King Abdullah Economic City (KAEC) in Jeddah, Saudi Arabia, was the centre of attraction as TRENDS, along with INSEAD Business School, held the Top CEO Conference & Awards 2018 on April 10 and 11.
Into its fourth edition, the two-day mega event witnessed scores of top chief executives of publicly listed companies from various sectors and who’s who of the Gulf Cooperation Council converging in the Kingdom. This year’s edition was historic as it was for the first time Arab Women Forum was held amid sweeping and drastic societal reforms taking place in Saudi Arabia. The event couldn’t have come at a more opportune time to highlight the burning issues faced by the women as they get more rights in the Kingdom with the ban on their driving being lifted and guardian system relaxed.
If April 10 was about women and liberating them to play a crucial role in making society equitable and giving the much-needed uptick to the regional economy, the last day was all about setting the tone right for what needed to be done to bring back the regional economy on track of fast growth. By way of conferences, debates and discussions, pertinent and thorny issues that plague the private sector and hold its growth were dwelled upon and brainstormed threadbare. The gala event ended on a high note with a ceremony celebrating and rewarding the excellence shown by top 100 business executives in the region in the face of adversities.
Tough Time
While speaking to TRENDS, most of the executives were of the opinion that these are not the easy times for any business in any industry to operate and maintain high profitability. Past few years have been quite tough for the private sector in the region with volatile oil market eroding governments’ coffers, increasing budgetary deficit and ultimately having a cascading effect on the availability of liquidity for expansion and sustainability.
Besides, fast-evolving regulations, challenges posed before startups, changing consumer behavior and the focus on adoption of latest technology amid the persistent sluggish growth and falling profits have forced businesses to reinvent and take drastic measures to thrive successfully in today’s complex corporate environment.
Freedom from officialdom
The common and foremost sentiment emerging from brainstorming sessions of the business leaders at the event was: ‘If the private sector has to become the real engine of growth and act as a job creator, the authorities must free it from red-tape and stiff regulations and create new international markets by way of bilateral or multilateral deals’.
“The private sector has an important role to play in the development of the GCC economy by becoming the primary source of jobs. This means the private sector must operate in close partnership with the government and at the same time independently of its patronage. The private sector must be able to compete on its own terms, not through favored agreements with government,” said Dr Fahd Al Rasheed, CEO, KAEC.
The CEOs believed pro-industry polices were the need of the hour, foremost being antitrust and anti-dumping laws, which can offer a level-playing field to private players, besides doing away with strict rules that restrict the movement of goods, people and capital, thus promoting exclusion.
As per MEED Projects’ GCC Construction Outlook 2018, construction and transport projects worth nearly $715 billion are either under construction, design or tendering stage at the beginning of April 2018. Even though the private sector is excited about Dubai Expo 2020, vision statements such as Saudi Vision 2030 and Abu Dhabi Economic Vision 2030 and their promise of big-ticket infrastructure projects, sustainable flow of capital remains a major concern to enter into public-private partnerships (PPP) with the governments.
Given the governments’ dwindling revenue and rising budgetary deficit, the business leaders said they needed more clarity and assurance from the authorities on funding, expected returns, feasibility of projects and their time-bound execution.
“Mega-projects need careful monitoring and craftsmanship. The focus should be on productivity and timely delivery. Bureaucracy, however, is the stark contrast of this viewpoint. We need a professional approach from the government for making PPP projects succeed,” asserts Khaled Almaeena, Managing Partner, Quartz Communications.
No escaping from transformation
While the business leaders spelt out what the authorities should do in order to create a congenial environment to let them prosper, they also stressed how important in the era of “Fourth Industrial Revolution” it was to transform their business models and align them with the fast-changing ecosystem, especially technological advancements, to remain relevant and sustainable. Emerging startups have raised several challenging questions for traditional businesses, for some, on their very existence, forcing them to transform faster than before.
Blockchain, artificial intelligence, automation of services, besides the “new reality” of sluggish economy and a prolonged era of slow growth and low profitability, mean there can’t be any escaping from the transformation.
“The pace of the current transition is incredible in the region. In the next five years, one-third of the Fortune 500 won’t exist or will completely transform. Disruptive technologies have significantly empowered the customers and the businesses have no choice but to transform continuously to a rate that the customer wants. Yes, traditional jobs are getting redundant but new jobs are also emerging. This transformation is at the top of every board agenda and will give rise to setting the new norm on how to run efficient and successful companies. Those that succeed will survive,” says Raj Mehta, Partner, KPMG.