Abu Dhabi: The UAE holds the key for advancing and competitiveness with the right attitude and the right leaders, a world-renowned competitiveness expert said yesterday.
”Every since I last visited the country in 1978, the UAE has made a remarkable progress and it holds the key for advancing and competitiveness globally with the right attitude of why not doing, trying things and the right leaders,” Dr Stéphane Garelli, a professor at both the International Institute for Management Development (IMD), one of the world’s leading business schools, and at the University of Lausannetold the audience at the majlis of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
Dr Garelli, also the director of IMD’s World Competitiveness Center, said he was impressed at the UAE’s ranking as the 17th most competitive nation globally.
“Despite challenges, the world is not as bad as it sounds, especially in the UAE, which has the right attitude and the right leaders, The UAE has an opportunity to produce and export to 2.8 billion people who live in the emerging less poor nations, in between those who are living in poverty and those in the middle class,” Garelli said.
Garelli suggested that the UAE keep on the dual track education with universities offering learning and apprenticeship in learning a job.
“The world competitiveness landscape is going through an unpreceded era of volatility characterised by weaker growth, financial, monetary and price instability. Although still global, the world economy is also increasingly desynchronised and fragmented. But volatility does not mean unpredictability. Some key issues will continue to shape competitiveness,” he said.
Garelli argued after the “great recession”, the world economy has failed to fully recover and seems to be struggling through a “great stagnation”. In addition it is “cash rich and investment poor”. Central banks in the US, Europe and Japan have flooded the market with liquidities, which have found their way to the stock exchanges and companies’ balance sheets. Apple now has $158 billion in cash. But investment levels are the same as in 2008. As a consequence of this surplus of cash and deficit of business opportunities, interest rates have dropped drastically and are likely to remain low for some time.
Garelli said most governments will continue to need money to finance their budget deficits. Tax pressure will increase. The US government estimates that some $2 trillion of US company profits are placed outside the US and do not return ‘home’ because of high taxation. In addition, the Organisation of Economic Cooperation and Development (OECD) is conducting a major reform of international taxation based on transparency and accountability. A fundamental objective is pursued: companies should pay taxes where revenues occurs and not where the company is registered. Amazon and Starbucks are beginning to comply.
“There is also a lot of good news. First and foremost, the world economy is expanding its base. New players and new brands from emerging economies are proliferating and are no longer afraid to attack global markets. New opportunities arise in such regions as Africa, which will count 2.391 billion people in 2050, and where Nigeria will be more populous than the US. New business segments [the “less poor” in the developing world, the “silver generation” in the advanced economy, and the middle class everywhere] are triggering new business models. Sustainable growth and new technology, such as automation or the internet of things, will redefine how companies operate and how they will communicate with customers,” Garelli said.
Garelli stressed that energy and commodities will remain of critical importance despite the present slump in prices. If China had the same GDP per capita as South Korea, the size of its economy would be as large as the US and Europe together. Already now, China accounts for 45 per cent to 55 per cent of world consumption of most minerals. The world will need additional resources in all kind of commodities ranging raw materials to food. Although sources of energy abound, the cost of new production tends to be higher. In addition, many advanced economies are reluctant to exploit their potential resources (such as shale gas or oil) for environmental reasons. “We have it, but do we want it?” is the recurrent question.
He said this new brave world of competitiveness requires a change in attitude. “The most competent people are not necessarily the most competitive. The mindset makes all the difference. Crises are periods that reveal strength of character. It is not only being good at “what you do” that counts, but also being good at “what you are”. Winners will need to deal with more uncertainties and a higher sense of discomfort. They should nurture a healthy sense of ambition for their organisation and themselves. Resilience and the ability to quickly reinvent oneself are key objectives. The key for success therefore lies in three levels of management excellence: efficiency, change and complexity.” Furthermore, companies need to stimulate a mindset of imagination (why not?), of energy (why not now?) and of commitment (why not me?). As Albert Einstein said: “Logic will bring you from A to B, but imagination will lead you everywhere”.
