For decades, the economic prospects of the Gulf Cooperation Council (GCC) have been primarily measured by its hydrocarbon resources. The recent years, however, have witnessed a clear acknowledgement of the need to diversify the economic model and seek other resources.
Fortunately for the GCC, it has another resource that, if properly empowered, has the potential to transform the economies. That resource is its young population.
Today, the Gulf countries are home to some of the world’s youngest populations. While parts of the world are struggling to cope with ageing demographics, as much as 54 per cent of the GCC’s population is less than 25 years — a statistic that bodes well for economic development.
By looking through the eyes of this younger generation and understanding what makes it tick, we can identify opportunities that not only create a more progressive culture but support future economic growth and create long-term value for investors.
The question is: how can markets, companies and investors benefit from that potential and support the younger generation in the future of our economies?
The answer is multi-faceted, and the best place to start is with jobs. Unemployment remains an area of concern. Regional governments have gone to great lengths, with many initiatives focused on increasing employment levels. However, with the public sector at near-full capacity, the obvious alternative is the private sector, whether in the form of jobs or entrepreneurship.
But to activate the role of the private sector in truly investing in their young, GCC countries need to pave the way for greater sector participation in their economies. This would allow companies to capitalise on the innovative ideas of young talent to thrive in a competitive marketplace. By carving out a clear space where the private sector can operate, countries can help secure not just the future of their young people, but also of the businesses that help drive national economies.
The public and private sector efforts can only go so far without having the right talent to work with. There is growing consensus that the skills required will focus on mental elasticity, complex problem solving, critical thinking, creativity and people skills. Traditional educational systems are still not well positioned to impart these skills to the required extent.
There is, therefore, a large and interesting opportunity for businesses that can come up with suitable platforms for providing the technical, vocational and intellectual skills to equip young nationals with the skills for the jobs of the future. There are definite opportunities for investors to tap into this through investing in the education sector in areas such as schools with suitably modified curricula, all the way to edutainment businesses.
Businesses should look towards the ever-evolving pattern of consumption of this emerging group of consumers and how it is likely to be very different from its predecessors. This critical intelligence will help both businesses and investors alike to identify innovative new ways to meet these needs. For instance, millennials spend a much bigger part of their money on experiences — travel, adventure sports, fine dining, and gourmet coffee — than their parents did at the same age. They choose convenience and comfort over owning assets — witness the preference for rented apartments near “happening” places over a house in the suburbs, or opting for taxi services to buying a car.
Businesses, investors and entrepreneurs that get an early understanding of these patterns, and develop the ability to cater for them, will be the success stories of the region for many years to come.
— Biswajit Dasgupta is Chief Investment Officer at Emirates Investment Bank.