By improving innovation capabilities, Middle East businesses can successfully avert a loss of more than $400 billion in enterprise value that could be eroded through ongoing technological disruption elsewhere, according to a new report.
“With unrealised market opportunities in the Middle East, industry leaders must change their approach to innovation,” said Xavier Anglada, managing director of Accenture Digital in the Middle East.
In its latest report, Dublin-headquartered Accenture said regional companies could lose huge capital due to limited innovation capabilities.
The report noted that although many companies have increased their spending on innovation (such as investing in research and development) in recent years, these investments have not necessarily led to above-average growth. At a global level, return on innovation spend has declined by 27 per cent over the past five years.
“By preparing a comprehensive digital strategy, they [Middle East companies] will be able to pivot to new growth opportunities,” said Mr Anglada, a co-author of the report.
Accenture’s findings are based on an analysis of 200 of the largest companies by revenue across 18 industries and a survey of 150 top executives from 11 industry sectors across the UAE and Saudi Arabia.
“The digital revolution has exposed abundant value opportunities for companies to raise efficiency and develop new kinds of products and services,” said Yusof Seedat, a research director at Accenture and co-author of the report, adding, “Companies that can leverage innovation to drive deep organisational change are more likely to unlock trapped value.”
In the past few years there has been an uptick in investment in adopting new technologies in the region.
In a survey of senior executives, 53 per cent in the Middle East and North Africa region say that Artificial Intelligence (AI) and robotic process automation are the most prominent technologies on their boardroom agendas – compared to 46 per cent globally, according to EY.
The Middle East and Africa region’s investment in AI is forecast to reach $114.22 million by 2021, representing a compound annual growth rate of 32 per cent for the 2016-2021 period, according to the US research firm International Data Corporation.