Opportunities in the Middle East for foreign companies

Photo:

In conversation with Prisila, correspondent, Asia Business Outlook Magazine. Robin shares his views on in what ways can advance IT solutions contribute to enhancing operational efficiency for businesses in the Middle East

Sustainability factor into the business priorities of companies operating in the Middle East

Many countries in the Middle East are now participants to the UNFCCC COP Paris Agreement – UAE, KSA, Oman, Lebanon, Jordan, Iraq, Egypt. This clearly reflects their intent to make a difference with regards to emissions, a key contributor towards overall sustainability. We have also seen many of the countries launch, or advance towards, integrated waste management strategies. Commitments at a national level are now cascading down to the corporate sector, and we are seeing companies in the region increasingly focus on sustainability.

Another contributor to sustainability in the region, is the push by global companies operating here, as part of their global commitments towards sustainability.

Of course, differences exist between the agendas/commitments/preferred tools and pathways. Our recommendation to foreign companies is to first assess the baseline (acquiring a thorough understanding of the landscape in each country, and establishing what is doable and achievable). Thereon, they should focus on stakeholder engagement, with an attempt to showcase best practices/success stories from other parts of the world, and attempt to work collaboratively to improve the ecosystem itself. Collaboration would be the key enabler for this to succeed.

 Current business landscape in the Middle East, and the factors make it an attractive market for foreign companies seeking growth?

This is an exciting time for any business entity to be in the Middle East. The business climate/ landscape is now extremely conducive for incoming investors (foreign companies), providing unparalleled access to the core needs of investors –

1) Market (Middle East and broader region of Indian subcontinent and Africa),

2) Funding (supported by a vibrant and rapidly improving ecosystem of companies providing different instruments and enabling competitive access to funds),

3) Infrastructure (ports and airlines connectivity, IT availability, R&D support, further improvements happening in land transport).

4) Access to manpower – with considerable flexibility on bringing in manpower into the region to address skills gaps that exist otherwise

We are also seeing constant improvements in rankings of the countries in the region on global indices that measure competitiveness and ease of doing business (e.g. Saudi Arabia, UAE), a result of the efforts made by countries to improve the overall business climate.

We are also seeing an increasing focus on the part of governments in the region towards investment promotion and facilitation (e.g. Saudi Arabia, UAE, Oman), providing a favorable climate for investors to participate in the region.

Advanced IT solutions contribute to enhancing operational efficiency for businesses in the Middle East

Automation of Routine Tasks: Automation tools can help businesses automate repetitive processes, reducing manual labor and the likelihood of human error. This includes solutions such as robotic process automation (RPA). RPA helps businesses in tasks such as data entry, customer service, helpdesk, and inventory management.

Data Analytics: Big Data tools and analytics software can allow businesses to make more informed decisions by gleaning insights from vast amounts of data. This can help in identifying inefficiencies, predicting trends, and making proactive decisions. One great example is developing urban development and observation.

Artificial Intelligence (AI) and Machine Learning (ML): These technologies can provide predictive analytics, enhance customer service through chatbots, and streamline various business processes, giving companies a competitive edge. Many applications for AI and ML exist for understanding customer demand and behavior prediction, supply chain optimization, and public security optimization.

Foreign companies navigate cultural differences and establish successful business relationships in the Middle East

Navigating cultural differences is essential for any foreign company looking to establish business relationships in the Middle East. The region has a rich tapestry of traditions, religious practices, and societal norms. Understanding and respecting these differences can be the key to successful partnerships. Some important recommendations:

1) Understanding religious customs, public holidays, dietary restrictions, and social norms. 2) Knowing business partners personally; In the Middle East, business is often built on personal relationships. Face-to-face meetings are preferred, and trust is paramount. 3) Using formal address and salutation, where titles are significant in the Middle East. It is advised to always using a person's full title and surname unless invited to do otherwise. 4) Avoiding topics like religion, politics, and regional conflicts is recommended. Unless you're well-versed in these areas and it's essential to the business discussion, it's best to avoid them. 5) Bargaining is a common practice in many Middle Eastern cultures. Be prepared for lengthy negotiations and understand that the first offer is often not the final one.

"Bargaining is a common practice in many Middle Eastern cultures. Be prepared for lengthy negotiations and understand that the first offer is often not the final one"

Economic and technological advancements in the Middle East create openings for foreign companies to offer innovative products or services

Growing Digital Economy: With a rise in internet penetration rates and the adoption of smartphones, there is an increasing demand for digital services, including e-commerce platforms, fintech solutions, and digital entertainment. Foreign companies specializing in these areas can capitalize on this demand.

The development of smart cities: Many countries in the Middle East are investing in the development of smart cities. This is creating opportunities for foreign companies to offer smart city solutions, such as smart transportation, smart water management, and smart energy solutions.

Sustainable Technologies: There's a growing interest in sustainable and green technologies in the region. Whether it's renewable energy solutions, waste management technologies, or water conservation methods, there's ample room for foreign expertise.

The development of the tourism sector: The tourism sector in the Middle East is recovering from the COVID-19 pandemic. This is creating opportunities for foreign companies to offer innovative tourism products and services, such as sustainable tourism, wellness tourism, and adventure tourism.

R&D Collaborations: The Middle East is investing in research and development hubs, tech parks, and innovation centers. This presents opportunities for foreign companies to collaborate on research, offer consultancy, or set up their R&D centers.

Agricultural Innovation: Given the region's arid climate, there's a demand for innovative agricultural solutions, such as hydroponics, vertical farming, and desert agriculture technologies