According to the World Bank, manufacturing added 14% to GDP across the Middle East in 2018, up from 12.6% in 2016. Today, in line with various 2030 economic visions of the Middle Eastern countries, governments across the region have identified manufacturing as an integral part of economic diversification and digitalisation strategies.
The Fourth Industrial Revolution (4IR) is leading the manufacturing sector across the world to undergo a massive transition. The potential for growth and transformation is huge in the Middle East region owing to its strategic geographic location, visionary policies, and a dynamic private sector.
The Opportunity for the Manufacturing Industry in the
The Middle East region has several fundamental advantages for manufacturers. It is a natural trade hub - a maritime crossroads between Europe, Asia, and Africa. The GCC alone is a $1.5trn market, and Indian markets are readily accessible. All Gulf states have excellent port and airport facilities, and good road transport.
The manufacturing sector holds a crucial place in the region’s diversification and economic growth plans. Saudi Arabia’s Vision 2030, Bahrain’s Economic Vision 2030, and in the UAE both Abu Dhabi’s Economic Vision 2030 and Dubai’s Industrial Strategy 2030, all feature growth in manufacturing as a key pillar of diversification. The UAE’s economic diversification plans, UAE Vision 2021 and Abu Dhabi’s Economic Vision 2030, recognise the industrial sector as a strategic driver of the sustainability of the country’s economy. According to data from Oxford Economics, the UAE’s industrial sector, including extraction, manufacturing, utilities, and construction, grew by more than a third in 2007-17, and is forecast to grow by another third over the next decade. The Emirates of Abu Dhabi, Dubai, and Sharjah contribute 98.11% to the GDP of the country.
The UAE is listed as a ‘Stand Out’ country in Tufts University’s 2017 Digital Planet report, recognising it as digitally advanced and exhibiting high momentum. The manufacturing sector has started witnessing the adoption of breakthrough innovations.
Similarly, artificial intelligence (AI), a game changer in the global economy, will have a substantial impact on the Middle East’s manufacturing sector. A PwC report estimates that AI could contribute $320bn to the Middle East’s GDP by 2030, with the most significant gains in absolute terms expected in the construction and manufacturing sector.