 (4): 943–951.

    Article  Google Scholar 

  • Bogner, A., and W. Menz. 2009. The theory-generating expert interview: Epistemological interest, forms of knowledge, interaction. In Interviewing experts, ed. A. Bogner, B. Littig, and W. Menz. Basingstoke: Palgrave Macmillan.

    Chapter  Google Scholar 

  • Breschi, S., and F. Malerba. 2001. The geography of innovation and economic clustering: Some introductory notes. Industrial and Corporate Change 10 (4): 817–833.

    Article  Google Scholar 

  • Briguglio, L., and E. Kisanga. 2004. Economic vulnerability and resilience of small states. London: Islands and Small States Institute and Commonwealth Secretariat.

    Google Scholar 

  • Buamim, H. 2016. Global economic, outlook, impact on KSA and the role of private sector. In Jeddah Economic Forum. Jeddah, 2–3 March 2016.

  • Callen, T., R. Cherif, F. Hasanov, A. Hegazy, and P. Khandelwal. 2014. Economic diversification in the GCC: The past, the present and the future. Washington DC: International Monetary Fund.

    Google Scholar 

  • Chorin, E. 2010. Articulating a ‘Dubai Model’ of development: The case of Djibouti. Dubai: Dubai School of Government.

    Google Scholar 

  • Connell, J., A. Kriz, and M. Thorpe. 2014. Industry clusters: An antidote for knowledge sharing and collaborative innovation. Journal of Knowledge Management 18 (1): 137–151.

    Article  Google Scholar 

  • Connell, J., and M. Thorpe. 2009. Clusters, knowledge sharing and the individual firm: Focus on Dubai. In IIRA World Congress, Sydney, 24–27 August 2009.

  • Coombe, W., and J. Melki. 2012. Global media and brand Dubai. Place Branding and Public Diplomacy 8 (1): 58–71.

    Article  Google Scholar 

  • Creswell, J.W. 2003. Research design: Quantitative and qualitative approaches, 2nd ed. London: Sage Publications Ltd.

    Google Scholar 

  • De Langen, P. 2004. The performance of seaport clusters. Unpublished Ph.D. Thesis, Erasmus University Rotterdam.

  • DeNicola, C. 2005. Dubai’s political and economic development: An oasis in the desert? Unpublished BA Dissertation, Williams College.

  • Denzin, N.K., and Y.S. Lincoln. 2003. Strategies of qualitative inquiry, 2nd ed. London: Sage Publications Ltd.

    Google Scholar 

  • Dubai Customs. 2016. Dubai trade statistics. http://www.dubaicustoms.gov.ae/en/TradeStatistics/Pages/default.aspx.

  • Dubai FDI Monitor. 2015. Annual FDI results. http://dubaifdi.gov.ae/StudiesAndResearchDocument/Dubai_FDI_MONITOR_Highlights_Report_2015.pdf.

  • Dunning, J., N. Kumar, R. Lipsey, J. Agrawal, and S. Urata. 1998. Globalisation, foreign direct investment and technology transfers: Impacts on and prospects for developing countries. London: Routledge.

    Google Scholar 

  • European Commission. 2002. Final report of the expert group on enterprise clusters and networks. Brussels: European Commission.

  • Florida, R. 2005. Cities and the creative class. London: Routledge.

    Book  Google Scholar 

  • Florida, R., C. Mellander, and K. King. 2015. The global creativity index 2015. Toronto: Martin Prosperity Institute.

    Google Scholar 

  • France Soir. 2012. Tourisme médical: Le nombre de patients opérés à l’étranger explose. http://www.francesoir.fr/actualite/sante/tourisme-medical-le-nombre-de-patients-operes-a-l-etranger-explose-218283.html.

  • Frasca, A. 2011. Dubai, debt and dependency: The political and economic implications of the bailout of Dubai. Unpublished MA Thesis, University of Texas at Austin.

  • Fromhold-Esiebith, M., and G. Eisebith. 2005. How to institutionalize innovative clusters? Comparing top-down and implicit bottom-up approaches. Research Policy 34 (8): 1250–1268.

    Article  Google Scholar 

  • Gelb, A. 1988. Windfall gains: Blessing or curse?. Oxford: Oxford University Press.

    Google Scholar 

  • Gertner, D., and P. Kotler. 2004. How can a place correct a negative image? Place Branding 1 (1): 50–57.

