Why shortage of this 'fuel' keeping UAE executives awake

Falling oil prices in the region have done little to undermine business confidence in the Gulf according to the 10th Oliver Wyman/Zogby survey of 219 senior executives in the UAE, Saudi Arabia, Qatar, and Kuwait.

It’s a shortage of fuel for innovation that’s more worrisome - the needs for investment, talent, research, and infrastructure that are stubborn obstacles to innovation within the four countries, and especially in the UAE.

Optimism across the Gulf had been tempered by events in the last survey (December 2014) but executives have rebounded.

The UAE and Qatar have seen steady increase over the past five years (to highs of 93 per cent and 89 per cent of respondents, respectively), while Saudi and Kuwait have seen a significant jump in confidence from last year, when confidence had decreased somewhat.

Saudi confidence jumped 33 points, from 56 per cent to 89 per cent and Kuwait jumped a full 55 points to 93 per cent.

At the same time, pockets of concern remain. All respondents noted the negative impact of falling oil prices and the decline in government revenues.

More interestingly, sourcing financial capital for innovation is of increasing concern in the next five years (nearly half of respondents (48 per cent) find it a very important risk.

Finding the talent to innovate is a problem overall, and particularly in the UAE, where 75 per cent of respondents said this was a very important risk in the next five years.

A majority (64 per cent) of UAE respondents and 67 per cent of Kuwaiti respondents see the lack of new ideas/research to innovate a very important obstacle to innovation over the next five years.
Saudi and Qatari executives are more measured – only 38 per cent of Saudis and 36 per cent of Qataris see this as a very important obstacle.

Outside economic shocks are seen as the greatest threat to business conditions by 67 per cent of UAE respondents.

This year’s poll also saw an interesting reverse in investment focus.

Last year, when asked which offers the best investment opportunity for growth, there was nearly uniform support for investment in the home country or in the GCC.

This year executives in Saudi Arabia and Kuwait saw a growth in interest in developed and especially in developing countries.

"Executives in the region are still playing the long game in their concern for the ways to make their achievements sustainable,” notes Pedro Oliveira, Partner and Middle East & Africa Region Head for Oliver Wyman.

“They want continued internal investment, a flexible and capable workforce, secure and free-flowing business knowledge, and a continued strong partnership with their governments.”

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