Foreword
Over the past decade, unprecedented levels of economic progress, foreign and domestic investment, demographic growth and high-profile cultural and public-sector projects across the Gulf region have catapulted Gulf Cooperation Council (GCC) countries on to the global stage and onto the agenda of every global board table.
Teneo is very proud of our long-standing presence throughout this diverse and evolving region. Our team of more than 120 professionals across the GCC supports leaders and their organisations as they navigate important transitions, implement strategies for ongoing transformation and set their sights on ambitious future plans. This includes clients in both the public and private sector. We are the only advisory firm in the region that addresses strategic communications, financial advisory, management consulting, risk advisory and people advisory on an integrated basis.
Teneo’s in-house data, insights and analytics team recently surveyed more than 450 senior leaders from across the GCC. These decision makers represent the public and private sectors across a range of industries, offering their perspectives on significant local and global issues, including the economy, technology and AI, cybersecurity and geopolitics.
These results reveal where leaders are setting priorities, investing resources and readying for change as we continue to navigate the second half of 2024.
It is our hope that this report will provide helpful insights and direction for those operating across this increasingly dynamic region.
Ursula Burns, Chairwoman, Teneo and Paul Keary, CEO, Teneo
Having spent 15 years in the Gulf, I have witnessed firsthand the remarkable evolution of the region’s business landscape. The GCC countries have seen sustained economic progress backed by clear leadership vision. These advancements have solidified the GCC’s position on the global stage, showcasing the region’s dynamism and enduring potential.
The survey results provide a clear view of where leaders are focusing their priorities, allocating resources and preparing for change as we navigate the significant latter half of 2024. Notably, 65% of decision makers anticipate further improvements in the GCC economy during this period. This positive sentiment aligns with the region’s enduring ambitious, future-thinking outlook — a characteristic that has been at the core of its unique development trajectory.
Teneo has been supporting decision makers in the region for over a decade. Throughout this time, we have helped them navigate an increasingly complex stakeholder environment, implement impactful strategies and effectively communicate their goals and ambitions for the future.
We trust that this report provides valuable insights for those working in this dynamic region. By understanding these perspectives, we can more effectively support our clients in navigating today’s complexities and capitalizing on tomorrow’s opportunities.
Nicholas McDonagh, Senior Managing Director and Head of Teneo Middle East
Executive Summary
01. Macroeconomic Outlook
65% of decision makers in the Gulf Cooperation Council (GCC) anticipate further improvements in the GCC economy through the end of 2024.
Respondents from Saudi Arabia and the UAE express significant confidence in the region, with robust positive sentiment at 82% and 74% respectively. Oman (53%) and Kuwait (54%) maintain a more guarded stance on the future of the GCC economy.
02. Geopolitics
While geopolitical instability may not claim the top spot in the roster of challenges faced by GCC
decision makers (ranked 7th), a notable 26% express reservations about their organizations’ readiness to navigate the challenges posed by geopolitical instability. This indicates a misalignment between risk perception and risk management strategies.
03. National Transformation
GCC decision makers are positive about the influence of National Vision documents (national transformation plans). Notably, upwards of 90% of respondents in Saudi Arabia and the UAE identify strong positive influence of their respective country’s Vision.
Across a 25-year time horizon, digital transformation, tourism and hospitality, and economic dynamism stand out as enduring areas of opportunity. These are longstanding regional priorities, indicating sustainability of public and private sector ambition and alignment on growth areas across industries.
04. Business Environment
When asked about the role of the GCC in the global economy over the next 25 years, the majority of respondents expect the region to be a global business and finance center and a leading energy supplier.
52% of decision makers identify investment opportunities as the single most transformative force in positively shaping the trajectory of their organizations.
05. Talent Acquisition
Only one-third of decision makers are confident in their ability to attract skilled talent domestically.
Out of 22 challenges facing their companies, decision makers across all GCC countries rank “attracting skilled talent domestically” within the top 10, with the UAE, Qatar and Oman placing this issue amongst the top three.
06. Technology and AI
64% of decision makers note the importance of embracing innovation, demonstrating a high level of optimism and a proactive approach toward adopting cutting-edge technologies.
82% of decision makers note that AI and tech regulation will positively impact their operations within the GCC.
41% of respondents saw the cost of AI as the biggest barrier to adoption within their company or government entity.
07. Cybersecurity
Out of a list of over 20 challenges impacting growth objectives, cybersecurity was identified as the top challenge, ranked first by a quarter of respondents (compared to issues such as AI, regulation or access to debt).
