Against a backdrop of receding oil revenues and scenarios for a double-dip recession that are all the more frequently cited in the majlis, boardrooms and governmental offices across the region, the spectrum of economic stagnation, job cuts and increased unemployment is gradually enveloping the Gulf’s oil producing states.
Despite recent reassurances that economic diversification strategies pursued by governments during the last decade have helped reduce dependency on oil trade, analysts are well aware of the detrimental implications a protracted period of low barrel prices would have on the actual economy.
Yet, one must admit that oil’s importance in the pecking order is diminishing, whether planned, unintentionally or necessarily for that matter. As the UAE’s economy is becoming more diverse, certain sectors are set to gain more than others.
In this changing environment, entrepreneurs planning to invest in their business ventures today should be cognisant of the shifting landscape and well informed about the new opportunities presented to them as a result of the future economic outlook.
The most obvious sector likely to attract significant investment at every level of the spectrum, from big-ticket infrastructure projects to SME type of innovation-driven initiatives is of course energy, and alternative energy to be more precise.
The UAE has already announced ambitious plans to introduce alternative forms of energy into the grid requirements, with nuclear occupying a big chunk of the investment and a sizeable proportion of the overall energy production. Solar is also a key sector with Abu Dhabi taking the lead.
New entrepreneurs with smart ideas and technological innovations which could add value in terms of health and safety, environmental protection and other supply chain related purposes could get a healthy head start in the race for cleaner energy sources.
Those with access to international patented proprietary technologies could stand to benefit even more as decision-makers in the region become more accustomed with the immense benefits some of those innovations could bring, both to the energy mix and the arid climate of our region. Biofuel is one such sub-sector where incredibly sophisticated technologies can help GCC countries produce the cost-effective energy they crave to transform wide areas of deserts into arable, lash, landscaped masses of fertile land.
Drones is another area where much of recent entrepreneurial activity seems to be focusing on. Whether rightly or wrongly before the introduction of a solid regulatory framework is what remains to be seen.
The UAE government seems to be fully behind the drone revolution with the government funding and fostering projects geared towards enabling the introduction of innovations and technologies that would support the secure propagation of the devices for commercial and other purposes.
Different entrepreneurs have different aspirations, limits and capabilities and not everyone would be inclined to introduce new, untested products and new production processes designed to serve a yet-to-be-mainstream sector.
They would also be resistant in having to engage with foreign markets, or to fund growth for such high risk ventures with external capital.
However, these aspirations, if realised, could significantly and positively affect the economic impact of these entrepreneurial activities. Products and process innovation, internationalisation and ambition for high growth are regarded as key success factors of high aspiration entrepreneurship, which in turn can have a major impact on new jobs and wealth creation.
— The writer is an Omani entrepreneur. Follow him on Twitter @Qaisalkhonji
