HSBC’s Navigator report reveals resilience key to success for UAE businesses
HSBC has revealed that just under a fifth (18 percent) of UAE companies said they were sufficiently agile to make them stable. However, only 1 percent feel that their long-term survival is threatened. According to the HSBC Navigator report, entitled ‘Building Back Better’, the remaining have had to make adjustments or are feeling challenged. 51 percent of those surveyed in the UAE feel strong overall but have had to make a number of adjustments while 25 percent have been challenged but expect to survive. 5 percent of these UAE businesses felt they were significantly challenged and will need to transform to survive.
The report shows that many firms in the UAE (79 percent) were strongly impacted by COVID-19, compared to 72 percent in other markets. The UAE was the second highest market, after India, feeling the impact ‘very strongly’ (42 percent).
Daniel Howlett, HSBC’s Regional Head of Commercial Banking, Middle East, North Africa and Turkey (MENAT), said: “The COVID-19 pandemic is acting as a catalyst for change at many UAE businesses and altering the way they work. UAE businesses have always had a strong entrepreneurial spirit, and we are seeing that come through in how they are adapting to new ways of working and in how they are accelerating transformational plans.
For many UAE businesses, their supply chains have come into focus over the last few months. 72 percent of surveyed companies in the UAE said they intend to increase measures to ensure the security of their supply chains over the next one to two years (compared to 67 percent in all markets), with the most important measure being to identify and secure critical suppliers (38 percent). Around a third of UAE businesses (32 percent) are considering reviewing their supply chain partners’ ability to weather future uncertainty, while 30 percent are considering diversifying their suppliers so they can work with more providers.
However, while collaboration has helped sustain operations during the crisis, businesses see a number of challenges ahead as they seek to build resilience over the next six months. Employee morale was the top barrier to build resilience in the UAE, with almost half (47 percent) viewing it as a major concern. The next most prominently cited barriers were maintaining sufficient cash flow (36 percent) and external factors beyond their control (35 percent).
The crisis has also forced many businesses to rethink their technology investment strategy, with 66 percent of businesses in the UAE strongly agreeing that times of adversity showcase how technology can be better leveraged to enhance or improve how they work. Investing in technology is what many UAE companies (64 percent) plan to do over the next five years while a quarter of businesses view it as a top priority.
What the crisis has also shown to businesses is that sustainability is more important than ever before. Almost all UAE businesses (95 percent) agree on the need to reassess their operations to be built on firmer environmental foundations. The three top aspects of sustainability which UAE businesses expect will directly impact their business were air quality, sanitation/pollution (46 percent), digitalisation of healthcare (44 percent) and the circular economy (43 percent).
Howlett concluded, “It is vital that the UAE private sector pushes ahead with efforts to make their businesses more agile and more resilient.”
The new Navigator report, draws from a survey of over 2,600 companies in 14 countries and territories, including 100 companies in the UAE.