Since the Great Recession of 2008, countries across the world have struggled to achieve robust economic growth with much of the developed world now struggling with a low growth, low inflation environment. The UAE has fared better than most countries, averaging in excess of 4% economic growth since 2010 despite facing a number of economic headwinds associated with lower global oil prices, a depressed property market, and issues dealing with Dubai World’s debt restructuring.
What factors enabled the UAE economy to outperform economically much of the rest of the world over this period? A recently released Report by KPMG titled “2017 Change Readiness Index – Assessing Countries Ability to Manage Change and Cultivate Opportunity” helps to provide some insight into this question. The international study examined 136 countries (accounting for 97% of the world’s population and 98% of the world’s GDP) and measured each country’s ability to prepare and react to sudden shocks or long-term trends such as financial and economic crisis, natural disasters and social instability. This measurement referred to in the study as Change Readiness is defined as:
“The capability of a country – its government, private and public enterprises, people and the wider civil society – to anticipate, prepare for, manage and respond to a range of change drivers, proactively cultivating the resulting opportunities and mitigating potential negative impacts.”
The study also broke down a country’s Change Readiness into three key pillars:
- Enterprise Capability: the ability of private and state-owned organisations to manage change and grow within a dynamic economic environment
- Government Capability: the ability of governmental and public regulatory institutions to manage and influence change
- People & Civil Society Capability: the ability of individual citizens and the wider society to cope with change and respond to opportunities
The study found the UAE had the 3rd highest Change Readiness Index (CRI) in the world. A breakdown of the UAE’s Change Readiness across the three Key Pillars found the UAE ranked 1st in terms of Enterprise Capability, 2nd in terms of Government Capability and 17th in terms of People and Civil Society Capability.
Top 10 Change Readiness Index Scores
|2017 CRI Ranking
|Country||Enterprise Capability||Government Capability||People and Civil Society Capability|
|3||United Arab Emirates||1||2||17|
The UAE’s performance in this global report was particularly impressive given one of the main study findings that countries dependent on natural resources and export incomes tend to struggle with Change Readiness. Seven of the top fifteen underperforming countries in the study were found to be oil-rich countries with only the UAE and Norway being capable of achieving high Country Readiness scores.
Given the UAE’s dominant performance in both the Enterprise and Government Pillars (ranked 1st and 2nd in the world respectively), the study found areas of opportunity for the UAE to develop its People and Civil Society Pillar particularly in the areas of technology use (the ability to adapt new technologies, including social media) and health (better health incentivizes governments to invest in education, encourages individuals to save and produces a more productive workforce). Fortunately, the UAE National Agenda developed in 2014 designed to help achieve the 2021 UAE Vision places a high level of importance on both the Education and Healthcare sectors. This could enable the UAE to improve its performance in the People and Civil Society Pillar and possibly ascend to a number one global ranking in future Change Readiness studies.
KPMG’s complete report can be downloaded for free at: https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2017/07/change-readiness-index-report-2017.pdf