A while ago I participated in the UAE manufacturing summit here in Dubai. One of the shared conclusions was that although the UAE is the largest cement producer in the world after China, manufacturing remains relatively undeveloped.
One question that came up several times was ‘what does made in the UAE stand for’? When we think of Switzerland, we think of precision, Germany stands for quality and Japan for reliability. But what does the UAE stand for? Well, the fact that there is no real answer is actually a fantastic opportunity. We are at a breaking point of technology and with industry 4.0 at the doorstep the UAE has the possibility to leapfrog and take a strategic decision on where it wants to head in terms of manufacturing. What it actually wants ‘Made in UAE’ to stand for.
Europe has a huge legacy to care about, changing the industry is hard and painful, not least for the workers and the unions, but here in the UAE there is little or none of this legacy. Instead of focusing on traditional industries there is a chance to look at innovative and sustainable solutions in manufacturing.
Dubai and the UAE is a hub for trade and strategically located between Asia, Europe, Africa and the rest of the Middle East. It has an international workforce and a strong innovation culture, driven by its visionary leaders. A study made by the WEF shows that currently 25 nations stand for 75% of the manufacturing added value in the world. This map is likely to change in the future. The UAE was one of the markets identified with a huge potential for being part of that change.
There are two major challenges that the UAE face in this ambition as I see it. The first one is the mentality in the region. Until now, it has been very trade focused and short termed. Manufacturing is different. You cannot come and test, make quick profit (or losses) and then move on. Manufacturing requires longterm investments, both in terms of infrastructure and in human resource. This is a shift in mindset that needs to take place.
The second challenge is the access to relatively cheap labour in the UAE. The country is completely founded on the parallel economy supported by workers, providing for their families overseas with long or short term contracts on a relatively low income. Although this is an asset in many cases for UAE companies , especially for the service industry, and for the economy as a whole, it does not create the need to establish efficient and automated processes the way it would in other countries. With new type of industries establishing however, UAE could immediately jump to the automated factories. With the current vision of manufacturing contributing 25% to overall GDP by 2025, there is room for new players on the market.
If we look at manufacturing from a customer experience perspective I believe customers will demand more and more transparency of the actual process in the future. Today’s customers are becoming more and more informed and as we enter deeper into the transformation economy people want more than just products, services and experiences. They want companies to help them feel better about themselves and they want to join in a bigger purpose. For companies to offer a transparent, sustainable manufacturing process, can in itself be a fantastic marketing tool (and it’s a win-win for everybody). I believe the UAE could benefit from this perspective.
Also in terms of customer experience, artificial intelligence will allow for mass customization, with the supply chain created around the customer and much more accurate forecasting. Customers can demand a bespoke product, at the price and process of mass production. This fits very well with the high service demand and spirit for innovation in the UAE.
With this in mind, I believe that UAE has a unique opportunity to leapfrog and take the lead in sustainable, customer centric manufacturing and establish what it wants ‘made in the UAE’ to stand for in the future.