Located just outside Dubai's extravagant downtown is a massive technology park called Dubai Internet City, or DIC. The city is essentially Dubai's version of Silicon Valley and hosts the regional headquarters for many of the world's tech giants, including Facebook, Alphabet's Google, Microsoft, Cisco, IBM, and others.
The city is the Middle East's largest Internet and communications technology headquarters and is built within one of the United Arab Emirates' free trade zones. Dubai Internet City first opened in 2000, after just one year of construction. It now boasts 1.5 million square feet of office space and houses 1,600 companies with about 17,000 workers.
Why tech companies set up shop in Dubai Internet City
Dubai's penchant for luxury and over-the-top projects (the city has its own man-made palm-tree islands) certainly has an allure, but tech companies have flocked to DIC for its free-trade-zone status. Dubai Internet City gives tech companies incentive to have their regional headquarters located there by offering special benefits -- namely, tax exemption for 50 years and no import or export duties.
Back in 2012, Facebook set up its first Middle East Office in DIC, ito have better access to advertisers and other clients in that part of the world. Facebook uses the location as its main office for business in the Middle East, North Africa, and Pakistan.
But it's not just large tech companies that benefit from Dubai Internet City. A recent TechCrunch article noted that technology start-ups have emerged from the co-working spaces and tech incubators set up within the city, not to mention DIC's hosting of hackathons, tech conferences, and Internet of Things expos.
It's not the only city of its kind
Of course, other cities around the world have set up their own incentives to build technology and innovation hubs. Malaysia set up the technology city Cyberjaya in the late 1990s, and while it hasn't grown at the same scale as Dubai Internet City, some of the principles remain the same. Cyberjaya offers incentives for foreign companies to bring their business into a tech-focused location. Right now, Cyberjaya has about 800 companies in its tech park, including 40 global companies.
Probably one the most important examples of a country promoting new international technological ventures was the Yozma program in Israel. In the 1990s, the country said that if a foreign investment firm committed $12 million to partner with an Israeli investment group, the government would add $8 million more to the investment. That initiative helped spark Israel's tech boom, and according to an article published in the Los Angeles Times around that time, "Many companies they financed became leaders of the country's high-tech surge."
While the Yozma program and Cyberjaya differ from Dubai Internet City in many ways, they're all examples of how countries around the world are building their own versions of Silicon Valley in their home countries.
Despite the tech focus, Dubai Internet City is still censored
The United Arab Emirates isn't exactly a bastion of free speech, as the government censors content it deems inappropriate. The economic free zones such as Dubai Internet City and other locations used to enjoy more Internet content freedom than other parts of the UAE. In 2006, the BBC wrote that, "Internet users in Dubai's commercial free zones -- like Dubai Internet City, Dubai Media City, and Knowledge Village -- are able to sidestep the strict state censorship by using a different proxy." But in 2008, that started to change, as the state-controlled Internet company, Du, began routing all Internet content -- even in the free zones -- through its own servers and started censoring content in Dubai Internet City.
Clearly, censorship can hurt tech innovation and, in the end, could hinder how technology companies in Dubai Internet City operate. But the current tax incentives and access to fast-growing markets such as India, Africa, and southern Asia are likely to fuel Dubai Internet City's growth into the near future.
Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool owns shares of Microsoft. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.