Abu Dhabi has done well in diversifying its economy, away from an overwhelming reliance on oil and hydrocarbons. Its strategic authorities have looked at a variety of industries and given its substantial financial reserves and small national population, Abu Dhabi has focused on industries that require large amounts of capital and technology and a small requirement for labour.
Abu Dhabi is already busy in a variety of downstream industries like refining or using the hydrocarbons for making fertilizer and plastics, as well as aluminium, which relies on a large amount of gas to provide the power required for the smelting.
But Abu Dhabi has also looked at totally new industries and has turned its detailed knowledge of the world’s energy markets to develop a key space in the emerging renewable energy business. Masdar City is an important test bed for totally new technologies which may in time become world leaders in the field of renewable energy, offering Abu Dhabi both an important commercial asset as well as strategic leadership in this vital sector.
The emirate has also invested in totally new industries like ship-building and aviation, where it sees itself able to build an important strategic position over time. It is exciting to see plans for Mubadala’s Strata Manufacturing to assemble small passenger air planes by 2018, which is part of a wider plan to invest in a wide range of aerospace technologies. Mubadala’s head of Aerospace told a Ramadan meeting last week that the emirate hoped to leap-frog its competitors and become one of the top three in the industry by 2020 and a global leader in composite airframes, wings and tail sections.
This kind of detailed focus is important. Within a generation, Abu Dhabi knows that its economy needs to be cut loose from relying on the simple extraction of hydrocarbons from underground. It needs to have new industries which will help pump in more money to the emirate’s economy as well as supply essential career opportunities for the emerging population of Emiratis.
