According to Middle East focused analysis of PwC’s 15th Annual Global CEO survey, Middle East CEOs remain optimistic about delivering growth over the next 12 months despite the lingering after-effects of the Arab Spring and a potentially worsening Eurozone debt crisis.
Business confidence remains stable in the region, with 60% of CEOs from the Middle East showing confidence of their revenue growth prospects in 2012 compared to 40% globally. This is also higher compared with 56% a year ago. Despite the instability of global economies, executives surveyed have comfort with the local economies where two-thirds of global business leaders are expecting their operations in the Middle East to grow over the next 12 months.
Compiled through interviews with 1,258 CEOs in 60 countries including 30 from the Middle East, the Middle East supplement titled “ Looking Ahead : Delivering growth and value’’ highlighted that CEOs from the region are citing two main factors as key to driving growth: emerging markets and mobilising talent.
Like their peers worldwide Middle Eastern companies have a big focus on entering new markets. 83% of Middle East based CEOs believe that emerging economies are of key importance to their company’s future with interest focused on nearby areas such as Turkey, India and Africa – a sign that the region hopes to turn its geographic location at the nexus of three continents into a competitive advantage.
“Leaders of both public and private sectors realise there is more to accomplish. Competing globally in more diverse sectors in more diverse markets will require more leadership and more innovation. Above all else, it will mean developing the right talent to strengthen their organisations’ capabilities” said Warwick Hunt, Middle East Managing Partner for PwC.
In addition to emerging markets, talent was cited as being of vital importance to business leaders with 63% of CEOs based in the Middle East seeing talent constraints as a potential risk to their growth. The demand for talent is particularly strong in the Middle East, where 43% of companies versus 28% globally, expect to grow their headcount by more than 5% in 2012,. Experts have cited that the Middle East’s workforce is forecast to continue growing in the coming decades as other regions peak or begin to decline, which will provide an ample supply of workers.
Commenting on the analysis Fouad Alaeddin , Middle East Managing Partner – Head of Markets said “ The Middle East remains a key battleground in the global war for talent . However, Middle Eastern companies have particular approaches, and unique local context to competing in that battle.”
Adding ‘’Well-run businesses see opportunity. They’ve embraced local workers and invested in training programmes. These efforts could pay-off by giving them access to the Middle East’s youth bulge, which is now beginning to enter the workforce’’.
Looking at market and workforce expansion governments have recently stressed investment in domestic programmes ranging from education to social safety nets to infrastructure. Businesses are responding, too. In the Middle East, 63% plan to increase investments in the next three years to help maintain the welfare of the workforce.
Compliance with a growing body of regulations, particularly when operating in disparate markets, is a complex task for most businesses, which is why CEOs consistently report over-regulation as a threat to their growth. However, the successes of the private and public sectors are increasingly intertwined.
‘’CEOs recognise that sustainable business growth requires working closely with local populations, governments and business partners, and investing in local communities. This can mean creating job training programs, helping to manage resource constraints.’’ said Warwick Hunt, Middle East Managing Partner for PwC.