Dubai: Dubai’s connectivity with the rest of the world, the ease of doing business, the investment in technology and infrastructure make the emirate one of the best markets for foreign direct investment, said Kevin S. Parikh, Chairman and CEO of Avasant.
The company, which operates in over 50 countries, advises Fortune 1000 companies about investment opportunities - and Dubai is one of the first cities that come to mind. In an interview with Gulf News, Parikh talks de-risking, the shift to regionalisation from globalisation, and his first days as an entrepreneur.
What are the opportunities that you see for Avasant here?
Dubai is a very vibrant market. It has acted perfectly on the opportunity to act as a gateway between East and the West. Not only that, Dubai gives an opportunity to Western companies to take advantage of global markets.
Dubai has done a wonderful job of creating not just an Expo-type of environment, but an opportunity with many venues that can fit the desired business strategy. Look at telecommunications, broadband.
Travel to Dubai has become really easy with most countries offering non-stop service. A combination of physical infrastructure and travel, as well as the investment in technology, and new, innovative spaces, such as Museum of the Future, are creating an exciting time here.
What role do you see Avasant playing in bringing together companies from around the world to Dubai?
The foreign direct investment strategy for most companies. They would be multi-national corporations who are concerned about several factors. One, they want a business strategy. Two, they want to be able to evaluate different regions such as Dubai or anywhere else for the potential opportunity.
One thing that we do as a company, which is our primary focus, is to help the companies navigate those decisions, and also create the business case necessary to come to Dubai.
Most of our clients that are interested in investing here want to establish a headquarters. They want to be able to do more work in the Middle East. They want a gateway from the West to the East.
They are also looking at a talent pool that they can establish in Dubai. They want to make full use of the opportunities, the great infrastructure and, of course, the investment in technology.
What else has contributed to the increase in business opportunities?
One of the key things about where we are in the world today is we see a movement from globalisation, which during the period of the 2000s was the primary focus - and expectation - of the world. We thought we would be able to live in a world where trade would happen not just on a local basis but globally. We could take advantage of talent pool wherever they were based.
What we have seen recently from conflicts such as those in northern Europe, Ukraine, etc., is that the lines are getting harder, which means that what might have traditionally been possible. For instance trading between Russia and the West, or maybe even China and the West, is becoming difficult.
This has brought about regionalisation and the emergence of local trading pacts. That has created an opportunity for Dubai to become a gateway for international business.
It’s interesting because we never really expected that we would go backwards. When Thomas L Friedman wrote The World Is Flat, we thought that this is the future. No one expected that the world would take a turn backward.
Which are the other markets that can take advantage of this shift from globalisation to regionalisation?
I think Dubai and the Middle East as a whole present an interesting opportunity for most companies because of the geo-location and the supply chain. Of course, Dubai has the world’s No. 1 international airport, not just for individual travellers but also for shipping of goods. These are the unique characteristics that make this region particularly of interest.
Other countries in Southeast Asia are also emerging, even 'friend-shoring' — when major trading partners are looking for countries that are nearby, such US-Mexico or US-Canada. Or how European countries are working more in eastern Europe. So there are new hubs in this market, but I do think that Dubai presents an interesting position in this market given its strong trading capability.
How closely do you work with the government here to gauge the industries where FDI is more suited? And how do you convey this to companies overseas to make it a win-win?
Avasant has a significant research capability. We are a management consulting firm that does the business and legal transactions for our clients, but we also collect a significant amount of data, especially on what government incentives may be available, what opportunities there are in different regimes when comparing tax, or potentially cost of setup of operations. We model that for our clients.
Today we look at over 150 countries, their strengths, weaknesses, opportunities, and we use that as a basis to tell our clients where it makes sense for them to invest.
Let’s go back in time now to when you started this company. What drove you to leave a regular job and start your own company?
I think entrepreneurship is its own story, and one of the great things I have seen in Dubai over the years is that there is a great entrepreneurial spirit here. I have a lot of kinship with that.
Our business is nearly 17 years old. But I remember one specific story early on. It was the first day of the company. Everyone else had left.
I turned on my laptop and there was not a single email, there were no clients to call. In my prior job, I was used to having maybe 800 emails a day. That was a moment of clarity — that if we are going to make this business, we are going to make it on our own.
It was sobering at one level and empowering at another. So I truly understand the entrepreneurial spirit that’s here today. We have seen the ability here. Look at companies like Careem that have really established themselves because of their willingness not just to take chances but also take advantage of the opportunities presented to them.
What of the de-risking companies have done after the pandemic and all those restrictions and lockdowns.
De-risking from countries was triggered primarily by Covid where companies wanted to maintain not just a price for their goods and services, but also ensure their supply and timely delivery - primarily manufactured goods. Once that de-risking starts and the distribution happens, it’s very difficult to turn that around.
There’s a lot of equipment involved, machinery that has to be acquired for today’s modern manufacturing. It’s billions of dollars of investment, particularly for large-scale manufacturers. I don’t see that de-risking immediately going back to traditional markets. It was perhaps a bit of a wake-up call for Western and global MNCs.
Do you find instances like these in the rest of the region?
If you look at Saudi Arabia, you have NEOM. It’s a city of the future. It’s a great plan that’s under development.
What we have in Dubai is here and now. That’s what gives the emirate that advantage.