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Middle East Business Magazine
Many corporations, both public and private, fail to achieve their targets while executing strategic plans. Lack of senior executive leadership capacity development is considered one of the main causes for this phenomenon, among several other factors. In this article, Ayman Adhair explores why this is happening and how best to prepare leaders in the Middle East to be better equipped to drive and enable implementation. He argues that implementing integrated succession and talent management, as well as creating a culture of leadership that engages and inspires employees at all levels, is the best way to foster leadership capacity in Middle East and consequently enhance successful implementation of strategic plans.
Its strategic geographic location, ease of doing business and favourable legislation position the UAE at the forefront of e-commerce investment in the region and globally
Dr. Belaid Rettab
senior director for Economic Research & Sustainable Business Development at the Dubai Chamber of Commerce and Industry
The United Arab Emirates with Dubai in the lead has recently been named the top country in the Arab world for ease of doing business. The recognition is well deserved and comes at a highly opportune time as investors increasingly look the region to expand their business and improve their geographical advantage. The UAE is now viewed as the fastest growing market for e-commerce whose value is expected to grow from $2.5bn currently to some $10bn over the next two years. This will largely be due to high internet and smartphone penetration among local residents and expats, as well as improved connectivity and changing consumer attitudes, according to experts.
“In recent years, we have seen a shift in the local business community towards e-commerce,” said Dr. Belaid Rettab, senior director for Economic Research & Sustainable Business Development at the Dubai Chamber of Commerce and Industry.
“Many companies are recognising the importance of building an online presence and platform to market products and services to a wider client base. They have also seen a number of big success stories come out of the UAE, where e-commerce businesses have flourished, expanded regionally and raised significant funding from investors abroad,” he added.
Some of the UAE’s most successful ventures include Souq.com, an English-Arabic language e-commerce platform, often described as the Amazon of the Middle East; it is also the largest in the Arab world. Groupon and Dubizzle are two other highly successful e-ventures, the former being an American multinational platform present in more than 28 countries including the UAE, and the former – a region-wide website for classified ads where you can buy, sell or advertise almost anything for free.
According to Rettab, interest in e-commerce has been on the rise particularly from Dubai Chamber members. This has prompted the organisations to launch a number of comprehensive programmes to help educate and train its members and the wider business community on best e-commerce practices. Its latest initiative to support the sector’s growth includes a partnership with what’s arguably the world’s top e-commerce enterprise Alibaba.com. Launched and based in Hangzhou, China, Alibaba is a leading business–to–business (B2B) e-commerce platform for global wholesale trade. The idea is to further empower businesses to take full advantage of the Internet revolution and facilitate their access to global markets, Dr. Rettab explains.
“The partnership opens the door for companies in the MENA region to explore untapped potential in new markets, enabling them expand their reach globally. We expect to reach an agreement soon to offer our members Gold Membership on Alibaba.com at a discounted rate, providing an even greater incentive for businesses to buy and sell on the platform,” he said.
In response to strong regional demand, Dubai Chamber is now looking to add more e-commerce services. It would seek to aid companies engaged in business-to-consumer (B2C) activities by partnering with the region’s biggest B2C e-commerce platform to help enhance their products and service offerings.
“We have recently introduced a “Trusted Member” Label scheme as a mechanism to help our members and companies throughout the Middle East and North Africa build trust with potential partners online. The logo gives businesses a competitive edge in a crowded market. Moreover, we have been actively working with chambers of commerce from other emirates, in addition to Saudi Arabia, to extend similar the benefits to their members,” Rettab said.
Regardless of location, type of service being offered, and target customers or markets, there are a number of ground rules every e-commerce entrepreneur should know about before proceeding with any major investments. Proper planning, for example, is absolutely essential if you wish your business to be able to compete well on a regional and global scale.
“It is important to remember that online platforms are the face of a brand and should be designed around the needs of tech-savvy consumers. Websites, tools and solutions should evolve in line with consumer demands, which tend to change rapidly. Staying on top of the latest technology trends and digital marketing techniques is incredibly important,” explains Rettab.
Developing a sustainable business model and manpower investment are just some of the challenges investors are likely to face when looking at e-commerce opportunities, according to Rettab, who believes entrepreneurs tend to underestimate the costs of building an online business of scale. To help address these issues, companies should exchange best business practices and lessons learnt in the form of educational and interactive platforms, roundtable discussions, seminars and conferences, Rettab adds.
