The Gulf Arab nation has already introduced a wide range of smart-phone governmental services and there are plans to make Dubai a "smart-city" by incorporating government services through the use of smart phones and tablets.
Power in the UAE is concentrated in the hands of ruling families. Unlike other countries in the region, it has not experienced widespread demands for reform and appears to be counting on its vast wealth to deliver cutting-edge state services to keep its citizens content.
Noah Raford, who is an American adviser to Sheik Mohammed's office, told The Associated Press that the Emirates is already experimenting with drones and looking at prototypes to deliver documents, like national identification cards and driving licenses, to citizens.
"About a year ago we started experimenting with drones as a possible delivery mechanism for government services," he said.
Raford said the UAE wants to see drones in the sky by early next year. He spoke on the sidelines of a government technology summit in the UAE's city of Dubai.
"What we're really trying to do right now is just push the boundaries of what's possible and using that as a prototype, if you will, to explore the other policy implications that will have to be dealt with in a responsible and diligent way to make this a safe reality," Raford said.
A video released during summit shows an Emirati man receiving his national identity card from a drone that flies to his house after providing his location through a smart phone to a government employee.
The drones would include fingerprint- and eye-recognition security systems to protect the drones and their cargo, the government says.
Online retailer Amazon.com grabbed headlines last year when its CEO Jeff Bezos said the company is testing package delivery using drones, though the company acknowledged practical use is years away.
There are obstacles to residential drone deliveries in the U.S. and commercial use of drones is still illegal according to guidelines by the Federal Aviation Administration.
Unmanned aircraft are already used for seeding and spraying of crops in Japan. In India, wildlife authorities have used drones for aerial surveillance of a sprawling natural game park to protect the one-horned rhinoceros from armed poachers.
The UAE could be one of the first governments in the world to implement drone delivery services to citizens. Policy-making is more centralized in the Emirates and the country's regulatory framework regarding privacy laws is not as codified as in many Western countries.
For the $1 million competition, companies, universities and individuals around the world can compete to invent drones that improve quality of life. A second 1 million dirham competition, or roughly $272,000, was launched for UAE nationals to come up with ways that drones can improve the quality of government services for citizens.