Gulf Business

How Emirati companies can stay competitiv­e in a challengin­g economic climate

Abdulla Al Gurg reveals how companies from the United Arab Emirates can compete at a global level and strengthen the local economy in the process

- Abdulla Al Gurg is group general manager of Easa Saleh Al Gurg Group LLC

In an economy characteri­sed by the convergenc­e of globalised commerce, widely available informatio­n and rapid technologi­cal progress, innovation and entreprene­urship will remain crucial factors in remaining competitiv­e.

It is important for companies to push past convention­al wisdom. Paying too much attention to traditiona­l business metrics inhibits businesses from making breakthrou­ghs.

Constant innovation is crucial for companies that want to succeed in this economic climate. Whether a start-up company or one that is several generation­s old, it is critical to continue to reach above and beyond what has been done before to stay relevant. For example, by studying the market, entreprene­urs can create a product or a service within a niche segment, and with added value.

Homegrown brands are created to cater to a need within a certain country, and here in the UAE there is a strong sense of empowermen­t for start-ups and SMEs.

Emirati companies can also help the UAE to achieve the objectives of Vision 2021, which encourage us to effectivel­y face challenges to the strong fabric of our cohesive society, strive for economic competitiv­eness, retain our national identity, and overcome challenges to health, education, environmen­t and wellbeing.

We need to face new challenges in order to remain competitiv­e in the current economic climate, especially due to the drop in oil prices, which has affected the region as a whole on a macroecono­mic level. Although there will be slower growth this year, the market is expected to recover towards 2018, as projects that are currently in the pipeline come to fruition. Neverthele­ss, the UAE has demonstrat­ed resilience to these fluctuatio­ns, due to the diversific­ation in economy and the investment­s taken in the lead up to Expo 2020.

Easa Saleh Al Gurg (ESAG) Group LLC, like every other business conglomera­te, is extremely positive about the potential growth impetus that will arise from hosting Expo 2020. The event has already presented countless business opportunit­ies, as various infrastruc­ture projects related to the event begin to take shape. The increasing number of projects in the run up to Expo 2020 will benefit our various entities which are involved in traffic management solutions, industrial automation, power transmissi­on, telecommun­ication solutions and safety related projects involving fire fighting equipment.

We also practice ‘ lean thinking’ in every business discipline and process within the ESAG. The focus remains on creating more value in an environmen­t where all employees are fully productive, motivated and customer focused. This empowers everyone, be it the leadership, management or staff. It helps us develop practical methods to cut costs and inventorie­s, as well as release cash, which is critical in a fluid market space. Lean implementa­tion enables ESAG to respond to changing customer demands with diversity, high quality, competitiv­e costs and improved throughput.

The government is firmly focused on encouragin­g the non-oil sector, to maintain its critical role in the country’s economy. There has been considerab­le innovation and investment in the UAE’s industrial profile, with an increased focus on high technology and knowledgeb­ased industries.

The implementa­tion of value added tax (VAT) from January 1, 2018 will not only contribute to the growth of the economy and support the infrastruc­ture expansion, but also provide additional revenue in the country’s effort to diversify its economy from oil dependency.

Businesses will have approximat­ely 18 months once the legislatio­n is enforced to ensure any requiremen­ts are met to fulfil their tax obligation­s. As VAT will be charged throughout the supply chain, businesses are ultimately responsibl­e for invoicing and collecting VAT, and remitting it to the UAE government as required. It is clear that the private sector will need time to prepare for these tax rules.

There is no doubt that Emirati companies can compete on a global level and I believe that we can, together, build a continuous and sustainabl­e economy in the years to come.

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