How technology advances will make the Gulf’s local manufacturing ambitions a reality

The region already has a nascent manufacturing base which spans heavy, and light industries turning out a variety of exports from composite airplane parts, boats, plastics, detergents, fertilisers, aluminum, industrial cables, and food products.

Yet now manufacturing and industrialisation is being prioritised by all GCC governments because of their potential to grow non-oil GDP and steer the region out of its long-held petrochemical dependency while providing much-needed employment opportunities for the region’s growing youth populations.

Region-wide manufacturing and industrialisation strategies are making their presence felt and specialised free zones with financial, leasing, and protocol incentives have sprung up to service these ambitions.

The UAE government’s recently launched ‘Operation 300bn’ aims to more than double the industrial sector’s GDP contribution by 2031 with plans to harness world class manufacturing facilities and turn the country into a regional hub for advance technologies. The 10-year strategy, which is expected to drive the mainstay of the economy, will focus on future industries; support the country’s 13,500 small and medium enterprises; and attract talent, investors, developers, and experts from all over the world.

In Saudi Arabia – the region’s largest economy – the industrial and manufacturing sectors have been earmarked to play a major role in achieving the nation’s Vision 2030. Manufacturing currently accounts for 10 percent of the nation’s GDP with the sector averaging 7.5 percent annual growth. Today the kingdom’s government is further incentivising the sector with huge financial and administrative backing including the construction of new industrial cities.

And in Qatar, the government backed Manateq industrial zones are helping to promote local manufacturing and is expected to ramp up the sector’s local production value by almost a third by 2025 employing over 100,000 people. The government is looking to boost SME sector manufacturing and shift its export focus to non-hydrocarbon products.

Bahrain, Oman, and Kuwait are also on the industrialisation and manufacturing trail. In Bahrain, manufacturing accounts for 18.6 percent of GDP – the highest in the GCC – with the sector having grown by 80 percent of the past five years and the kingdom has set its sights even higher with pro-innovation business policies, a dedicated Economic Development Board and 100 percent foreign ownership granted to manufacturers.

Bahrain’s manufacturing accounts for 18.6 percent of GDP – the highest in the GCC

Oman is developing policies to boost its manufacturing sector as part of its Vision 2040, the sultanate’s long-term plan to develop a sustainable, diversified economy. The first phase of its Manufacturing Strategy 2040, which researched how modern technologies could grow the non-oil sector is complete with phase two now focusing on creating policies to integrate the identified technologies. Kuwait, meanwhile, is busy building new free trade zones and implementing initiatives to promote manufacturing under its Kuwait Development Plan.

This acceleration of the region’s industrial and manufacturing base will mean strong intra-Gulf competition, yet the realisation of the ambitions has several key advantages on their side. First is the fact that the region can leverage green-field strategies and by and large does not have to contend with the huge costs involved in updating and transforming legacy plants and infrastructure. Second is the GCC’s long acknowledged penchant for the early adoption of technology – now a vital success component in the Industry 4.0 era.

Every previous industrial revolution has had its winners and losers, and I believe our current epoch shift will prove to be no different. But let me make one thing absolutely clear – success or failure will not be determined by some arbitrary natural selection but by our decisions – principally concerning our technology mix. Automation and the adoption of smart technology will be the hallmarks of tomorrow’s manufacturing powerhouses and the Gulf can steal a march on its global competitors.

Powering the region

The power of digital transformation to deliver resilience has been underlined during the Covid-19 lockdowns when global dependence on technology reached almost super-sonic speeds. It’s a lesson which won’t be lost on tomorrow’s winners.

With an ambition to accelerate the Middle East region’s digital transformation, the company’s “Project Mustakbal” has rapidly established a sound IT ecosystem and a shared goal with many customers and partners across the region.

Our goal is to further accelerate this shift “from oil to data” by supporting the future visions of the GCC governments as they embark on digitalisation by providing scale, innovation and expertise from the edge to the cloud, therefore, helping governments and the ecosystem prepare and meet the goals set forth by these inspirational visions.

Meeting the global needs

In looking for leadership partners for its manufacturing, innovation and industrialisation drives, the region could turn to experts in realising their ambitions.

The company plans to engage the technology ecosystem and industry partners to deliver on its new integrated device manufacturing (IDM 2.0) vision and is planning important research collaboration on creating next generation logic and packaging technologies which will help unleash the potential of data and advanced computation to create immense economic value.

As we look ahead to the not-too-distant future when ‘Made in the Arabian Gulf’ labels will span an ever-wider range of consumables, we will find technology at the core of the visionary success and it would give us huge satisfaction to find that much had been ‘Powered by Intel.’

Taha M. Khalifa, Client Computing Group Sales Director, EMEA Territory at Intel Corporation