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i s s u e         1 6      2 0 1 1G L O B A L                     i s s u e s                    i n        P e R s P e C ...
“innovaTion is The                                                         sPecific Tool of                               ...
COVER PHOTOGRAPHYSpring-Arrival by MohsenMohammed al-Danjani                                                              ...
eDiT                                                                                                               q1 2011...
the rightplace at the right time           wriTTen By sTeve hill  An unusual entrant at the top of thecountries to visit i...
PHoTo by MArIo TeSTINo/CLAreNCe HouSe PreSS offICe vIA geTTy IMAgeS/gALLo IMAgeS.                                         ...
Organic                                                                                                                   ...
specTrumFinancialSolutionsParticipants from 35 countries took partin a two-day global investment forum atthe king faisal C...
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invesTmenTseasy does iTSAuDI ArAbIA CAN be rIgHTLy ProuD of ITS MANy ACHIeveMeNTS IN THe PAST yeAr, buT                   ...
01 King Abdullah Economic City   (KAEC).02 Proposed residential villas in the   new age KAEC, Saudi Arabia.03 The proposed...
invesTmenTs                                                                                                               ...
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THinK WOrlD evenT“ innovaTion                                        is the specific tool ofentrepreneurs, the means by wh...
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ceO inDusTry                                                                                                              ...
CourTeSy of DISNey                                                                                                        ...
ceO inDusTry                                                                                                              ...
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
THINK Magazine Q1 2011
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THINK Magazine Q1 2011

  1. 1. 2 0 1 1G L O B A L I S S U E S I N P E R S P E C T I V E q1
  2. 2. C M YCMMYCYCMY K
  3. 3. i s s u e 1 6 2 0 1 1G L O B A L i s s u e s i n P e R s P e C T i V e 18 easy does iT 32 charging ahead 56 Power surge Saudi Arabia’s status as a global business destination Electric transport, a rapidly accelerating sector of the Nuclear energy is undergoing a resurgence aroundcontinues to climb, as reflected in the 2011 World Bank Ease automotive industry, can combine excitement with efficiency the world, as booming populations and development createof Doing Business index. and economy. unprecedented power demands. 22 comPeTiTive advanTage 36 Budding genius 60 The redux of luxe The 2011 Global Competitiveness Forum, with the Excellence might come easily to child prodigies but The improved outlook for the global luxury market istheme of innovation as a competitive advantage, gathers how do parents ensure their precocious children become set to continue, but not without facing up to some significantinternational leaders in business, politics and intellectual fields. well-adjusted adults? challenges. 28 humane naTure 41 innovaTion and ingenuiTy 64 eco TriP THINK talks exclusively to best-selling author, Young Saudi inventor has a bright future ahead of him, Eco-friendly tourism is expanding from niche into theentrepreneur and dedicated activist, Paul Hawken, about the with numerous patents and software creations at just 23 years mainstream, with more businesses and governments seeingsuccess of his business, social and environmental ventures. of age. the green light.06
