The UAE’s journey to economic diversification is clear and exciting.
Oil has been a primary contributor to the UAE’s economy since discovery in 1958. In the early 1970s, the oil sector encompassed nearly 70 per cent of Abu Dhabi’s economy. Today, we can’t ignore that oil is in bear territory, but in less than 50 years the Abu Dhabi economy has evolved, not just downstream or into related sectors but into a wide range of new industries.
The UAE’s founding father, Sheikh Zayed, recognised the opportunity that oil created for the UAE but also quickly saw the need to diversify the economy away from a reliance on hydrocarbons. The Abu Dhabi Government developed a long-term economic vision for Abu Dhabi to develop a more sustainable and diversified economy.
Looking across the emirate, you see signs of dramatic change and development. A major new port now serves one of the region’s largest industrial zones. A new nuclear reactor will soon provide energy to support our economic growth. And we are seeing fantastic opportunities for further growth and investment in technology with the rise of semiconductors, speciality health care, cognitive computing and satellite technology.
All of these investments will drive economic expansion and further social development.
Today, non-oil sectors make up 45.1 per cent of the UAE’s GDP and Mubadala is proud to play a major role in this economic diversification. With more than US$66 billion in assets, we have helped to develop several key industrial sectors, including an aerospace hub for Abu Dhabi.
This diversification goes beyond simple financial returns; we have created more than 15,000 jobs and are focused on the socioeconomic effect across the Emirate of Abu Dhabi. For that diversification to succeed, we must embrace innovation.
In many sectors, we are competing with global champions that were created decades ago. It is not enough for us to imitate what they have done – we need to create our own way.
As an example, The Nibras Al Ain Aerospace Park is a catalyst for the creation of a world-class aerospace hub. Nibras will be the industrial platform for manufacturing and maintenance facilities, already home to internationally recognised companies including Strata Manufacturing, Advanced Military Maintenance Repair and Overhaul Centre (Ammroc), Horizon International Flight Academy and Etihad Flight College.
Nibras is expected to create more than 10,000 jobs by 2030. In just five years, for example, Strata has grown a nearly 700-person workforce. Half of its employees are Emirati and 84 per cent of them are women.
The Nibra complex allows us to focus investment and effort in one geographical location to maximise the synergies across the aerospace value chain. The development of a hub for Abu Dhabi supports other local business as well as delivers on the regional requirements of our global partners.
This strategy is focused on creating a framework where innovation and an entrepreneurial spirit can grow. Education is at the heart of any innovation-based economy. It is important that as a country we create wide-ranging training and career opportunities for the next generation of Emirati leaders.
Mubadala is supporting the development of world-class educational offerings in the UAE through partnerships with local universities and global partners. Most recently the “Live Science” event at Mushrif Central Park, running until yesterday, features Boeing’s Above and Beyond initiative and Abu Dhabi Technology Development Committee’s “lema?” workshops. It is critical that industry players provide youth with more opportunities such as these to discover and learn about aerospace, science and technology innovations.
Innovative technology and businesses are at the heart of our development strategy. In November, we announced Cognit, a joint-venture company with IBM Watson, to bring cognitive computing technology to the Middle East & North Africa. IBM’s Watson represents a new era in computing and this move strengthens our competitive position in the high-growth ICT sector, locally and internationally. It is a strategy that falls in line with the UAE’s vision for “smarter cities” and allows technology to lead the way for future development, where the Internet of Things will become a reality all around us.
We have also seen innovation become a driver of growth for Etihad Airways, where exciting new investments in technology are being made to enhancing the guest experience in this digital world. Technology and innovation are enabling the airline to secure its safety and infrastructure, improve its service and share best practices across the Etihad Aviation Group and equity partners.
Across the aviation and aerospace industry it is clear that innovative strategies are shaping the way businesses operate and this contributes significantly to diversification efforts.
Innovation is the central theme of the Global Aerospace Summit 2016. The forum brings together 1,000 C-suite executives from all branches of the industry – including aviation, aerospace, defence and space – to share experience and learning, with the goal of creating outcomes that can benefit all participants. The inaugural Abu Dhabi Aviation and Aerospace Week will allow us, collectively and creatively, to come up with solutions and partnerships that will pave the way.
Connectivity will also be a big focus of the Global Aerospace Summit and it will be an essential part of the discussions taking place. Yahsat – our UAE-based satellite provider – is using innovation to drive digital connectivity in emerging markets, striving to provide broadband access for all. Yahsat launched its first two satellites in 2011 and 2012, delivering affordable satellite broadband services to 28 countries in the Middle East, Africa and South-west Asia, and has a third set to be launched in 2016.
Our country has set ambitious goals for its long term economic development. We can only diversify if we adopt new approaches, if we bring innovation into the heart of what we do. Our experiences in aerospace show just how high we can reach when we do innovate.
Homaid Al Shemmari is the chief executive of aerospace and engineering services at Mubadala.
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