Dubai Airport Free Zone (Dafz), also known as the business village is fast becoming a global village as many of the world's leading multinationals base themselves at one of the world's fastest growing airports and most important regional hubs.

The new purpose-built headquarters for Dafz on the north side apron of the airport is literally parallel to the main runways at Dubai International Airport and the new space age terminal.

With the airport experiencing a growth of around 10 per cent each year with a recorded passenger throughput of almost 11 million in 1999, the location of Dafz is ideal for business.

In an area covering 127.5 hectares the zones are laid out for the future development of the technology and business park including industrial light manufacturing, commercial development and aviation related industries.

Already, 97 companies are operating in the completed Phase One development occupying almost 10,000 sq m of office space.

Dafz director general Dr Mohammed Al Zarouni has a doctorate in the development of free zones and is fully aware of the detailed master planning required to make this government investment a success.

The economic benefits of well-planned free zones are mutually beneficial to both the host country and the multinationals establishing a presence. In the highly organised way that Dubai creates the necessary infrastructure for attracting calibre businesses, Dr Al Zarouni and his team are making sure that Dafz meets the highest expectations in terms of efficiency and minimal red tape.

The idea behind Dafz is the creation of an ideal business environment for high end intellectual capital companies that select the zone not only as a base for UAE activities but as a regional base for manufacturing, distribution and services.

The design and layout of the Dafz has more in common with Silicon Valley in California and promotes an air of informal functionality and operational efficiency. In its planning, Dafz also considered how new entrants would develop relationships with other facilities and service providers at the airport as well as the aesthetics of projecting a quality regional office setting for world's blue chip companies that have registered at the airport.

Although there can be both positive and negative effects from any free zone, Dr Al Zarouni is confident that Dafz is dealing with foreign investment into Dubai in an effective way for the mutual benefit of the local economy and the foreign investors.

The underlying objective of Dafz is to import and implement advanced technologies, enhance export trade, attract foreign investment and create job opportunities.

Dafz, in the heart of the city and within the airport itself, facilitates and enhances the competitive advantage by virtue of its location. Thus companies within Dafz are benefiting from air cargo (Dnata), international couriers such as DHL and AEI, maintenance and distribution companies.

The focus from the outset has been to attract international companies of repute, essentially the blue chip companies of the world, that can leverage the high growth potential in value added activities appropriate to the new wave of development of the UAE national economy.

Dafz companies include service-based multinationals providing administrative, technical, professional and consultancy services. As one would expect many of the companies that have established themselves at the zone are high technology industries and closely related to aviation, for example Rolls-Royce and Boeing Middle East.

Rolls-Royce, the first company to establish itself in Dafz is already expanding as it reserves space in the Phase Two development now under construction. Boeing Middle East has based one of its global spare parts supply facilities here to service the Boeing fleets that serve the region.

Other service-based multinationals include high-end technology and professional service companies. For example, the Planet Optical facility represents a $25 million initial investment in CD/DVD mastering technology that is also part of a global strategy. Thus, Dubai as well as offering ideal conditions for investment in the UAE market is pivotal for the long-term regional market strategies of these companies.

Professional support companies have also set up in Dafz providing services such as finance, banking, legal consultancy, accounting and economic studies.

The selection procedures for Dafz are stiff with 80 per cent of the original 500 applications not deemed appropriate for the zone. As Dr Zarouni emphasised, great care has been taken to ensure that the companies that would establish themselves in Dafz had business plans and the growth potential to meet the demands of the local economy. Although 25 companies were considered for manufacturing at Dafz, only one company was accepted, namely Planet Optical.

Essentially, the zone is a technology-driven business park and the government intends to maintain this high-end approach in its further expansion of the zone.

The growth of Dubai and the airport in itself is phenomenal with 85 airlines now flying into the airport and traffic movements increasing by the day.

Thus the critical mass of Dubai is more than self-sustaining with anticipated growth rates of 10 per cent per year. Dubai planners are expecting dramatic growth rising to 30 million passengers per year in the next 15 to 20 years, or less. Thus, the construction of another terminal, one kilometre in length, will be built as a mirror image of the terminal which opened earlier this year.

Several companies that had originally considered establishing regional offices in the Far East have now chosen Dafz as their preferred choice. The Dubai factor is a potent force and Dafz is certainly making itself known as the global village.

Such is the success of the free zone approach in Dubai that the Berlin government has discussed the Dubai example and how such strategies can be implemented in Germany.

Thus one can expect to see Dafz and its business park continue to flourish in the years to come. In June next year, Phase II of Dafz will be open and already the available accommodation is being registered as Dubai has another success story.