  4. 4. “innovaTion is The sPecific Tool of enTrePreneurs, The means By which They exPloiT change as an oPPorTuniTy for a differenT Business or a differenT service” PeTer DruCker, SoCIAL eCoLogIST 68 some like iT hauTe The world may still be reeling from suggestions of regulars OpiniOna double-dip recession, but high fashion marches on 13 sPecTrum 42 whaT do you Think?regardless. The latest news and creativity from around the globe Students discuss the merits of e-learning 75 Profile 47 Thinking forward 76 caughT on camera Natalia Allen, design entrepreneur, bridges the divide between In our post-crisis business environment, companies are adjusting We unveil the best images and speak to some of design and activism their strategies to become more agile, responsive and accountablethe winners from the THINK and SAGIA photography 83 fuTure Thinking 48 scTa PresidenT sPeaks To Thinkcompetition. An ambitious plan for mass-scale solar power HH Prince Sultan bin Salman, president, Saudi Commission 85 Books for Tourism and Antiquities, on Saudis cultural responsibilities The best reading material reviewed for you 52 Think roundTaBle 86 visionary Leaders from the world of arts and culture discuss the global Nick Pope, ufologist, on what space has to teach humankind appeal and economic value of national heritage treasures 07
  5. 5. COVER PHOTOGRAPHYSpring-Arrival by MohsenMohammed al-Danjani SAGIA eDITorIAL ADvISor Fahd M Hamidaddin eDITorIAL LIAISoN Aseel A Al-Zamil mOTIVATE PUBLIShING eDITor-IN-CHIef Obaid Humaid Al Tayer grouP eDITor + MANAgINg PArTNer Ian Fairservice grouP SeNIor eDITor Gina Johnson grouP eDITor Catherine Belbin catherine@motivate.ae CHIef Sub eDITor Iain Smith iain@motivate.ae eDITorIAL ASSISTANT Belinda Igaya belinda@motivate.ae geNerAL MANAger grouP SALeS Anthony Milne anthony@motivate.ae geNerAL MANAger – ProDuCTIoN + CIrCuLATIoN S Sasidharan sasidharan@motivate.ae ProDuCTIoN MANAger C. Sudhakar sudhakar@motivate.ae DePuTy ADverTISeMeNT MANAger Omar Al Eit omar@motivate.ae DeSIgN Design Studio INTerNATIoNAL CorreSPoNDeNTS Ashlee Beard, Laura Collacott, Glenn Freeman, Steve Hill, Elsa Mclaren, Joanne Molina, Lisa Vincenti SAuDI ArABIAn GEnErAL InVESTMEnT AuTHOrITy (SAGIA) C SAGIA HEADquArTErS Imam Saud Bin Abdulaziz road (university road), PO Box 5927, riyadh 11432, Kingdom of Saudi Arabia, T +966 1 203 5555 F +966 1 263 2894 E Info@sagia.gov.sa M SAGIA InTErnATIOnAL OFFICES Y MIDDLe eAST & AfrICA Hatem A Al-Ahmad; e mena@sagia.gov.sa CM euroPe Mai Al-Torki; e europe@sagia.gov.sa MY frANCe Lucile Pons van der Slikke; e france@sagia.gov.sa ITALy Mai Al-Torki; e italy@sagia.gov.sa CY gerMANy Dahlia T rahaimy; e germany@sagia.gov.sa CMY uNITeD kINgDoM Sara bouzo; e uk@sagia.gov.sa K THe AMerICAS Ahmed Islam; e americas@sagia.gov.sa WASHINgToN DC Ahmed Islam; e americas@sagia.gov.sa eAST ASIA Noriko Sozuki; e japan@sagia.gov.sa WeST ASIA Meshari S. Al-khaled; e singapore@sagia.gov.sa MOTIVATE PuBLISHInG HeAD offICe Po box 2331, Dubai, united Arab emirates T +971 4 282 4060 f +971 4 282 4436 e motivate@motivate.ae Abu DHAbI e motivate-adh@motivate.ae LoNDoN e: motivateuk@motivate.ae InTErnATIOnAL MEDIA rEPrESEnTATIVES AuSTrALIA okeeffe Media; e okeeffekev@bigpond.com.au CHINA/HoNg koNg emphasis Media Limited; e advertising@emphasis.net CyPruS epistle Communications & Media; e nasreenk@epistlemedia.com frANCe/SWITZerLAND Intermedia europe Ltd; e administration@intermedia.europe.com gerMANy IMv International Media Service gmbH; e j.hoffmann@vhb.de INDIA Media Star; e ravi@mediastar.co.in ITALy IMM Italia; e lucia.colucci@fastwebnet.it JAPAN Skynet Media Inc.; e skynetmedia@y2.dion.ne.jp Turkey Media Ltd; e mediamarketingtr@medialtd.com.tr uNITeD kINgDoM Spafax Inflight Media; e nhopkins@spafax.com uNITeD STATeS redwood Custom Communications Inc.; e brigitte.baron@redwoodcc.com PrINTINg Emirates Printing Press, Dubai Motivate Publishing LLC, on behalf of Saudi Arabian general Investment Authority, publishes THinK quarterly. SAgIA and Motivate Publishing do not accept liability for errors or omissions contained in this publication for whatever reason, however caused. The opinions and views contained in this publication are not necessarily those of SAgIA or of the publishers. SAgIA and the publishers take no responsibility for the goods and services advertised. All materials are protected by copyright. sagia.gov.sa All rights are reserved. No part of this publication may be reproduced in any material form whatsoever without the written permission of the copyright owner, except as may be permitted by applicable laws.