    Article  Google Scholar 

  • Gimbel, B. 2008. Searching for the next Dubai. http://archive.fortune.com/2008/02/20/news/international/Dubai_djibouti.fortune/index.htm.

  • Glaser, B.G. 1987. Theoretical sensitivity: Advances in the methodology of grounded theory. Mill Valley: The Sociology Press.

    Google Scholar 

  • Government of Dubai. 2016. Dubai economy. http://www.dubai.ae/en/aboutdubai/Pages/DubaiEconomy.aspx.

  • Gugler, P., and S. Brunner. 2007. FDI effects on national competitiveness: A cluster approach. International Advances in Economic Research 13 (3): 268–284.

    Article  Google Scholar 

  • Gulf News. 2015. Expansion of Al Maktoum International at Dubai World Central will be completed by the first quarter of 2022. Gulf News. http://gulfnews.com/business/aviation/expansion-of-al-maktoum-international-at-dubai-world-central-will-be-completed-by-the-first-quarter-of-2022-1.1550145. Accessed 26 March 2017.

  • Gylfason, T., T. Herbertsson, and G. Zoega. 1999. A mixed blessing: Natural resources and economic growth. Macroeconomic Dynamics 3 (2): 204–225.

    Article  Google Scholar 

  • Hafeez, K., P. Foroudi, D. Keith, B. Nguyen, and S. Parahoo. 2016. The role of place branding and image in the development of sectoral clusters: The case of Dubai. Journal of Brand Management 23: 383–402.

    Article  Google Scholar 

  • Haggard, S. 1990. Pathways from periphery: The politics of growth in newly industrializing countries. Ithaca: Cornell University Press.

    Google Scholar 

  • Hassan, I., and N. Abu Talib. 2015. State-led cluster development initiatives: A brief anecdote of multimedia super corridor. Journal of Management Development 34 (5): 524–535.

    Article  Google Scholar 

  • Hedrick-Wong, Y., and D. Choong. 2015. MasterCard Global Destination Cities Index: Tracking Growth 2009-2015. https://newsroom.mastercard.com/wp-content/uploads/2015/06/MasterCard-GDCI-2015-Final-Report1.pdf.

  • Hoover, E., and F. Giarratani. 1971. An introduction of regional economics. New York: Alfred A. Knopf.

    Google Scholar 

  • Huff, W. 1995. What is the Singapore model of economic development? Cambridge Journal of Economics 19 (6): 735–759.

    Google Scholar 

  • Huff, W. 1999. Singapore’s economic development: Four lessons and some doubts. Oxford Development Studies 27 (1): 33–55.

    Article  Google Scholar 

  • Hvidt, M. 2009. The Dubai model: An outline of key development-forces elements in Dubai. International Journal of Middle East Studies 41: 397–418.

    Article  Google Scholar 

  • Kasarda, J., and G. Lindsay. 2011. Aerotropolis: The way we’ll live next. New York: Macmillan.

    Google Scholar 

  • Khodr, H., and D. Reiche. 2012. The specialized cities of the Gulf Cooperation Council: A case study of a distinct type of policy innovation and diffusion. Digest of Middle East Studies 21 (1): 149–177.

    Article  Google Scholar 

  • Klingmann, A. 2007. Brandscapes: Architecture in the experience economy. Cambridge: MIT Press.

    Google Scholar 

  • KPMG (2008). The MESA economy. http://www.kpmg.com/global/en/joinus/special-focus/kpmginmesa/whymesa/pages/the-mesa-economy.aspx.

  • Lagendijk, A. 1998. New forms of regional industrial policy in Europe: How do policy makers understand competitiveness and clusters. In European Regional Science Association Conference, Vienna, 28 August–1 September 1998.

  • Lee, K.Y. 2000. From third world to first: The Singapore story, 1965-2000. Singapore: Singapore Press Holdings.

    Google Scholar 

  • Lee, H., and D. Jain. 2009. Dubai’s brand assessment success and failure in brand management—Part 1. Place Branding and Public Diplomacy 5 (3): 234–246.

    Article  Google Scholar 

  • Locke, K. 2000. Grounded theory in management research. London: Sage Publications Ltd.

    Google Scholar 

  • Lucas, R. 1990. Why doesn’t capital flow from rich to poor countries? The American Economic Review 80 (2): 92–96.

    Google Scholar 

  • Madani, D. 1999. A review of the role and impact of export processing zones. World Bank Policy Research Working Paper no. 2238, August 1999.

