Dubai: UAE companies are implementing operational changes to be more resilient following the challenges they faced from the COVID-19 pandemic, according to an HSBC study,
The new Navigator report, ‘Building Back Better’, surveyed 2,600 companies in 14 countries, including 100 companies in the UAE. It shows many firms in the UAE (79 per cent) were "strongly impacted" by COVID-19 compared to 72 per cent for all markets. The UAE was the second highest market after India to feel the impact "very strongly" (42 per cent).
“UAE businesses have always had a strong entrepreneurial spirit, and we are seeing that come through in how they are adapting to new ways of working and in how they are accelerating transformational plans,” said Daniel Howlett, HSBC’s Regional Head of Commercial Banking, Middle East, North Africa and Turkey.
While 18 per cent of respondents said they are agile enough to remain stable, more than half said they are strong, but have had to make a number of adjustments to withstand the impact.
One-fourth said they have been challenged... but expects to survive. While 5 per cent said they will need significant changes to survive, only 1 per cent feel their long-term survival is threatened.
Focus on supply chains
For many UAE businesses, their supply chains have come into focus. Nearly three-fourths of surveyed companies said they intend to increase measures to ensure the security of their supply chains over the next one to two years (compared to 67 per cent in all markets), with the most important measure being to identify and secure critical suppliers (38 per cent).
Around a third of UAE businesses are considering reviewing their supply chain partners’ ability to weather future uncertainty, while 30 per cent are considering diversifying their suppliers so they can work with more providers.
The report showed collaboration among companies has helped sustain operations during the crisis, businesses see a number of challenges ahead as they seek to build resilience over the next six months. Employee morale was the top barrier, with 47 per cent viewing it as a major concern.
This is particularly pronounced at international operators (61 per cent). The next most prominently cited barriers were maintaining sufficient cashflow (36 per cent) and external factors beyond their control (35 per cent).
The crisis has also forced many businesses to rethink their technology investment strategy, with 66 per cent of businesses in the UAE strongly agreeing that times of adversity showcase how technology can be better leveraged to improve how they work. Investing in technology is what many UAE companies (64 per cent) plan to do over the next five years while a quarter of businesses view it as a top priority.
What the crisis has also shown to businesses is that sustainability is more important than ever before. Almost all UAE businesses (95 per cent) agree on the need to reassess their operations to be built on firmer environmental foundations.