  6. 6. eDiT q1 2011THinK glOcalIncreasingly, nations not traditionally associated with innovation are adapting and implementing new technologies, especially information technologies, social media and telecommunications, in becoming creatively and globally competitive. A case in point is the Global Competitiveness Forum 2011, hosted by SAGIA in Riyadh, where the organisers have used the latest technology to pioneer one of the first e-forums of its kind, leveraging tablet computing and sophisticated networking. In the new de-centralised global community, countries not historically associated with innovation and thought leadership are beginning to take the lead. In Asia, this is happening in a range of sectors including manufacturing. This is also exemplified in the Middle East, where governments are slowly but surely diversifying national revenue sources outside of petrochemical industries. Further examples of this are the new breed of inventors emerging within the Kingdom and also its foray into automotive manufacturing. Similarly, Saudi Arabias dynamic ministers are adopting social media such as Facebook and other relevant digital media platforms, to access new channels and create dialogue in search of effective solutions for the new globalised Kingdom. In this issue of THINK, our editorial focuses on the increasingly prevalent phenomenon of glocalisation. The term has gained broad acceptance from the international business community in recent years, having been adapted from Japanese business practices. Indeed, the word is derived from the Japanese word dochakuka, which literally means global localisation. Our international correspondents address numerous issues of increasing global concern, from a broad spectrum of topics within the worlds of business, science, technology and culture. This diversity of thoughts, discussions and opinion reflects the increasing convergence of these themes and the ever-broadening implications of events around the world on the lives of global citizens. Whether locally, globally or in a glocal combination of the two, this first issue of THINK for 2011 encourages you to think glocal.Catherine Belbin, Group Editor THINK@motivate.ae LINA SALeH MALAIkA 011
  7. 7. the rightplace at the right time wriTTen By sTeve hill An unusual entrant at the top of thecountries to visit in 2011 list, some royalwedding-inspired short breaks in Londonand a boost to organic farming in Saudi Arabia are all on the agenda 013
  8. 8. PHoTo by MArIo TeSTINo/CLAreNCe HouSe PreSS offICe vIA geTTy IMAgeS/gALLo IMAgeS. specTrum royal connections The british royal wedding in April between Prince William and kate Middleton is expected to spark a large increase in tourist numbers to London. And short-break specialists Superbreak leading The way has reacted by launching a series of geTTy IMAgeS tailor-made wedding packages that include a stay at a range of three to five- star hotels in the centre of the capital as well as a trip on the London eye and a indra Nooyi, the chief executive of PepsiCo the Indian Institute of Management and was and chief executive of Gulf One Investment two-for-one dining card. since 2006, has been named number one in the employed by Johnson & Johnson in Mumbai Bank, was ranked 24. Financial Times’ list of the top 50 women in before moving to the United States to study Legendary US TV talk show host Oprah world business for a second successive year. at Yale. Winfrey was designated as the newspaper’s lighting Up Born in Chennai, she completed her MBA at Saudi national Nahed Taher, the co-founder woman of the decade. The world’s biggest LeD media facade has been installed at the king’s road Tower in Jeddah by french company Citiled. The Place To Be The 10,000 square metres screen alBania is the country to visit in 2011, covers 21 floors on the north and south according to travel company Lonely Planet, sides of the building as well as 16 levels which is extolling the virtues of a destination on the west facade, and features more customarily regarded to be off the beaten path. than five million LeDs which can display The Mediterranean country boasts heritage up to 16.7 million different colours. sites, beautiful beaches, fine food and a warm More than six months were needed welcome, according to Lonely Planet’s latest to produce the innovative system, which book, Best in Travel 2011. is almost transparent, guaranteeing Brazil, which is set to host the 2014 World daylight for the building’s occupants, and Cup and the 2016 summer Olympic Games, installation and testing took six months. is listed in second place with Cape Verde, off The dynamic “skin” can display a wide the coast of Africa, third, Panama fourth and range of content and messages including Bulgaria fifth. graphic, artistic, cartoons, videos, news, The top 10 also includes Vanuatu (sixth), photos and events. Tanzania (eighth) and Syria (ninth). 014
