H.E. Al Awar: Together, we can lead the industrial revolution. Our role is to ensure that innovative solutions are aligned with the ethics and standards embedded in the Islamic economy ecosystem
H.E. Al Hashemi: Muslim countries should join forces to develop their technological know-how and share best practices. Investing in human capital and research would help accelerate this process.
As the world grapples with the rapid technological advancements – which are now being widely characterised as a fourth industrial revolution – the closing session of the Global Islamic Economy Summit 2016 examined if the fast-growing Islamic economy can skip the third industrial revolution altogether.
The session underlined the importance of capitalising on innovation and technology to fully develop the Islamic economy, enabling it to become a veritable substitute to traditional economies and offer clear development projections and solutions. This can serve to curb the repercussions of volatility that are impacting the global economy.
The session also called on Muslim economies to transform into knowledge-based systems and invest in research and development to fully capitalise on available opportunities to serve their societies.
Taking part in the panel discussion, His Excellency Abdulla Mohammad Al Awar, CEO of the Dubai Islamic Economy Development Center (DIEDC), said: “The ongoing industrial revolution is a mixed bag of opportunities as well as challenges, and Islamic economies must ride the transition to fulfil the aspirations of their people.”
Al Awar went on to name four key challenges brought about by the ongoing industrial revolutions; first, countries with a labour-intensive workforce are at some disadvantage. People with mechanical skills have lost their jobs to automation, while millions more may be affected. Also, Al Awar added, “As labour costs drop, rich countries will scale back from outsourcing production, impacting countries such as India, China, and Bangladesh. Manufacturing bases will move back to developed countries.”
A third challenge he pointed out was the fact that the divide between the world’s rich and poor countries may widen, combined with the challenge posed by the fact that as many as 60% of the world’s population is still offline – roughly four billion people lack access to the internet, another two billion are without a mobile phone, and 500 million people don’t live near a mobile phone signal.
On the flip side, Al Awar explained why the same industrial revolution yields many opportunities: “The Muslim world has the youngest population on the planet. Our youth are gifted and tech-savvy. They are an important class of consumers and they are also seeking the best services and products.” Al Awar noted that since innovation is the engine for the ongoing industrial revolution, the country with the most “brain power” will reap the most benefits.
More importantly, “Islamic economies can pioneer innovative concepts in the industries that are native to them, such as the massive halal sector and sharia-compliant finance and investments,” Al Awar explained, adding that “the human element embedded in the Islamic economy, with its rich ethics and standards, is the key to defining the trends of the ongoing industrial revolution – to actively seek the benefit of our fellow humans is a governing principle of the Shariah.”
Abdulla Al Awar advised governments of Muslim-majority countries to build more and better schools and universities that encourage creativity, adjust their economic environment to create a level playing field for enterprises of all kinds, and work together in transferring knowledge and expertise.
“To lead the third industrial revolution, governments in Islamic countries need to take urgent steps to build a smart workforce where innovation is the norm,” Al Awar said. He added: “Cross-border collaboration between our governments and the business sector will place us in a superior position to emerge as winners. The good news is that together, we (Islamic economies) can work to participate and even lead the industrial revolution. Our role is to ensure that technology and innovative solutions are aligned with the ethics and standards embedded in the Islamic economy ecosystem.”
The panel also included His Excellency Hassan Al Hashemi, Vice President of International Relations at the Dubai Chamber of Commerce and Industry, who affirmed that Muslim societies are now embracing the digital economy and new technologies given the rapid pace of technology today.
“Stakeholders in the Islamic economy need to capitalise on the rapid Muslim population growth,” H.E. Al Hashemi said, “Muslim population growth is faster the global average and the tech-savvy youth make up a large percentage. Total Muslim consumer spending in 2015 amounted to $1.9 trillion according to Thomson Reuters; this figure is estimated to reach $2.98 trillion by 2021 – this presents many growth opportunities.”
“Muslim countries should join forces to develop their technological know-how and share best practices,” H.E. Al Hashemi advised. “Focusing on the skills gap and investing in human capital and research would help accelerate this process. These efforts would also reduce the brain drain and keep talented at home, while some Muslim countries could also attract top talent from abroad.”
H.E. Al Hashemi considered the UAE as a prime example of a young country on the fast track to social and economic development. “The UAE government has shown its commitment to investing in initiatives that drive the economy forward and foster innovation. The UAE Vision 2021, for example, outlines initiatives to transform the country to a knowledge-based economy, diversified away from oil.”
H.E. Al Hashemi concluded by outlining the Dubai Chamber’s role in supporting these strategies and creating a favourable business environment conducive to growing trade. “The Chamber is always launching initiatives that our members can benefit from,” H.E. said; “some of these include premier events like GIES that bring decision makers together, in addition to trade missions and online platforms that connect Dubai businesses with potential trade and investment opportunities.”
During the session, Nadim Najjar, Managing Director, Thomson Reuters – MENA, explained why the roles of the government, private sector and youth need to evolve to help the Islamic economy move forward.
“Governments need to set policy and legislate and then let the private sector and young generation develop,” said Najjar. “The shared digital revolution will enable Islamic economy which will then add value to wider economy. The Islamic economy must take advantage of it and figure out a new way forward.”