Dubai is the Gulf's commercial capital

"In one year, I wish to see new economy businesses operating out of Dubai," Sheikh Mohammad said.

"This is the project to be pursued with energy and efficiency... this is Dubai's future."

Dubai has always been a trading hub for the Gulf region.

A BBC correspondent in Dubai says there appears to be genuine backing for the internet city with major companies relocating there.

'Not cosmetic'

Although for many companies that may mean simply a consolidation of existing business within the Emirates, they reject the idea their plans are simply cosmetic.

Bahram Mohazzebi is the General Manager of Microsoft in the region.

"If you look into the idea behind Dubai Internet City, which basically says, 'I'm going to get the innovative people and innovative companies, put them next to each other, create a synergy and give them the best infrastructure possible, and integrate that to the local environment, local businesses, be it private or public,' then, I guess, it's not cosmetic any more," Mr Mohazzebi told the BBC.

The inaugaration of the Dubai Internet City coincided with the opening of the Gulf Information Technology Exhibition at the Dubai World Trade Centre - the Middle East's largest annual information technology event.