op 200212 growing-1581417270810
Image Credit: Seyyed de la Llata/ © Gulf News

Shaping the future essentially means planning to build a robust, prosperous and sustainable economy, as well as a successful development model that meets the competitive demands of the global economy. This ensures that the concerned country excels in various areas of development compared to its counterparts worldwide.

The great human transformations were associated with economic development. The move from a primitive life, based on pastoralism and fruit gathering, to the agrarian production pattern, marked humanity’s first step towards the earliest phase of human civilisational development. This lasted for centuries, until the Industrial Revolution, which began in the 18th century and underwent several cycles (the first, second and third industrial revolutions), culminating in the current stage of human civilisational development. Today, humanity is on the threshold of the Fourth Industrial Revolution, around which global economic development of the future will pivot.

While the success of the UAE’s economic diversification policy during the last few decades has created a pioneering development model regionally and globally, oil still represents the backbone of the national economy.

- Dr Jamal Sanad Al Suwaidi, ECSSR director-general

Discussions on how best to shape the UAE’s future in the next half century revolve around how to move from the oil-based economy to a post-oil era. This can be achieved by building a sustainable economic development model that strengthens the significant progress the country has achieved in the last 50 years, making the UAE’s economy one of the greatest in the years to come. In this way, the UAE will be an integral partner in forming the future of the global economy. This leads us to consider the sectors that could advance the UAE economy and realise these goals.

Oil — a major driver of the economy in the past 50 years

Since the early 1970s, oil has been the most important driver of the Gulf economies, and the UAE economy in particular. It provided enormous financial revenues that the UAE has effectively invested in building the Union state, modernising its infrastructure and launching its pioneering development model regionally and globally. During the last 50 years, oil has clearly dominated the indicators of the UAE national economy, just like the other Gulf economies.

The significant role that oil played as a driver of the UAE economy in the last 50 years created an excessive dependence on it, which brought numerous economic and development problems. This became especially apparent during global oil price fluctuations, which were the result of economic, strategic, political and social factors. Therefore, the national economy endured periods of instability, especially when the oil price collapsed. This instability — in addition to the prevailing political view that oil is a finite resource, or one that will lose its value eventually (as was the case with coal, for example) — led national decision-makers to search for economic alternatives to oil. They began to work towards diversifying the sources of national income, so the economy would no longer be vulnerable to the fluctuating prices of this strategic commodity. This was done by investing crude oil revenues to accelerate the process of diversifying sources of income.

While the success of the UAE’s economic diversification policy during the last few decades has created a pioneering development model regionally and globally, oil still represents the backbone of the national economy. With a clear progress in diversifying the economy, discussions on the post-oil era and the search for new drivers of future economic growth will remain a crucial factor in determining the UAE’s future.

Drivers of future economic growth

Starting from the idea that beginnings determine the end result, it can be argued that there is widespread expectation that the global economy will be predominantly shaped by the unprecedented knowledge and technological innovations the world is experiencing today. The global economy is witnessing the beginnings of the Fourth Industrial Revolution, also known as the Digital Revolution, with key features that include 3D Printing, the Internet of Things, Big Data Analytics, Robotics, Cloud Computing and Artificial Intelligence, as well as other developments. The major challenge here is that the transformation the world is experiencing in knowledge and technology is just the beginning. No one knows how this knowledge and technology revolution will play out.

This, of course, is no excuse for inaction. It is a call for further effort and hard work to keep abreast of this revolution. The role of technology is not limited to creating new economic sectors and areas of employment; it also includes enhancing the efficient use of available resources and productivity across existing sectors, by providing them with state-of-the-art technologies that respond well to changing conditions and challenges. Technology, according to some people, is the power that drives every sector, whether existing or new. Some experts describe the Big Data economy as the “new oil”, which could revive the economies of countries in the future if they make good use of its potential and abundant opportunities.

What makes us optimistic is the fact that our wise leadership is not only aware of the importance of these transformations, but is also determined that the UAE is effectively involved, with clear-cut strategic visions and institutional frameworks. This includes the creation of the UAE Council for the Fourth Industrial Revolution, the Emirates Scientists Council, the Ministry of Artificial Intelligence, and the Mohamed Bin Zayed University of Artificial Intelligence. The wise leadership has also launched many aspirational strategies, such as the UAE Strategy for Artificial Intelligence, and the UAE Strategy for the Fourth Industrial Revolution, as well as many more strategies and initiatives.

The UAE has joined global efforts to find new energy resources to maintain its leading role in international energy markets. It has made significant progress in this area by focusing on renewable energy and investing in clean nuclear power.

- Dr Jamal Sanad Al Suwaidi, ECSSR director-general

To sustain this approach, the private sector, small- and medium-sized enterprises and start-ups, as well as innovative entities and individuals, need to join the efforts aimed at keeping pace with the knowledge and technological revolution. A full-fledged system for encouraging innovation and attracting talent and entrepreneurship in all fields, particularly in the knowledge industry, should be developed, and more attention and resources should be dedicated to scientific research institutions. Our wise leadership is working relentlessly to address them. His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, when he said: “We focus our efforts on building the future of the UAE based on a forward-looking vision that adopts global trends and developments, supports the brightest young minds, encourages new innovations and creative ideas, and embraces advanced technologies. We want the UAE to be a partner of choice for technology firms and AI talents from around the world. We want the UAE to be the best in the world in developing this futuristic sector and investing in its potential.” This prudent approach is enough to ensure that the UAE will achieve its future aspirations for a robust, thriving and sustainable economy.

Besides these areas, there are other sectors that could constitute vital drivers of future economic growth. Some of these are new, such as space technology, or what could be described as the space economy. This sector plays an increasing role in the advancement and revitalisation of modern economies due to the use of satellites in aviation and maritime communications, exploration of the earth’s resources, remote sensing, disaster and crisis management, transportation, and urban and physical planning. This makes all these activities a driver of economic growth, in addition to providing jobs across the various stages of production of space sector technology.

Tourism and travel is a sector that will continue to be a catalyst for growth in the global and national economy. Therefore, it is important to keep developing services provided to tourists, to use modern technologies to understand their preferences and introduce new means of entertainment tailored to all ages and groups. Energy is another of these sectors, as it is the backbone of all developed economies. In this context, it is important to refer to two important points. First, the UAE has joined global efforts to find new energy resources to maintain its leading role in international energy markets. It has made significant progress in this area by focusing on renewable energy and investing in clean nuclear power. Second, it is projected that oil will last another 50 years or so, and thus, there is time to develop the sector further, taking advantage of its financial gains and investment in oil-related industries. These industries will be less sensitive to fluctuations in the oil price, while contributing a higher added value to the economy. Another sector is industry, which is in need of significant development to become more focused on knowledge and technology. This is in addition to transport and infrastructure, as well as other sectors that could play a critical role in shaping a very promising future for the UAE economy.

— Dr Jamal Sanad Al Suwaidi is a UAE author and director-general of the Emirates Centre for Strategic Studies and Research.

more from the writer