Innovation key to UAE’s growth in post-oil era

Abu Dhabi / Emirates Business

The UAE can achieve a whole new level of excellence and prosperity by making innovation a highlight of its strategic direction in a post-oil era, according to a new market analysis issued on Saturday.
The report by PA Consulting Group says the UAE is a perfect example of how nations can emerge from being dependent on oil in becoming the region’s leading tourism and business hub by optimising non-oil
revenues.
It highlights how the UAE’s leaders managed to attract investors, strengthen the banking, real estate, healthcare and tourism sectors and minimized dependency on oil with a clear and ambitious vision.
“Massive investments have been made in economic development such as the hosting of Expo 2020 and setting a target to become the world’s number one medical tourism location,” said Ibrahim Komati, economic and government services expert at PA Consulting Group.
“Despite the diversity in its portfolio of investments and revenue sources, the UAE has also been hit by the drop in oil prices, and has moved to make innovation one of the highlights of its strategic direction, a move which can take it to a whole new level of excellence.”
The report, issued from PA’s MENA regional headquarters in Abu Dhabi, emphasises that a growing focus on national economic development is needed for GCC countries to survive the oil price crisis.
“The region is moving towards a new post-oil era, and the UAE and other GCC governments, particularly Saudi Arabia and Qatar, have started to review their economic ecosystems and have begun to decrease their dependency on oil revenues to focus on non-oil revenue sources,” said Jason Harborow, Head of PA Consulting Group Middle East and North Africa.
“They must now focus on developing human capital, starting by reforming educational programmes. Governments must plan and implement a highly intellectual educational infrastructure that will help grow and develop resources to become globally recognised leaders and drive towards excellence.”
The PA report says the GCC countries should invest in their citizens, develop them, and support them to become the next generation of leaders to drive innovation of economies and market a nation’s success. This will have a major impact on the social and economic agenda.
Komati added: “Regional governments need to increase foreign direct investments, and diversify spending into global investments across different sectors, with the main focus on education, healthcare and travel, transport and logistics. Governments should also invest in non-profit organisations serving as a backbone to the nation’s development, whether in education, social affairs, healthcare or human development.”
PA, which works with businesses and governments worldwide, says priority government actions should include a review of strategies and operating models to ensure agility to adapt to the new normal.
“A priority for governments is to develop contingency plans, and slashing costs is not the only solution. They must focus on their strengths and competitive advantages, and embed the culture of excellence and innovation in order to reach their ambitions and drive transformations in the most innovative and unique way,” said Komati.
“Innovation is the best way to hit the ground running for the region should oil prices remain low.
Governments should focus on human capital development, economic development and on transforming their businesses to cope with changes.”
The PA report says regional governments should plan a “War on Waste”, minimising inefficiencies by focusing on targeted reductions. They must review funding plans and consider raising cash in the debt markets such as PPPs and Sukuk, and keep enough cash as a buffer to back up contingency plans.