  • Mahroum, S., and Y. Al-Saleh. 2016. The surrogate model of cluster creation: The case of Mubadala in Abu Dhabi. In Edward elgar volume on cluster policies from a cluster life cycle perspective, ed. R. Hassink, D. Fornahl, and M.-P. Menzel. Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • Mahroum, S., and Y. Al-Saleh (eds.). 2017. Economic diversification policies in natural resource-rich economies. London: Routledge.

    Google Scholar 

  • Malmberg, A., and P. Maskell. 2006. Localised learning revisited. Growth and Change 37 (1): 1–18.

    Article  Google Scholar 

  • Martin, R., and P. Sunley. 2003. Deconstructing clusters: Chaotic concept or policy panacea? Journal of Economic Geography 3 (1): 5–35.

    Article  Google Scholar 

  • Matsen, E., and R. Torvik. 2005. Optimal Dutch disease. Journal of Development Economics 78 (2): 494–515.

    Article  Google Scholar 

  • Insight, M.E.E.D. 2015. A comprehensive overview of the project opportunities in Dubai in the run-up to the 2020 Expo. Dubai: MEED.

    Google Scholar 

  • Menzel, M.-P., and D. Fornahl. 2010. Cluster life cycles: dimensions and rationales of cluster evolution. Industrial and Corporate Change 19 (1): 205–238.

    Article  Google Scholar 

  • McNabb, D.E. 2004. Research methods for political science. New York: M.E. Sharpe.

    Google Scholar 

  • Mukherjee, A., P. Pal, S. Deb, S. Ray, and T. Goyal. 2016. Special economic zones in India: Status, issues and potential. New Delhi: Springer.

    Book  Google Scholar 

  • Muratovski, G. 2012. The role of architecture and integrated design in city branding. Place Branding and Public Diplomacy 8 (3): 195–207.

    Article  Google Scholar 

  • Nowicki, L. (2007). Investment and entrepreneurship in Arab and Muslim-majority countries: The case of free zones. International Trade and Finance Association Working Paper no. 5.

  • Nyarko, Y. (2010). The United Arab Emirates: Some lessons in economic development. United Nations University—World Institute for Development Economics Research Working Paper no. 2010/11, February 2010.

  • Okoth, S. 2014. Public policy making process in the United Arab Emirates. In Public Administration and Policy in the Middle East, ed. A. Dawoody. London: Springer.

    Google Scholar 

  • Ortega, A. 2009. Dubai: The case for modern tribalism. Stanford Journal of International Relations 9 (2): 1–12.

    Google Scholar 

  • Papadopoulos, N. 2004. Place branding: evolution, meaning and implications. Place Branding 1 (1): 36–49.

    Article  Google Scholar 

  • PKF. 2015. Free zones in the UAE. Dubai: PKF United Arab Emirates.

    Google Scholar 

  • Porter, M. 1998. Clusters and the new economics of competition. Harvard Business Review 76: 77–90.

    Google Scholar 

  • Porter, M. 2003. Building a competitive UAE economy: The new learning. Institute for Strategy and Competitiveness, Dubai, 7 May 2003.

  • Rasagam, G., and D. Zeng. 2014. Free trade zones: Learning from global experience. In Asia-Pacific Finance and Development Centre’s FTZ Seminar, Shanghai, June 2014.

  • Rehman, S., and K. Dairabayeva. 2008. Is the ‘Dubai Model’ a new paradigm for growth and investment strategies for oil-based economies? Case Study Eurasia. ACES Working Paper no. 8.

  • Sampler, J., and S. Eigner. 2003. Sand to silicon: Achieving rapid growth lessons from Dubai. London: Profile Books.

    Google Scholar 

  • Sampler, J., and S. Eigner. 2008. Sand to silicon: Going global. Dubai: Motivate Publishing.

    Google Scholar 

  • San Francisco Gate. 2014. Dubai raises profile as Mideast plastic surgery hub. http://www.sfgate.com/world/article/Dubai-raises-profile-as-Mideast-plastic-surgery-5843519.php.

  • Shayah, M. 2015. Economic diversification by boosting non-oil exports: Case of UAE. Journal of Economics, Business and Management 3 (7): 735–738.

    Article  Google Scholar 

  • Shayah, M., and Y. Qifeng. 2015. Development of free zones in United Arab Emirates. International Review of Research in Emerging Markets and the Global Economy 1 (2): 286–294.

    Google Scholar 

  • Siegel, P., T. Johnson, and J. Alwang. 1995. Regional economic diversity and diversification. Growth and Change 26: 261–284.