Decision makers similarly identify cybersecurity as the issue they are least prepared to address through internal company resources, with the vast majority of respondents engaging in third-party support before, during and after risk occurrences.
08. ESG
The survey highlights a notable divergence in the prioritization of ESG principles across GCC countries, with the UAE and Saudi Arabia leading with 49% and 46% prioritization respectively, indicating uneven commitment to environmental, social, and governance principles across the bloc.
38% of decision makers in the GCC express their intention to invest in diversity and inclusion initiatives over the next five to 10 years.
01. Macroeconomic Outlook
"The GCC’s resilience amidst global disruption highlights its unique position in the international business landscape. The region must continue to move beyond being seen merely as a financier and unapologetically establish itself as a credible partner in tackling global challenges."
Andrew N. Liveris, Teneo Senior Advisor
Director of Saudi Aramco
Special Advisor to the Public Investment Fund (PIF) and the Crown Prince of Saudi Arabia
Amidst persistent macroeconomic headwinds that have challenged the global economy in recent years, the GCC has emerged as a pillar of economic stability. Throughout the past year, the region has maintained steady economic growth and is forecasted to sustain this positive trajectory.
In contrast to Teneo’s 2024 CEO and Investor Outlook Survey, where 53% of global CEOs have a negative outlook on the 2024 global macroeconomic conditions, regional findings indicate a much more positive outlook with 65% of decision makers in the GCC anticipating further regional economic improvements. This more positive outlook can arguably be attributed to a resilient set of regional economic drivers, such as continuously high oil and gas prices combined with further economic diversification efforts central to the GCC’s broader and country-specific strategies.
While the region is largely optimistic about regional economic growth, a clear disparity emerges amongst individual GCC countries. Saudi Arabia and the United Arab Emirates (UAE) express significant confidence, with robust positive sentiment at 82% and 74% respectively. In contrast, Oman (53%) and Kuwait (54%) maintain a more guarded stance, mirroring their cautious outlook on the future of both the regional and global economy.
This disparity within the GCC largely stems from differing national strategies and uneven external evaluations from international ratings agencies. The UAE and Saudi Arabia benefit from optimistic growth projections by international bodies such as the International Monetary Fund, reflecting the effectiveness of their economic diversification policies. Conversely, Kuwait faces significant financial challenges, with an anticipated deficit of $19.1 billion for the fiscal year 2024/25, as reported by Bloomberg. The country’s reform efforts are further hindered by political gridlock, adversely affecting its economic outlook. Meanwhile, Oman is actively working to decrease its dependence on fossil fuels and engage ESG investors, although its diversification efforts are comparatively moderate in pace and scale.
02. Geopolitics
"In addition to rapid economic diversification, the countries of the GCC are increasingly shaping global geopolitical dynamics, demonstrating the breadth and depth of their influence. Further proactivity, cross-nation alignment and a clear, shared vision of a prosperous future for all will ensure GCC countries take the lead in solving the world’s most pressing problems."
Ambassador Dana Shell Smith, Teneo Senior Advisor
U.S. Ambassador to Qatar, 2014-2017
While geopolitical instability may not claim the top spot in the roster of challenges faced by GCC decision makers (ranked 7th), our survey reveals that, in terms of enterprise preparedness and resilience, a notable 26% of GCC decision makers express reservations about their organization’s readiness to navigate the challenges posed by geopolitical instability.
This acknowledgment positions geopolitical instability as the second most critical concern in terms of lack of preparedness, trailing only behind inflation (28%).
This gap in preparedness signals a misalignment between risk perception and risk management strategies, indicating a need for more robust organizational adaptability and foresighting capabilities.
While executives across the majority of GCC countries collectively acknowledge their lack of
preparedness related to geopolitical instability, the UAE stands as a notable exception, with
54% indicating a high level of readiness.
By contrast, the rest of the GCC countries present a more subdued landscape. Oman, in particular, ranks highest among its GCC counterparts, with 44% of decision makers expressing a lack of preparedness for geopolitical instability.
03. National Transformation
"The GCC’s laser focus on transformation reflects its strategic foresight and adaptability. It is now for GCC leaders in both the public and private sectors to begin to realize this vision in the short term, while keeping sight of longer-term strategic objectives."
Mark A. Weinberger, Teneo Senior Advisor
Director of Saudi Aramco
Former Global Chairman and CEO of EY
Across the GCC, both public and private sector decision makers are overwhelmingly positive about the role of National Vision documents in guiding their sectors.
