GCC: Digitalization and Sustainable Processes Key to Its Transformation

The Gulf Cooperation Council (GCC) region is currently amid a significant transformation driven by various compelling factors. These include the global emphasis on clean and sustainable energy, prompting a need for economic diversification beyond the traditional oil and gas sector.

The emergence of data-driven, modern job roles is reshaping the employment landscape, demanding unprecedented levels of upskilling and reskilling. Additionally, there is a critical need to strike a balance between economic growth and sustainability, particularly in alignment with Sustainable Development Goals, including climate action and responsible consumption and production.

Current Status:

As an illustrative example, Saudi Arabia's economy heavily relies on oil, with 80% of its export income derived from this sector as of 2022. Furthermore, over 40% of its GDP is dependent on petroleum exports, making it the third-most oil-reliant country globally, following Kuwait and Libya. These figures have seen a decline from a decade ago, when in 2012, over 90% of export income and 45% of GDP were tied to oil.[i]

Therefore, the region’s focus can be categorised as follows:

• In-Country Value (Localization) – Focuses on Make in the Region, Upskilling and reskilling of the workforce, Innovations originating from the region, start-up ecosystem, etc.
• Diversification in the region – Diversifying in the region away from Oil and Gas sector and investing in sectors such as Manufacturing (Process, Discrete, Batch and Hybrid), Entertainment, etc.
• Backing the processes of various sectors digitally - Digital solutions and interventions to ensure that various processes can scale and make it easier to reach a wider audience.
• Ensuring that all this happens sustainably – Crafting a sustainable journey to ensure that the progress happens in environmentally and socially accepted norms. ?

With countries committing to sustainability goals aimed at achieving carbon neutrality between 2050 and 2070, the GCC region's focus on these themes is not only timely but also crucial.

Key activities in this transformative journey, as per 弗若斯特沙利文公司 analysis, include:

• Placing and passing regulations on various dimensions of SDGs
• Collaborating with public and private enterprises
• Carbon and Cost calculations
• Carbon-related financial disclosures
• Creating awareness about sustainability among the population
• Ensuring there is a collaborative effort to uplift the community where the businesses operate
• Gender Equality
• Good health and well-being

Way Forward:

The region is actively diversifying its industry base, moving away from oil and gas, and investing in regional manufacturing. This strategic shift is prompted by ongoing geopolitical conflicts and the impact of the pandemic. The goal is to achieve self-sustainability across as many sectors as possible. To facilitate efficient and seamless progress, it is imperative to establish well-defined processes that are digitally supported, enabling operational scalability and enhancing transparency within the system.

How can Frost & Sullivan help?

Frost & Sullivan’s Manufacturing Transformation Practice is appropriately positioned to help clients transform their journeys in Manufacturing Excellence, Digital Transformation and Sustainability Growth opportunities. Through diagnostic analysis, it evaluates an organization's current maturity, benchmarks it against competitors, identifies best practices, and pinpoints areas for improvement, propelling the organization forward in its transformation journey.

Authored by:

Rahul Sharma , who is Vice President & Global Head of the Manufacturing Transformation Practice at Frost & Sullivan.

He has now moved base to Dubai to reflect our true commitment to the region in transforming itself sustainably.

To Schedule a Growth Pipeline Dialog?, click here

[i] https://www.glimpsefromtheglobe.com/features/analysis/what-saudi-vision-2030-means-for-the-future-of-oil-dependent-economies/

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