Over the last few years, the UAE government has expended significant efforts to encourage e-commerce investment. It offers a favourable business environment for entrepreneurs and startups through its various free zones which offer up to 100% foreign ownership and tax exemptions, in addition to low setup and labour costs. The process to set up an e-venture in the UAE is considered a lot simpler when compared to other countries in the region. After securing a trading license, entrepreneurs can register with free zones which allow them to make use of flexible office space at a fraction of the rent cost.
Dubai is at the forefront of the UAE’s e-commerce strategy. It houses three major freezones -- Dubai Internet City, Dubai Media City, and Dubai Silicon Oasis, where startups and small businesses can benefit from operating alongside likeminded organisations with similar interests and ambitions. The government has recently adopted legislation that encourages foreign investment and eliminates administrative obstacles, and is currently looking at allowing full foreign ownership of companies outside free zones in strategic sectors.
“These incentives, along with a rapidly growing e-commerce sector and very high Internet and smartphone penetration rates, make the UAE an attractive market for foreign investors offering plenty of unique opportunities,” said.
Despite most markets staying depressed and global economic growth showing no signs to recover, not at least in the short term, the future of e-commerce both in the region and outside looks overall bright. The sector is growing rapidly and could exceed $3.6 trillion by 2020, according to market research firm Technavio. In the short to mid-term the Middle East and North Africa (MENA) region is likely to see heightened investor interest, with Dubai leading the way in adopting new solutions and technologies as it transitions towards becoming a smart city, Rettab says. He views the emirate as being at the center of the region’s e-commerce boom, serving as a gateway to other Gulf countries, as well as other African and Asian markets with high growth potential.
“Consumers are increasingly turning to e-commerce websites for cost-savings and convenience. At the same time, they are demanding quality products and a seamless shopping experience. This is why e-commerce players in this region must continuously work to improve their standards, solutions and offerings,” he concluded rather positively.
Arab Knowledge Economy & E-commerce: Are we crossing the age of “analogue” to digital economy?
28 Oct 2016 Written by Admin SAEBy Ayman Abualkhair
Are we in a stage of passing the dominant economic age, based on large factories and multinational companies, to a world predicated on freedom of choice, in which small entities would have the potential to compete with large companies, and hence shape the future economy? Are we crossing the age of a real economy to a virtual one, or is it moreover transitioning from a virtual economy to a real economy?
Middle East Business Magazine
Education is not a mere concept it is considered a life journey that is worthy for all of us, of our time and trust. It is not deniable that education is facing challenges and demands structural reforms.
Banque du Liban Has Committed USD 400 Million to Supporting Startups;
GITEX Technology Week Connects Entrepreneurs with Customers and Investors
Dubai, United Arab Emirates
(بالعربية)
Dubai offers Lebanese tech startups the opportunity to gain global exposure and investment at one of the world’s most influential technology events, GITEX Technology Week.
3D Printing controversial technology still in its infancy Turning computer models into physical items
23 Oct 2016 Written by Admin SAE
Middle East Business Magazine
Printing is an industry that changed the world many centuries ago and it continues to evolve with the latest application – 3D printing.
Many of us have wished, at one stage or another, to have a magic machine that prints out our internal ideas by simply connecting a wire to our brains. It seems we’re not very far from this dream thanks to the 3D printer.
Middle East Business Magazine
Convenience products and social media to double sector demand in five years
Dubai, UAE: The Middle East’s packaging industry is undergoing rapid transformation with increasing demand for sophisticated automated solutions, according to exhibitors at Gulfood Manufacturing - the Middle East’s biggest food manufacturing, processing and packaging, logistics and materials handling exhibition - which runs at Dubai World Trade Centre (DWTC) from 7-9 November, 2016.
UAE-based Al Thika Packaging - one of the leading domestic exhibitors participating in ProPack Middle East, the dedicated processing and packaging zone within Gulfood Manufacturing - predicts regional sector demand could double within five years as the food processing sector strives to become more competitive in response to increasing consumer demand for convenience products.
