With further pressure on oil prices in the short to medium future, many of the regional leaders have been exploring other entrepreneurial and innovative industries to supplement GDP. This has long been the case in the UAE, Dubai especially, with the transformation toward tourism and services; however other nations are following suit more actively.
A number of regional governments have already committed to investing heavily in digital innovations as seen in Saudi Arabia’s 2030 Vision, PIF’s $3billion investment into Uber and Softbank’s recent $93billion private equity technology fund (backed by Mubadala, Saudi Arabia Government, Apple and Qualcomm). The UAE is hoping to create a FinTech Hub to rival that in London and we see a large rise in incubator programmes and Venture Capital Firms, who have historically avoided the region and invested in more predictable global locations. This highlights the region’s awareness and commitment to embracing digital disruption in order to compete on a global scale if and when the oil runs out.
An interesting article was released last week by Stanford University’s Tony Seba. In which he outlines his view on the redefinition of the automotive industry and the possibility that this shift could be the catalyst for the next oil crisis. Tony predicts that in the next eight years only electric cars, trucks, buses will be sold. Furthermore his premise outlines that most vehicle travel will be in autonomous vehicles and vehicle ownership will become a thing of the past, with the rise of on-demand vehicles. Earlier this year, the RTA announced that Taxi Drones will be in service in 2017 and they have already tested autonomous buses in parts of downtown Dubai which could give some credit to Tony’s claims.
OPEC have different views and see that the adoption of electric vehicles (EV’s) will take much longer as the current number of EV’s is less than a tenth, of 1% of global vehicles. There are further hurdles for EV’s with the cost of production, the cost of batteries and the current limit of travel range. Furthermore, the increased usage of electricity for transportation may be compensated by the increased usage of fossil fuels used in the production of electricity until renewable production catches up with demand.
Obviously, we are seeing great progress with renewable energy production in the region. Earlier this year Elon Musk discussed partnership and sharing of knowledge and resource, with HE Saeed Mohammed Al Tayer, CEO DEWA. The partnership would support Dubai’s plans to become a global hub of clean energy and green economy. The largest-single site solar project is already in progress which aims to provide 75% of Dubai’s total energy output by 2050.
Although it is unlikely that we will be swapping the Land Cruiser or the Patrol for a flying or even Electric car in the near future, I do think that the investment in digital, innovation and transformation that we are seeing across all industries will continue to grow. It gives a great opportunity to those in disruptive technology and creates a vibrant talent marketplace for those professionals who operate in digital, technology, security, IOT and transformation.
Attracting the best talent to facilitate this innovation is the key to remaining competitive and those who don’t are potentially running the risk of being left behind. As many sectors are challenging for the same type of expertise, we are noticing a skills shortage which often requires us to approach global talent from more developed markets; who cannot only lead innovation but who can also skills transfer to high-potential nationals.