27th Annual CEO Survey: UAE Findings

Findings from our 27th CEO survey indicate that business leaders in the UAE are optimistic about the nation’s economic growth, as it remains an exceptionally attractive destination for investors. 

82% of UAE CEOs are confident that the UAE’s economy will improve in 2024, significantly higher than the global average of 44%. This is partly driven by the country’s diversification strategies as it continues to be less reliant on oil and more focused on knowledge-based industries. In fact in the first half of 2023, UAE's GDP grew 3.7%, supported by the non-oil sector that vastly outperformed overall growth. This is a testament to the nation’s commitment to grow its knowledge-based industries on the back of its forward-thinking national strategies, such as the ‘We the UAE 2031’ and the recently launched ‘Dubai Economic Agenda’. The positive momentum has led to an increase in market share for almost three quarters (74%) of business leaders in the country.   

^{Q: How do you believe economic growth (i.e. gross domestic product) will change, if at all, over the next 12 months in your territory?}

The growth optimism has also translated into a positive financial outlook for companies in the UAE with CEOs confident in revenue growth prospects in the next one to three years. More than half of UAE CEOs expect to increase their workforce in 2024, indicating their confidence in business prospects. 

^{Q: To what extent will your company increase headcount in the next 12 months?}

CEOs in the UAE have, however, reported marginally fewer acquisitions compared to their global peers, in line with the overall regional trend of cautious optimism, with 32% of CEOs in the UAE having made a major acquisition (more than 10% of assets) over the last three years, versus 35% globally. 

However, it is interesting to note that within the region, the UAE has seen less substantial declines in deal volumes, as reported in our 2024 TransAct Middle East report. Driven by a supportive business environment and a streamlined legal framework, we find the technology, energy, industrial and financial services sectors to be the most active.

In a country that is transforming at a rapid pace and constantly challenging itself to improve and accelerate, 38% of UAE CEO’s believe that their businesses will not be viable in 10 years if they do not adapt, compared to 45% globally. 

In the true UAE spirit of innovation and ambition, the UAE that has continued to reinvent itself as it scales new heights, CEOs in the country have made meaningful changes to their businesses in the last five years by developing new products and services, forming strategic partnerships, adopting new technologies and investing in climate innovation. 

CEOs in the UAE have placed a greater emphasis on technology, with 71% selecting it as an important driver over the last five years to have impacted value creation, compared with 46% globally. In addition to this 35% had developed new products and services and 56% formed new strategic partnerships. 

^{Q: Please indicate the extent to which the following factors have driven changes to the way your company creates, delivers and captures value in the last five years?(Showing sum of ‘large’ and ‘very large’ extent only)}

Looking ahead, more than three quarters of the CEOs in the UAE anticipate technological change to be critical for creation, delivery, and capture of value in the next three years, compared to 56% globally. This is unsurprising given the UAE has always been at the forefront of tech reinvention, with significant investments in AI, strengthening its position as a global tech innovation hub. In fact, with the recent launch of the Falcon series of large language models, the UAE is now able to compete and collaborate with frontline technology nations when it comes to Gen AI capabilities.

The UAE's tech-forward ethos has helped businesses reinvent themselves with GenAI, using this to open up avenues of growth, efficiency and unparalleled opportunities. 74% of CEOs in the UAE expect that GenAI will significantly change how their companies create, deliver, and capture value over the next three years, while almost half say they changed their tech strategy last year, ahead of the 31% global average. Moreover, 56% said their companies used GenAI - significantly ahead of their global peers (32%), indicating greater willingness to embrace GenAI and stay ahead of their competition through early adoption. 

^{Q: To what extent do you agree with the following statements about generative AI?}

So how can CEOs benefit from leveraging GenAI in the next 12 months? 

• More than three quarters of leaders in the UAE believe that GenAI can enhance the quality of their company's products and services 

• 68% believe that adopting GenAI can give their organisations a significant competitive advantage; and

• 74% are planning to utilise GenAI in order to better connect with stakeholders and build trust 

The survey has also revealed that 74% of the UAE CEOs believe that GenAI can improve their work efficiency, while 68% believe that GenAI can improve their employees' work efficiency. UAE CEOs are also optimistic about the financial impact of GenAI, with 62% expecting increased revenue  and 74% increased profitability - both significantly higher than responses from global peers.  Moreover, 21% of the UAE CEOs expect that GenAI will result in job creation in the next 12 months, ahead of the 13% expecting this globally.

^{Q: To what extent will generative AI increase the following in your company in the next 12 months?}

Climate innovations and the COP effect 

Our survey results have indicated that 18% of CEOs in the UAE regard climate change as a major concern, compared to 12% of their global peers, while 41% (vs 30% globally) have identified climate change as being a key driver for corporate change in the next three years. 

Business leaders in the UAE are keen to play a leading role in pushing forward the region’s ambitious climate agenda. This commitment was particularly evident at COP28 hosted in Dubai in December 2023 where the government's pledge of a $30 billion climate-focused fund showcased the UAE’s dedication to addressing climate challenges. At the event numerous business entities announced initiatives aimed at enhancing sustainability and reducing their carbon footprint, and achieved the historic UAE Consensus. 

9% of UAE CEOs in the survey reported completion in innovating climate-friendly products and services, with a similar number noting improvements in energy efficiency, on par with their global counterparts. 21% of UAE leaders told us that they were selling products and services that supported their customers’ climate resilience efforts.   

^{Q: Which of the following best describes your company’s level of progress on each of these actions? (Sum of in progress and completed)}

Regulatory complexities (36%), lower-returns for climate-friendly investments (30%) and lack of climate-friendly technologies in their sectors (27%) were identified as the key challenges that prevented CEOs from decarbonising their business models. 

Macroeconomic volatility, geopolitical conflicts and cyber risks are the key threats topping the risk agendas for UAE CEOs for the next 12 months. 32% of business leaders in the UAE have indicated macroeconomic and geopolitical conflicts to be the most important threats, underscored by the ongoing conflict in Gaza and the Red Sea crisis that have resulted in a deep humanitarian crisis and supply chain disruptions in the region. 

Globally, only 24% of CEOs see macroeconomic volatility, while 18% consider geopolitical conflicts as key threats. 

Also, as technology becomes increasingly integrated into the day-to-day operations of businesses in the UAE, 29% of CEOs in the UAE (vs 21% globally) see cyber risks as a key threat, accepting the need to enhance cybersecurity measures to tackle extremely sophisticated cyberattacks.

As the UAE economy expands, business leaders must seize the opportunities that are emerging in a wide range of industries as a result of the government’s trade-friendly regulations and world-class infrastructure. 

To succeed, business leaders must invest in building strong connections and partnerships with local stakeholders, and stay updated with industry trends and innovations. 

Given the GenAI boom, CEOs must take a proactive approach towards skill development to prepare the workforce for future opportunities. 

Beyond COP28, business leaders must demonstrate their commitment to contributing positively to regional sustainability. They should revisit their business models and restructure them to support sustainable development. It is critical that private sector leaders set proactive plans in place to help achieve the net-zero goals for the region. 

And finally, given the geopolitical threats in the region, UAE businesses must focus on increasing their risk resilience to navigate the volatility effectively.