“Automated solutions are being sought as companies try to reduce overhead labour costs and keep up with global supply trends,” said Tim Ansell, Al Thika’s Sales Director. “International trends in food products are coming to market much quicker in the UAE as people see through social media what is being offered elsewhere – it’s prompted this market to react faster to global trends.
“Food manufacturers are moving into ready meals, pre-packed ingredients and fruits and vegetables - we are following Western trends. The growth over the past six to seven years has not let up and, put simply, there is a desire to implement new technology; the regional industry is more open to innovation.”
Ansell says demand for high-end automation is coming largely from Saudi Arabia and the UAE, though there has been some recent pick-up from manufacturers and processers in Oman and Kuwait. High-end automation now represents 20 per cent of Al Thika’s sales with Ansell predicting that number will double within five years.
“Such is the demand from the food, drink and pharmaceuticals business that we have had to take on a Project Engineer to analyse customer requirements and produce integrated solutions and equipment,” he said.
We’ve moved from offering just a tray sealer or x-ray for example, to providing turn-key production lines with process equipment, conveyors, packaging machines and automated carton erector loaders. Customers want a one stop service, hassle free installation and local service, so this is playing to our strengths” he said.
According to a recent Euromonitor report forecasts, the Middle East and Africa packaging industry will register the highest growth of any region up to 2019, recording a 5.5 per cent compound annual growth rate (CAGR).
The forecasts, says Ishida, a leader in the design, manufacture and installation of complete weighing and packing line solutions for the food industry, could further be impacted by the emergence of export-oriented ‘power’ players within the Middle East, particularly from snack, dates and poultry producers.
Ishida is planning to capture a growing market share with packaging system demonstrations at ProPack Middle East featuring weighers and X-ray inspection systems.
“Apart from rising automation to reduce packaging and waste costs at the manufacturing, retail and end-consumer stages, to increase speed and efficiencies there will also be increasing demand for check-weighers, metal detectors, X-ray inspection systems and seal testers to secure quality control for exports outside the region,” said Torsten Giese, Marketing Manager.
Giese foresees huge changes within the food production sector, all of which will impact the packaging sector. “There will be polarisation. Politically stable countries will experience growth in convenience and ready-to-eat sectors and ‘luxury’ goods while politically unstable regions will fall back to a more agro/self-sufficient positions.
“Some large players will expand to produce and distribute their food products more efficiently and into more regions, thus becoming regional ‘power players’ while others will look to expand down or up in the food logistic chain. For example, growers will move into manufacturing and distribution; so potato growers currently producing potato chips and snacks will diversify to include frozen chips and other potato products.”
ProPack Middle East will be a weathervane to the food manufacturing industry’s transformation, according to Trixie LohMirmand, Senior Vice President, Exhibitions & Events Management, DWTC, the Gufood Manufacturing organiser.
“Through the state-of-the-art exhibits, visitors will be able to track the evolution of this vibrant regional industry which is at an undisputed high point in its development,” said LohMirmand.
“With Saudi Arabian and UAE producers looking to satisfy increasingly sophisticated domestic demand and also eyeing lucrative export markets, innovative packaging and weighing solutions which meet regional and international standards will be high on buyers’ shopping lists.”
The ProPack Middle East segment will feature 905 exhibitors from 30 national and industry pavilions, comprising approximately 50 per cent of the total companies at Gulfood Manufacturing 2016, which is 20 per cent bigger than last year. The show will fill 13 halls at DWTC and feature 1,600 food manufacturers, suppliers and industry service providers – up 60 per cent on last year.
Gulfood Manufacturing also features segmented areas including Ingredients Middle East, featuring fine and functional ingredients and the latest bulk and commodity ingredients, innovations, tastes and flavours; and Logistics Solutions Middle East, a showcase for firms involved in material handling, transport and commercial vehicles, IT and technology solutions, warehousing operators, facilitators and service providers.
Source: http://middleeast-business.com/
Published annually, the ISLAMICA 500 is a business guide providing hard-to-find biographical details for 500 of the world’s most prominent and influential personalities in the Islamic world and economy.
Following a bleak, over a decade-long period of international sanctions and economic isolation, Iran is emerging as an unlikely investment haven for savvy businessmen from around the world.