More than 90% of respondents from Saudi Arabia and the UAE identify positive influence of Vision 2030 and We the UAE 2031 respectively on their decision-making processes. Although positive sentiment is still significant at 74% on average in Qatar, Oman, Kuwait and Bahrain, this is markedly lower than in Saudi Arabia and the UAE. Since upwards of 85% of respondents from Saudi Arabia and the UAE are from the private sector (versus, on average, 25% of respondents in other GCC countries), this data point suggests strong private sector confidence in Saudi Arabia and UAE leadership vision, ambition and strategy – and in these governments’ abilities to achieve significant transformation agendas.
While it is difficult to speculate on the specific reasons behind differing levels of enthusiasm for national vision documents, aspects may include depth of indicators and priority areas, differing levels of communication at country level and involvement of non-government stakeholders in the early design stages.
Across a 25-year time horizon, decision makers see the GCC taking charge in three key areas: digital transformation, tourism and hospitality, and economic dynamism.
On geopolitical and social indicators, decision makers remain generally neutral – including on whether the region will be Eastern- versus Western-facing or inclusive versus exclusive.
Areas of enthusiasm for decision makers – digitization, tourism and the economy – are long-standing priorities for GCC countries. These themes also emerge in some form across all six National Vision documents, indicating enduring commitment from government and private sector leaders to bolster skills, investments and partnerships in these priority areas, establishing them as hallmarks of regional development growth strategies.
04. Business Environment
"The region’s emergence as a dynamic business and financial hub, powered by diverse economic resources, is key to breaking free from hydrocarbon dependency. Developing agile regulatory frameworks is imperative to sustaining this momentum."
Andrew N. Liveris, Teneo Senior Advisor
Director of Saudi Aramco
Special Advisor to the Public Investment Fund (PIF) and the Crown Prince of Saudi Arabia
As the Middle East’s centers of economic, commercial and financial gravity continue to shift towards the Gulf, a majority of GCC decision makers foresee the Gulf evolving into an increasingly prominent global business and financial epicenter over the next 25 years.
In parallel, a significant cohort of GCC decision makers also maintain the belief that Gulf hydrocarbons remain integral to the GCC’s global economic positioning. Notably, those in Saudi Arabia, Kuwait, Oman and Bahrain foresee the GCC maintaining its role as a top energy supplier for the next 25 years.
A departure from this prevailing perception among GCC decision makers is observed amongst UAE decision makers, where a majority indicate that the GCC is poised to emerge as a global model for sustainable and green development.
Decision makers identify the GCC’s capacity to attract and retain investments as the single most transformative force shaping their organizations’ direction and growth, with 88% recognizing that investment opportunities create the most long-term positive impact.
As the GCC continues to solidify its position as a prominent global business and financial hub, the survey reveals a clear awareness among GCC decision makers of the imperative to adopt sustainable practices, with 53% acknowledging the critical role of adopting sustainable practices in attracting international investors.
In parallel, 50% of GCC decision makers recognize the regulatory necessity for investor-friendly tax policies to maintain an attractive investment climate.
05. Talent Acquisition
"GCC leaders must prioritize long-term economic stability of the region over short-term gains by adopting a holistic governance approach that integrates best-in-class talent acquisition and development into their core growth strategies."
Gaby Sulzberger, Chair, Global ESG Advisory, Teneo
Only one-third of decision makers say they are very well prepared to attract skilled talent domestically. Additionally, out of 22 challenges facing their companies, decision makers across all GCC countries rank “attracting skilled talent domestically” within the top 10, with the UAE, Qatar and Oman placing this issue amongst the top three.
Talent attraction and retention have long been challenges for regional leaders, suggesting the need for more nuanced recruitment, promotion and retention strategies at the organizational and sectoral levels. Labor force legislative and regulatory frameworks in each country influence talent pool stability, indicating an opportunity for public and private sector leaders to collaborate on creating more sophisticated labor law frameworks.
The UAE’s 2022 labor law transformation package and Qatar’s 2024 partnership announcement with the International Labour Organization on labor reforms demonstrate government prioritization of this agenda, which ultimately increases attractiveness to investors and contributes to social and demographic stability.
Although leaders are identifying talent acquisition as a key challenge, they are not leveraging executive and board hiring firms as tools for addressing this specific barrier to organizational stability, ranking this at the very bottom of a list of resources that they may utilize to address internal challenges.
Similarly, investment in people ranks low (44%) compared to more quantitative, short-term-focused areas – e.g., investor relations (57%) and performance improvement tools (55%).
These trends raise questions around the time horizons through which executives frame their organizational governance strategies and indicate opportunities for more holistic organizational strategy planning across the short, medium and longer terms.
