Global management consulting firm A.T. Kearney has highlighted the need for change in sustainability as global resources come under increasing pressure. There has never been a greater focus on sustainability as A.T. Kearney analyzes macro trends for the global energy sector and the Middle East in particular, a key topic during A.T. Kearney’s forthcoming Global Business Policy Council.
“Successful economies need to grow, as growing entities are the ones that succeed; if you don’t grow you don’t survive. Governments and companies that fail to spot or accommodate change will not survive.” said Dr. Dirk Buchta, Managing Director of A.T. Kearney Middle East.
The Arabian Gulf countries produce almost two thirds of the world’s oil supply, but reserves are dwindling. Scientists, led by the London based Oil Depletion Analysis Centre say that global production of oil is set to peak in the next four years before entering a steepening decline, which will have massive consequences for the world economy. With most of the GCC economies heavily reliant on oil and gas these economies will become vulnerable.
Therefore, leaving many of these selected GCC countries to re-define more than 50 per cent of their GDP to secure future sources of income and government finances. The potential financial impact of turning the current turnover of net oil exports into imports is massive. Wealth targets, increasing population and the strong dependency on a weakening US dollar are making this an even bigger challenge. In addition other industries such as Construction or Transportation will also suffer from spill-over-effects of oil decline-as much as 15 percent of the GDP may be counter-affected.
“It is key is to have a proprietary strategy with a clear unique positioning that considers both, the country’s strengths and development needs rather than following a me-too approach of copying neighbored countries. Creating a promising new growth path for a country means to understand its specific opportunities and threats” explained Dr. Dirk Buchta, Managing Director of A.T Kearney Middle East. “Satisfying the growing energy demand in the Middle East is on the Government agendas already and renewable energies such as wind, hydrogen and solar power are being evaluated .” explained Buchta.
A.T. Kearney has analyzed macro trends for the global energy sector and there are a number of rationales that will likely lead GCC governments to build solar energy industries. Currently, there are more than 100 power generation projects of all types in the GCC, collectively worth more than $150 billion. A.T. Kearney predicts that solar energy will quickly gather a foothold in the GCC due to demand and innovation. They have identified key drivers that will promote a solar energy industry, namely a booming market for alternative energy, an increasing demand for electricity, constant improvements in technology and the abundance of strong sunlight in the GCC. However, the growth of a GCC wide solar industry will have to be supported by national and regional strategies. A.T. Kearney estimates the potential economic value at approximately US$ 11 billion per year for the GCC states and also highlights that projected development of the solar energy industry in the Gulf will have significant implications on countries’ energy policies.
The situation presents an opportunity for Governments and businesses to actively participate in the development and together drive the new energy economy.
About A.T. Kearney
A.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a unique combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO’s agenda. Today, we serve the largest global clients in all major industries. A.T. Kearney’s offices are located in major business centers in 33 countries. During our 80 year history, we have provided management consulting services to most major corporations and governments around the world. From our fast growing Middle East office in Dubai, A.T. Kearney actively contributes to the growth and the build-up of an industry and service economy in the region. For more information, visit www.atkearney.com