This year, Saudi Arabia’s Council of Ministers gathered and agreed to implement the Vision 2030, which promises to enact sweeping changes to reduce the kingdom’s dependence on oil. Not only does Saudi Arabia’s new economic plan seek to create a more productive private sector and workforce, it also hopes to introduce sustainable fiscal management policies and increase investment opportunities within and beyond Saudi’s borders.
One of the biggest steps taken to encourage an investment-driven economy in Saudi Arabia has been the restructuring of the country’s sovereign wealth fund also known as the Public Investment Fund (PIF). By combining the proceeds from Aramco’s initial public offering and various other assets, the PIF, currently holding $100 billion, will eventually be worth an estimated $2 trillion. Ultimately, providing Saudi Arabia with the financial capital needed to create a more diversified economy and become a stronger regional and global player.
Attracting Foreign Direct Investment to Saudi Arabia
On a recent visit to the U.S.A, the Deputy Crown Prince Mohammed bin Salman, second deputy premier and defense minister, met with senior U.S. officials and business executives to rally support for the recently approved National Transformation Plan (NTP) of 2020 and convince American companies to invest in Saudi Arabia. This 5-year plan aims to expand Saudi Arabia’s private sector, while simultaneously promoting “Saudization” and foreign investment.
By introducing a number of key policy reforms, such as reducing the average resolution time for commercial cases by 30%, cutting the percentage of delayed projects from 70% to 40% and speeding up the visa issuing process by two-thirds, the NTP aims to make it easier for people to conduct business in Saudi Arabia. In addition to adding more than 450,000 nongovernment jobs by 2020, creating new investment opportunities worth $613 billion and increasing the foreign direct investment in Saudi Arabia from $8 billion to $19 billion.
According to Mckinsey and Company’s recent Saudi Arabia Beyond Oil report, the following 8 sectors will require an estimated $4 trillion in investment to grow in the kingdom: mining and metals, petrochemicals, manufacturing, retail and wholesale trade, tourism and hospitality, healthcare, finance and construction. To further ease the investment process, the Saudi Arabian General Investment Authority (SAGIA) has even developed an Android and iOs app that investors can use to explore and discover the investment opportunities available in the country.
Saudi Arabia’s Investment in Foreign Economies
Not only does Saudi Arabia’s 2030 Vision aim to expand the worth of the PIF to approximately $2 trillion, it also intends on increasing the portfolio’s foreign investment share from 5% to 50% by 2020, according to Yasir Alrunmayyan, the PIF’s Secretary-General. By increasing foreign investment, Saudi Arabia hopes to support the growth of Saudi investors and companies abroad to further diverse its existing investment portfolio and economic growth.
While the PIF’s recent $3.5 billion investment in Uber has been praised as a bold move from Saudi Arabia to reinvent its economy, there have also been several other promising investment initiatives in the past two months. In April, Saudi Arabia formed a joint coordination council with Jordan to identify potential opportunities for PIF to invest in the Hashemite kingdom. Although the size of the investment fund and the sectors that will receive its support have yet to be determined, it’s clear that the Jordanian economy needs this influx of capital now, more than ever, to generate jobs for its citizens and economically integrate the country’s 1.5 million Syrian refugees.
King Salman bin Abdulaziz Al Saud also visited Cairo in early April to announce the establishment of a $16 billion investment fund to be shared between the PIF and the Egyptian government. Saudi representatives also signed 17 investment deals and memoranda of understanding for cooperation in the agriculture, industry and infrastructure sectors. Other projects in the works include the creation of an economic free trade zone in Sinai and a new industrial city near the Suez Canal.
During this visit, both Saudi Arabia and Egypt also made a historic agreement to construct a bridge over the Red Sea to connect the two countries. When asked about the proposed bridge, Prince Mohammed said that the crossing would link Europe and Asia, provide building and investment opportunities and help move billions of dollars in cargo across the Red Sea. While no detailed plans have been revealed yet, it is expected that the bridge will span from Nabq on the Egyptian side to Ras Al Sheikh Hamid on Saudi Arabia's western coast.
A Role Model of Economic Reform
Since announcing the 2030 Vision, Saudi Arabia has taken great strides to translate this plan into action, which is already strengthening diplomatic relations and re-energizing economies in the MENA region. If the Saudi government is also able to successfully implement the necessary changes required to improve the ability of foreign investors to conduct business within its borders, the kingdom could become a model for economic reform and global community building in the future.
