Six pathways to the future
The financial downturn has fundamentally changed the way the world does business, hopefully for the better.
But as companies, and even employees who forged their careers while the going was good, adapt to the new economic environment they need to be aware of the major changes around them.
Edward Reilly, the chief executive of the American Management Association International, was in Abu Dhabi recently to talk with local executives about the top trends his company's subsidiary, Management Centre Europe, has identified.
"These trends will have a profound impact on the way we manage our companies, and the kinds of skills needed to lead and work in the companies that we operate," Mr Reilly says.
Trend one: speed and diversity of the economic recovery
Much of the Gulf region is experiencing a healthy recovery after the rebound in global oil and gas production and consumption. But growth in the West and Japan could prove slower than expected, Mr Reilly says, as countries struggle to deal with effects of globalisation, ageing populations and deficits built up over many years.
"These could affect Gulf Co-operation Council [GCC] exports but I think you're doing the right things to maximise your benefits and minimise your risks," he says.
"The pace of development and change in the Gulf economies is breathtaking." A baby boom in the past 15 years in the Gulf countries will also be an enormous economic driver and influence in the years to come, Mr Reilly says.
Trend two: resource demand
In the past 15 years some 1.2 billion people worldwide have entered the middle class, doubling the number of the people on the planet living a consumer lifestyle.
"Around the world companies are under pressure to reduce their oil consumption or at least contain its growth, but demand for oil is expected to increase, mostly driven by growth in China and India and the new rich countries," says Mr Reilly.
Oil-rich Gulf countries will benefit as a result, but green and clean technologies will present big business opportunities as industry strives to find alternative energy sources.
Better agricultural processes and more efficient use of water will also be required for bigger populations.
Trend three: information technology
IT has already transformed business, but virtual communication is set to become more important in the future, presenting further opportunities for companies willing to invest in it.
"Web 2.0 tools, social networking, LinkedIn, Facebook and Twitter are deeply transforming our society," says Mr Reilly.
"We haven't fully yet understood how businesses can harness the power of social networking yet to its advantage, but there's a lot of interesting experiments going on."
Trend four: growth model
The Gulf countries and the rest of the world are moving away from dependency on oil as the sole driver of their economies.
"It is wise to be investing in diversifying other business sectors to achieve higher and more sustainable growth, and to create more varied jobs," says Mr Reilly.
"Updating education is essential in this process. GCC countries are wisely investing in education and developing … men and women as part of their national strategies."
Trend five: government engagement
Government policy and frameworks are more important than ever to shape the new economy.
"The Government needs to be a partner for business and the private sector," says Mr Reilly.
"In the GCC you are blessed to be able to make good investments in building your future, building infrastructure."
Trend six: consumer behaviour is changing
Consumerism in the West and Japan is still high but seems to be slowing. People are paying down their debts, saving more and when they buy, they focus on quality and durability.
"In the new rich countries the emerging middle class is a demographically huge and vast growing market," says Mr Reilly.
"These people want products that are affordable, useful and can stand up to global conditions, often different in each region."
Published: May 10, 2011 04:00 AM