We are starting the next phase of global growth. The growth and opportunity will be redistributed to different parts of the world. For global businesses and many countries, the last 30 years has been about China. Whomever had the right access, fortitude, ambition and patience won. Supply chains hardened and many lives were changed. The free market economic models of the western world lifted 5 billion + from poverty. Developed markets consumed and emerging markets built the infrastructure of the future. Money, energy and economic diplomacy played critical roles at shaping the world we live today. The next 20 years of global economic growth will include different regions and countries.
The Middle East will play an enormous role in shaping this global growth for a number of reasons. Unlike China, its number one asset is energy, and energy diplomacy reaches far and wide no matter the government structures. It will also face similar obstacles as China. Royalty, dictatorship and one-party systems have their limitations. One bad policy or mis-guided ambition can lead to shiny mirages instead of quenching the thirst of the camels.
Regardless, the next 20 years will see fortunes made and fortunes lost. Technology hubs will be created, wealth funds will acquire whole supply chains, and energy will get piped to partners old and new. Knowing the visionary leadership will become the key. How deep will the loyalty be? Will sports teams be the connective tissue? Will the Middle East be the true Middle Kingdom(s)?
Technology, energy diplomacy and leadership will all play roles in shaping the success of the Middle East for the coming decades. The buzz, excitement and shine remind me of the golden China years of decades past - with every business, venture firm and handfuls of celebrities drooling over the visions of 2030 and beyond. This time, technology has accelerated the show. Smart everything coupled with deep pockets can shift the much-needed economic diversification.
China vs Saudi Arabia
Similarities
Sole Country Leadership Roles
Both countries have similar command and control. Know the right people and shit happens fast. It can go away as fast as it begins.
Ambition and Drive
Ambitions of global wealth, power and influence drive the future. You can accomplish many things with money, technology and social engineering.
Planning for 2030 and Beyond
Both countries have been relentless about planning for the future and most importantly marketing the visions of sugarplums. Some, but not all, can be realized.
Technology Driven
Technology has driven both countries. The lack of legacy systems and operations have allowed both to leapfrog technologies and innovation.
Closed Currency System
Both have closed currency systems which protect domestic interests but hinder global ambitions for their citizens and businesses.
Differences
Success in the Global Sports Acquisition World
Sports can be the tip of the spear for cultural assimilation. There seems to be an affinity for sports across many middle east nations. Saudia Arabia is no different. China could not make this happen and seems further away than ever in making this a part of the global integration.
Unlimited Energy Supply
Saudi Arabia holds one of the largest reserves in the world. The Vision 2030 plan is focused on diversification and rebalancing which strengthen and add resiliency. It took China decades to build the manufacturing base to the world. Saudia Arabia already has the base with energy leadership and control.
Younger Demographic
Saudi Arabia has one of the youngest populations in the world. Youth can attract new ideas and fresh ambitions. China could influence the world with population size. Saudi will have to influence with mind and wealth.
Unknowns
Realization
Money can sure solve lots of problems. You can buy talent, technology, industries, however, execution is the harder part. Execution takes time and finesse. Can you keep the people happy for extended periods of time and allow alternative ideas to flourish without free market dynamics?
Geopolitical stability
The stability of any nation, region and leadership can alter the course of history. Like China, the stability of government plays a key role in the success of any vision of the future. Loyalty across key allies can be the strength and/or fissure between people following or competing.
The Opportunity
There is no doubt of the opportunity for businesses, individuals and governments in Saudi Arabia and the Middle East. Technology hubs will be born, and innovation centers of gravity for the next generation of energy storage, manufacturing, healthcare and the cities of the future. Most importantly, new business models will be born. I can’t help but think we have been here before. The faces are different, the places are different, the technology is different, but the game remains the same. Is this a mirage with a well-orchestrated marketing campaign or is this just another business opportunity to lift the next generation?
TJ