By Atul Hegde, Founder of YAAP
Among policy experts across the globe exists a consensus that the Middle East is hard to predict — changes occur rapidly, reforms take shape overnight, and structures spring up in the blink of an eye in the region. The successful hosting of a World Expo and FIFA World Cup in the face of unprecedented disruptions stands as a testament in this regard. In recent months, the region truly announced itself on the global stage, setting strong foundations for a promising future.
Concurrently, buoyed by post-COVID economic activities, pent-up demand, and retail and travel spending, tech-driven businesses shifted gears and pivoted to a different growth trajectory. At this juncture, if all stakeholders agree on one thing, it is that now is not the time to rest on past laurels. Success is a continuous thing, with one achievement acting as a stepping stone to another. So, today, the focus should shift to mitigating existing challenges and maximizing emerging opportunities.
Navigating the lingering headwinds
The remnants of the pandemic continue to pose operational challenges to businesses. The makeshift policies such as work-from-home and hybrid working have driven a wedge between teams as far as in-person collaborations are concerned. For businesses, the return to offices has also entailed more infrastructure and transportation costs, further aggravating the high-cost-low-margin operating environment. Businesses must reassess policies and optimize costs to strengthen balance sheets and ensure the sustenance of existing employment in light of recessionary pressures.
Recession cues are becoming more apparent as stock markets continue to take a beating and marquee companies lay off employees in droves. While no market is immune to the coldness of the tech winter, some could find refuge in strong, location-specific fundamentals. Middle Eastern economies, due to greater exposure to structural trends such as technology and low sensitivity to volatile asset classes, can stay resilient, provided proactive measures are taken by the public and private sectors.
Stepping up sustainability
Tech-driven businesses, in particular, have an opportune moment to future-proof themselves by embracing financial and environmental sustainability. Those with disproportionate costs to achievable returns should revamp their business models to become financially sustainable. The new benchmark should also factor in ESG compliance. In six months, such efforts could see businesses churn out new value propositions. Additionally, prudent spending can ensure that the financial repercussions in the event of setbacks are manageable. The revamped business models also mean that any success achieved can be sustained and built on.
AI rules the roost
We are at the cusp of monumental change due to high AI assimilation in businesses. That is especially true for advertising, communications, and content creation domains, where machine-generated images, texts, and audio are breaking new ground. For both consumers and producers, their emergence calls for higher digital dexterity and lots of unlearning of conventional modalities. An emphasis on AI-led “applied observability” — the collating, correlating, and analyzing of observability data across organizational disciplines — could help businesses become more insight-rich and agile in decision-making.
Web 3.0 has come of age
Thus far, Web 3.0 — the confluence of the metaverse, NFTs, and other blockchain applications — has mostly found superficial adoption, meaning businesses just jumped on the bandwagon, hoping to explore use cases and gain a competitive edge. In the coming months, utility-based Web 3.0 applications will emerge as businesses leverage avenues such as the metaverse to scale exponentially. The people-centric outcomes of Web 3.0 will manifest more in healthcare, finance, and public governance, among sectors with strong macroeconomic potential. The inevitability of these developments means that businesses must adapt strategically.
In fact, in future-ready economies like the UAE, technological integration on Web 3.0 platforms is well underway. The interoperability of such platforms is enabling innovators to find synergies that translate to new products/services. The integration of solutions is vital because it creates a ‘digital immune system,’ which protects against business risks. The resulting holistic resilience will be greater than the sum of its parts (blockchain-based platforms, automation software, AI analytics, etc.). The UAE government’s Web 3.0 initiatives — the Dubai Metaverse Strategy, the Dubai Virtual Assets Regulatory Authority (VARA), DEWAverse, etc. — are consequential for the same reason. For tech-driven businesses, such a favorable operating environment opens more opportunities for value creation.
All in all, the aforementioned factors should incentivize businesses to scale, strike synergies, and become more sustainable. It is advisable, however, to stay anchored in fundamentals, constantly have a finger on the pulse of customer movements, and ensure that accelerated digitalization does not create a digital divide. To that end, promoting upskilling, scaling systematically, and establishing feedback mechanisms should be mission-critical.