Good morning, Smashi Business Readers!
In today’s edition, we dive into the exciting advancements shaping the UAE and Saudi Arabia’s economic landscape.
First, we look at ADNOC, Masdar, and Microsoft joining forces on a groundbreaking initiative to harness AI and low-carbon solutions, accelerating the UAE's path to sustainability and innovation.
Next, we tackle the UAE’s job market, where an influx of foreign talent is driving down starting salaries — great news for companies, but a challenge for employees seeking wage growth. How will this impact hiring trends?
Lastly, we celebrate Saudi Arabia’s latest milestone in tourism, as it climbs to 12th globally in international tourist spending. With world-class destinations like AlUla and the Red Sea, the Kingdom is positioning itself as a top destination for global travelers.
But before that: You can join our Whatsapp channel too to receive updates from the business world.
ADNOC, Masdar, and Microsoft Team Up to Drive AI and Low-Carbon Innovations
?? What is it about?
- ADNOC and Abu Dhabi Future Energy Company (Masdar) signed a Strategic Collaboration Agreement (SCA) with Microsoft to drive a range of AI and low-carbon initiatives.
- The collaboration, announced at the ADIPEC event in Abu Dhabi, aims to decarbonize today’s energy systems and accelerate the development of a sustainable energy infrastructure.
?? Why it matters?
- The partners will explore powering Microsoft's data centers with renewable energy from Masdar, leveraging ADNOC's ownership in the company.
- The trio will use AI to advance carbon capture and storage (CCS), as well as explore projects focused on low-carbon ammonia and hydrogen.
- The agreement aims to accelerate AI deployment across ADNOC's operations, enhancing efficiencies, supporting methane reduction efforts, and promoting biodiversity through improved environmental monitoring.
?? What’s next?
- This collaboration showcases ADNOC’s commitment to reducing emissions, with AI solutions enabling its ambition of Net Zero by 2045 and a target of near-zero methane emissions by 2030.
- With AI being heralded as a critical tool for energy transformation, this initiative underscores the potential of AI in optimizing renewable energy systems, driving decarbonization, and addressing energy challenges globally.
- The partners will jointly work on solutions to meet the demands of the AI age while ensuring sustainability. By merging the strengths of the technology and energy sectors, the collaboration aims to unlock AI's potential in securing a sustainable energy future while delivering value across the global energy landscape.
Big Influx of Foreign Talent has Pushed Down Starting Salaries in the UAE
?? What is it about?
- Starting salaries for professional services roles in the UAE have declined by 0.7% on average in 2024, with finance and accounting roles seeing the steepest drop at 2.1%, according to Robert Half's 2025 UAE Salary Guide.
- The influx of foreign talent has created a surplus of skilled professionals, leading to increased competition and downward pressure on salaries, particularly in the finance, accounting, IT, technology, and HRsectors.
- Some accounting roles have experienced salary reductions of up to 23%, reflecting a shift in the job market. Despite the overall decline in salaries, certain sectors, such as in-house legal roles, saw starting salaries rise by 1.6%, driven by the demand for mid-level legal counsel, especially from businesses preparing for IPOs.
?? Why it matters?
- The influx of expats into the UAE is the primary reason for the salary decreases. With a larger pool of talent available, especially in sectors like finance and accounting, companies have more options to choose from, which results in lower starting salaries.
- This trend is further reinforced by the UAE’s success in attracting foreign professionals with new visa programmes and incentives for businesses to expand, which has increased the labor supply.
- Additionally, businesses that previously outsourced tax functions are now hiring in-house financial roles following the corporate tax introduction in June 2023. While demand remains high for specialized roles, especially in compliance and financial planning, the larger talent pool has diminished the market value for many positions.
?? What’s next?
- While the supply of talent has increased, businesses should be cautious about the impact on existing employees. Pay stagnation is leading to job dissatisfaction and could result in higher turnover as employees seek better opportunities once market conditions shift.
- Leaders will need to focus on retention strategies, such as competitive remuneration packages and improved job satisfaction, to maintain their workforce.
- Employers may also face challenges in finding candidates with specific skillsets, such as Arabic-speaking professionals or those with UAE experience, making it necessary to offer competitive salaries for these niches. As the competition for talent in certain areas like compliance and AI-focused rolesgrows, companies will need to strike a balance between leveraging the influx of talent and providing fair compensation.
- In the near future, the job market in the UAE may see continued pressure on salaries in saturated sectors, but companies will need to adjust their strategies for more specialized roles, particularly as cost-of-livingconcerns drive more workers to seek higher wages. By 2025, over 65% of employees are expected to explore new job opportunities, with 30% citing rising living costs as a major motivation for change.
Saudi Arabia Ranks 12th Globally in International Tourist Spending, Hitting $36 Billion Milestone
?? What is it about?
- Saudi Arabia continues to make strides in becoming a premier global tourist destination. In 2023, the Kingdom achieved a significant milestone, ranking 12th globally in international tourist spending, with tourists spending $36 billion USD.
- This represents a major leap of 15 ranks since 2019, as reported by the UN World Tourism Organization. This rise is part of Saudi Arabia's broader strategy to position itself as a world-class destination for high-spending travelers.
?? Why it matters?
- Saudi Arabia leads G20 countries in terms of visitor numbers, with a 73% increase in international arrivals and a 207% rise in global tourism revenue between January and July 2024, compared to 2019.
- International tourism revenue in Saudi Arabia reached its highest levels in 2023, with $68.2 billion USDin total tourist spending, including both international and domestic travelers.
- Investments in mega-tourism projects like the Red Sea, AlUla, and Qiddiya aim to attract high-end tourists, offering unique experiences rooted in culture, heritage, and luxury.
?? What’s next?
- Saudi Arabia’s ongoing efforts in expanding its tourism infrastructure and offerings are expected to further solidify its position as a global tourism hub.
- The country will likely continue to focus on luxury tourism and cultural attractionswhile maintaining its leadership in the Middle East’s tourism growth. This progress aligns with the Kingdom’s vision to diversify its economy and reduce reliance on oil revenue.
Subscribe to our daily newsletter here: https://aug.us/4fZIDus
Latest episodes of Smashi Business Show:
Watch Smashi Business Show daily here: https://aug.us/3BTU2MY
