Description
Economic growth will strengthen in the GCC region despite oil-price complications, mainly due to the economic diversion from the oil sector to non-oil sectors and also due to initiatives and strategies to encourage private enterprises. Apart from robust economic growth, the business environment of the region will also undergo a radical change due to the emergence of new business models. These new business models will emerge due to the digital transformation of industries as well as other social and political changes. Social heterogeneity, which is identified by the differences in income, ethnicity, gender, and age, will exaggerate in this region. This will have a far-reaching impact on business models, economic trends, and also social dynamics. This increasing social diversity will lead to the advent of distinct generational groups such as Gen Y and Gen Z. Rising participation of women in the workforce and the growing affluent class will also have a huge impact on the economic and business environment of the region. Diverse attitudes, motivations, and beliefs among these groups will compel businesses to focus on products and services that are personalized to suit the unique demands of each group. Advancement in technologies like 5G, augmented reality (AR), virtual reality (VR), and AI will make way for new business models in this region. In the last decade, the GCC region endured major economic transformation, with the aim to diversify its economy away from the hydrocarbon sector. In the coming decade it is expected that technology will play a very significant role in further transformation of the economy from an oil-dominant to a digital society. Digital transformation in sectors such as retail, energy, manufacturing, healthcare, and entertainment will help in the growth of the non-oil economy in the region.
• Connected Living: Internet is expected to account for 5% of national GDP by 2030 up from 4.1% in 2018. All six markets are expected to launch 5G mobile services by the end of 2020. Hence, several digital initiatives to improve city governance to citizen’s lifestyle will be the highlight of the region.
• Fintech Revolution: There are more than 250 fintech start-ups in the GCC region across a population of close to 400 million. Regional fintech initiatives will expand fintech activities by 50% in the next 5 years.
• Online Retail: The GCC retail sector is expected to grow to $405 billion by 2030, with the UAE and Saudi Arabia leading retail sales in the next 5 years, accounting for 77% of total GCC sales. Physical stores will continue to dominate, but online retailing and business-to-business (B2B) marketplaces are also growing.
Socioeconomic trends such as Gen Z growing as a future consumer base, rising GCC affluence, and growing participation of women in work will create future opportunities for this region.
• Gen Z: Gen Z is expected to account for nearly 1/4th of GCC’s population and thus, is a significant influencer on the consumer base. Gen Z will create equal opportunities for even lesser known brands as long as the value proposition is experienced.
• Growing population of millionaires in GCC: UAE is expected to witness 60% growth in the number of ultra-high net worth individuals (UHNWI) from 2019 to 2030, thus, opening opportunities for numerous luxury products and services markets.
• Participation of women in the workforce: By 2030, participation of women in the workforce is likely to cross 50% in most GCC countries, with it reaching 25% in KSA and 31% in Oman. This is expected to add $90 billion to KSA’s economy alone.
Non-oil sectors such as education, mega event projects, and renewable energy will also create future investment and business opportunities in the region.
• Future of education: Opportunities are abundant in K-12 and tertiary and vocational education. Increasing preference for natives in employment is generating a huge demand for skillset training.
• Sporting events: The GCC sport event industry is expected to witness 8% to 10% growth till 2030. This will require the development of sports complexes and sports facilities. The demand for hotels will get a boost as sports tourists visit the region.
• Renewable energy: Cumulative installed generation capacity for renewable energy across GCC is expected to reach 72,300 MW by 2030.
In the next decade, GCC 's non-oil sectors will continue to dominate the economy. Increased digital penetration, advanced technologies such as 5G, artificial intelligence, robotics, and AR/VR lead to the emergence of Mega Themes that will have a far-reaching impact on the region and create future opportunities for this region.
Don't have an account? Create One!
Already have an account? Login!
Connect With LinkedIn
Use your Linkedin account to login or register within our store.You're just one click away.