    Article  Google Scholar 

  • Solvell, O., G. Lindqvist, and C. Ketels. 2003. The cluster initiative greenbook. Stockholm: Ivory Tower.

    Google Scholar 

  • Sonobe, T., and K. Otsuka. 2006. Cluster-based industrial development: An East Asian model. New York: Palgrave Macmillan.

    Book  Google Scholar 

  • Soto, R., and I. Haouas. 2012. Has the UAE escaped the oil curse? Economic Research Forum Working Paper no. 728, November 2012.

  • Storper, M. 1999. The regional world: territorial development in a global economy. New York: The Guilford Press.

    Google Scholar 

  • Strategy&. 2008. Economic diversification: The road to sustainable development. http://www.strategyand.pwc.com/media/file/Economic_Diversification_The_Road_to_Sustainable_Development_FINAL.pdf.

  • Strauss, A.L., and J. Corbin. 1990. Basics of qualitative research: Grounded theory procedures and techniques. London: Sage Publications Ltd.

    Google Scholar 

  • Struxness, A. 2013. The impact of authoritarian rule on the success of global branding efforts: Dubai, Singapore and Mumbai. Unpublished BA Dissertation, University of Puget Sound.

  • Tengri News. 2012. Medical tourism set pulses racing. https://en.tengrinews.kz/health/Medical-tourism-sets-pulses-racing–9776/.

  • Thompson, P. 2003. An analysis of Dubai’s socio-economic development strategies and performance between 1998-2008. Unpublished Ph.D. thesis, University of South Africa.

  • Thorpe, M., and J. Connell. 2013. Industry clusters, Dubai and the GCC: The antidote for growth and innovation after the GFC? In Resources and competitive advantage in Clusters, ed. K. Brown, J. Burgess, M. Festing, and S. Royer. Munich: Rainer Hampp Verlag.

    Google Scholar 

  • Thorpe, M., and S. Mitra. 2011. The evolution of transport and logistics sector in Dubai. Global Business and Economics Anthology II (2): 342–353.

    Google Scholar 

  • Vandenbosch, B., A. Saatcioglu, and S. Fay. 2006. Idea management: A systemic view. Journal of Management Studies 43 (2): 259–288.

    Article  Google Scholar 

  • Van Dijk, M., and A. Sverrisson. 2003. Enterprise clusters in developing countries: Mechanisms of transition and stagnation. Entrepreneurship and Regional Development 15: 183–206.

    Article  Google Scholar 

  • Vidican, G., L. McElvaney, D. Samulewicz, and Y. Al-Saleh. 2012. An empirical examination of the development of a solar innovation system in the UAE. Energy for Sustainable Development 16 (2): 179–188.

    Article  Google Scholar 

  • Vorley, T. 2008. The geographic cluster: A historical review. Geography Compass 2 (3): 790–813.

    Article  Google Scholar 

  • Wilson, G. 1999. Father of Dubai: Sheikh Rashid Bin Saeed Al-Maktoum. Dubai: Media Prima.

    Google Scholar 

  • Wolfe, D., and M. Gertler. 2003. Lessons from the ISRN study of cluster development. In Clusters old and new: The transition to a knowledge economy, ed. D. Wolfe. Montreal and Kingston: McGill-Queen’s Press.

    Google Scholar 

  • Zhang, K., and J. Markusen. 1999. Vertical multinationals and host-country characteristics. Journal of Development Economics 59 (2): 233–252.

    Article  Google Scholar 

  • Zumbach, K. (2010). The role of cluster theory for economic development: Does Porter’s competitive diamond fail to explain Dubai’s financial cluster? Unpublished MA Thesis, Bowling Green State University.

Download references

Acknowledgements

The author would like to express his gratitude to the anonymous reviewers, Dr Kai Chan and Dr Allen Gomes, for their much-appreciated feedback on an earlier version of this paper. The usual disclaimer applies.

Author information

Authors and Affiliations

  1. Mohammed Bin Rashid School of Government, P.O. Box 72229, Dubai, United Arab Emirates

    Yasser Al-Saleh

Authors
  1. Yasser Al-Saleh
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Yasser Al-Saleh.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Al-Saleh, Y. Crystallising the Dubai model of cluster-based development. Place Brand Public Dipl 14, 305–317 (2018). https://doi.org/10.1057/s41254-017-0079-1

Download citation

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41254-017-0079-1

Keywords

Search

Navigation