It has become clear to most of us operating in United Arab Emirates that this country has the potential to develop into one of the important growth regions in the world. I’m taking the opportunity with this blog to have a quick look at why that’s the case, what that means in the short term, and most especially what that means for industry in the UAE.
It’s almost a case of ‘forget everything you think you know about the UAE’ and start again. I say almost because, of course, oil is still a vital part of the equation. The Middle East accounts for half the world’s known crude-oil reserves and over a third of the natural gas. And the world is hungrier than ever for oil. But the lifeblood of the UAE is not only black.
The ambition of the UAE is well known and explained by its growth as a tourist destination. But erecting the tallest building in the world in the middle of the desert, or the best indoor skiing on the planet in one of its hottest climates is, well, the tip of the iceberg.
The stated strategic goal of His Highness Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, is to achieve the number one rank in all global indices. And as he pointed out in 2014, under his leadership and directives our country recently ranked 12th overall on the Global Competitiveness Index (GCI), which is a 12-rank improvement compared to 2012.
Economic diversification is at the heart of the plan. And it’s already further along than many people realise, with non-oil sectors now accounting for 69% of GDP. To find out more about the 69% read this article on Khaleej Times, which goes on to explain the resilience of the economy even if the price of oil continues its recent decline. It is all part of ‘Vision 2030’ announced in 2009 by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi. Vision 2030 is a long-term plan to transform the economy by increasing the focus on knowledge-based, export-oriented industries. This investment and commitment to the future needs to be sustainable – in fact, the whole point of the strategy is to make the economy sustainable beyond oil. And that is what makes this such an exciting region for Rockwell Automation. As a company, our stated intention is to make our customers more competitive and the world more sustainable. And in many ways it is a perfect fit.
From a customer perspective, the drivers in the Middle East are the same as in many other places around the world. There is a need for efficiency, for a Connected Enterprise, for Integrated Architecture and for product support throughout the lifecycle.
In common with more mature economies around the world, the services market is seen as an area of great potential. The industrial service of pumps, motors, compressors, automation, instrumentation and electric drives is set to grow rapidly in the coming years. Analysis from Frost and Sullivan identified earned revenues for the Middle East Industrial Services Market at $549.3m in 2013 and estimates that it will reach $818.5m in 2018 – a compound annual growth rate of some 8.3%.
With continued investment and progressive strategic leadership to diversify, the short and longer term futures of the UAE look to consist of continued growth. It is a more and more exciting place to do business with an expanding SME market, growing manufacturing base, population and world class infrastructure.
The last word to Sheikh Mohammed, who looks to a future with great optimism as reported in Emirates 24/7:
“We have placed our trust in the capabilities of our citizens and their ability to achieve further success in various sectors, equipping them with all the necessary tools to sail into new horizons and build a better future for the coming generations.
“We shall continue to invest in developing our human resources, updating our legal and regulatory frameworks, upgrading and further strengthen our infrastructure, and pursuing new levels of development and seeking to further establish ourselves as key partners in forming the future of humanity,” Sheikh Mohammed concluded.
Bearing in mind the predicted GDP of the UAE for 2014 was $419 billion compared to an economy of $1.77 billion in 1971, it’s hard to imagine that 2015 won’t be a good year. Or 2016, 2017 or 2018, for that matter – and remembering to forget what you think you know about the UAE – it won’t be all about the black gold.