Silicon Desert Dubai is a city in the United Arab Emirates, a collection of seven desert kingdoms near Saudi Arabia. It's also where I grew up. Every time I return the place has doubled in size, with more fancy hotels, shopping malls, and parks. It's really quite something.

Dubai now has its own Internet City-- basically a tax-free clustered campus designed to lure technology firms to the region. Dreamt up by Sheikh Mohammed (the crown prince of Dubai) in the heady days of 1999, completed in less than one year, it stands ready just as the technology biz continues to collapse.

I chatted with Hussain Al Mahmoudi, Dubai Internet City's Marketing Communication Manager. Here's what I learned:

Although Dubai has no financial market, no technical academic roots, little manufacturing, and little installed tech industry, it does offer a great standard of living, committed government subsidies, and a strong import/export base. Many companies working in the Gulf like Dubai because their employees are happy and the infrastructure works. Given the lack of regional technology hubs (barring Israel), Dubai seems well positioned to set up a redistribution cluster to serve the Arab world. And Dubai is much closer to Bangalore than Palo Alto. Setting up clusters is hard to do, as the struggling Silicon Glen's of the world can attest, but let's wish them the best of luck.

The government is the major technology investor and buyer here. Their e-government initiatives are the best I have seen anywhere. My father uses the Internet to pay utilities, settle fines, and renew services. I wonder if they've cosied up to monopoly service providers the way the UK government did with Microsoft, or if they're resisting single-vendor lock-in like all companies should (but few do). If local buyers aren't savvy about this stuff, the region will become a feeding frenzy while Gates and Ellison lock-in as many cash cows as possible. Ugly for Dubai, good for Microsoft and Oracle.

Dubai is also a pretty conservative place (but much more liberal than, say, Saudi). The government phone monopoly, Etisalat, provides all telecommunications infrastructure and (like China) the entire country is hosted off a proxy-server that censors unsuitable websites. "Unsuitable" usually means porn, but occasionally includes The Register and Internet-telephony providers that threaten Etisalat's long distance revenue. The phone monopoly is too lucrative for the government to give up, but Dubai might get a second government entity that competes to provide the same service. That'll be interesting.

I think the Internet will shake up the culture here, albeit slowly. "Freedom of expression, freedom to create," (the motto of Dubai Internet City) sounds peculiar in a place with rigid labor policies, a two-tier legal system, and strict limitations on business ownership. But I think they recognize the need to give folks more liberty if they want to attract the better class of person they seem to desire. So far, they have 200 companies signed up, which is pretty good in these depressed times. If anyone out there is thinking about setting up shop in the Gulf region, I'd check out Dubai Internet City.

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