06. Technology and AI
The region’s strategic investments and partnerships in AI signal a bold commitment to future-proofing their economies, despite daunting costs of implementation. The opportunity at hand is to build supportive digital infrastructure to enable a true AI revolution in the Gulf.
Mark A. Weinberger, Teneo Senior Advisor
Director of Saudi Aramco
Former Global Chairman and CEO of EY
Technological advancement has ascended to the forefront of strategic priorities for GCC policymakers and business leaders and is recognized as a critical driver for regional growth.
A substantial 64% of decision makers affirm the essential role of embracing innovation, demonstrating a high level of optimism and a proactive approach toward adopting cutting-edge technologies, including digital governance.
Technology is poised to revolutionize the coming decades, with Artificial Intelligence (AI) at the forefront of this transformation. An overwhelming 82% of decision makers recognize that AI and tech regulation will positively impact operations within the GCC.
Meanwhile, 41% of respondents cited the cost of implementing AI as the primary concern. When it comes to adoption of AI, the UAE and Saudi Arabia are positioning themselves as AI powerhouses through substantial investments and global partnerships with the likes of Microsoft and IBM.
07. Cybersecurity
"Cybersecurity in the Gulf demands continued investment in robust infrastructure and strong public-private commitment. As the region transforms and matures — especially in the area of cybersecurity — both agility and ability to meet tomorrow’s security challenges require united action to ensure a secure digital future."
William J. Bratton, Executive Chairman, Risk Advisory, Teneo
Former Police Commissioner of the City of New York
The survey reveals that 25% of GCC decision makers view cybersecurity as the top challenge impacting their companies’ growth.
Additionally, 23% of respondents believe their entities are unprepared to address cybersecurity challenges. This highlights a critical gap between perceived risk and readiness, emphasizing the urgent need for organizations to bolster cybersecurity measures to safeguard against evolving threats and ensure long-term resilience.
To address cybersecurity challenges effectively, GCC decision makers have emphasized their reliance on third-party expertise.
61% of respondents seek external support during the pre-risk phase, demonstrating a proactive approach to preparation by engaging external partners to fortify their cyber defense mechanisms.
Additionally, 24% of decision makers seek external support during the risk phase, while 13% do so post risk, focusing on recovery efforts. This strategic utilization of third-party expertise highlights the value of external insights in enhancing cybersecurity resilience.
08. ESG
"Companies and public institutions must continue to shift their approach towards ESG commitments from mere box-ticking to embracing the intrinsic value they bring to business operations and performance."
Gaby Sulzberger, Chair, Global ESG Advisory, Teneo
There is notable disparity across the GCC on the extent to which decision makers prioritize broad ESG principles within their organizations.
Saudi Arabia and the UAE stand out, with 62% and 53% respectively, emphasizing Environmental, Social and Governance (ESG) considerations. ESG priorities appear lower on the agenda for decision makers in Bahrain (29%), Qatar (26%), Oman (26%) and Kuwait (24%).
Despite this, respondents emphasize sustainability and environmental practices specifically, with 53% of GCC decision makers expressing a strong commitment to adopting sustainable practices, indicating a growing recognition of the need to integrate environmental responsibility policies and priorities within corporate strategies.
When asked about the areas that their company is considering investing in over the next five to 10 years, 38% of decision makers rank diversity and inclusion as a high priority.
However, this is significantly lower than organizational investments in other high priority areas, including investor relations and technology (excluding AI) at 57%, performance improvement at 55% and AI at 51%. In contrast, 42% of decision makers identify diversity and inclusion as central to their growth strategies and the achievement of their organizational objectives, indicating a potentially uneven approach to organization-level governance strategies across the GCC.
While Saudi Arabia and the UAE emerge as frontrunners, with 66% and 56% respectively prioritizing diversity and inclusion, other countries show lower levels of buy-in. For instance, Bahrain, Kuwait and Oman exhibit similar levels of emphasis at 28%, while Qatar indicates the lowest prioritization at 23%.
Methodology
Transformation in Numbers: Unpacking GCC Decision Makers’ Priorities and Perspectives was conducted by the firm’s in-house data, insights and analytics team.
Teneo surveyed 480 “decision makers” across the six Gulf Cooperation Council (GCC) countries, with more than half (55%) in the private sector and 45% in the public sector. The GCC decision makers surveyed include CEOs, business owners, Chairs, Executive Directors and Partners, and Executive / Senior Vice Presidents.
The survey was conducted between March 13 and April 12, 2024.
The report also references findings from Teneo’s 2024 CEO and Investor Outlook Survey, Vision 2024.
Note: Some columns throughout the report may not total to 100% due to rounding.