  9. 9. Organic agreement organic farming in Saudi Arabia has been boosted by an agreement between gTZ Saudi Arabia and the Morarka foundation, of India. A delegation of senior officials from the Saudi Agricultural Ministry and farmers recently visited certified organic farms at bhuj, where the foundation has been working since the 2002 earthquake, and farm lands in rajasthan. Technical assistance is to be offered to Saudi farmers regarding the planning of organic agriculture, development of technology and training, as well as management expertise, record maintenance and certification. Worldwide, 30.4 million hectares of land is now used for organic production, generating global trade of uS$38.6 billion.geTTy IMAgeS/gALLo qaTar kicks major goal qaTar recenTly won the right to host football event is watched by an estimated 700 who said that Qatar’s win was a victory for the the FIFA World Cup 2022, winning the bid ahead million people worldwide, and is expected to entire Arab world. of the United States, Japan, Korea and Australia. benefit the country and the entire region. In a statement issued after Fifa’s announcement, Qatar led in the ballot on each of the four Qatar has promised to spend US$50 billion Sheikha Moza said: “The importance and usefulness rounds, obtaining 14 votes against eight to the on infrastructure upgrades and US$4 billion to of this event cannot be overstated…it represents US in the final round. build nine stadiums and renovate three others. a historic opportunity to show the Middle East’s For Qatar, the GCC and the Middle East, this A leading proponent of Qatar’s successful bid openness to the West and to help further promote Berth control represents enormous opportunities. The global was HH Sheikha Moza bint Nasser Al Missned, dialogue among civilisations and cultures.” Saudi Arabia is expected to see a 50 per cent increase in the number of marina berths by 2012, according to a recent study by leading industry consultancy ToP gear Mike Derrett Marine. The nation’s rapidly growing leisure The recent Riyadh Motor Show attracted fleet and an upsurge in overseas boating more than 96,000 visitors over its five-day run tourists are helping spark this growth, while deals worth around US$60 million were making the marine sector an important signed by international car accessories and investment opportunity for domestic and services companies. foreign markets. The event, at the Riyadh International Saudi Arabia, which recently Convention and Exhibition Centre, also played host to the second edition of its generated around 2,000 applications to international boat show, currently boasts participating financing companies for car 10,000 vessels measuring five metres or reservations, on top of deals concluded at the more in length, and trails only kuwait in stands of automotive dealers. terms of boat population in the gCC. The Kingdom is the largest auto market in More than 130 internationalCourTeSy of LexuS the Middle East region and the fifth largest in companies and brands were represented the world for auto parts, accessories, service at the show, staged at the Al furusya and garage equipment. Marina & yacht Club in Jeddah. 015
  10. 10. specTrumFinancialSolutionsParticipants from 35 countries took partin a two-day global investment forum atthe king faisal Conference Hall at theriyadh Inter-Continental Hotel. Saudi Investor Window 2010showcased how Islamic finance couldbecome a solution to the world financialcrisis. London-based uCI Internationalco-organised the event with the Saudi-based Islamic International foundation foreconomics & finance (IIfef) and Motamara. “Increasingly, Western and Asiangovernments and business leaders areturning to Islamic finance to providefinancing for major international projectsin response to the global credit freeze,”said Tahar benourrad, uCI’s chairman.Debate heats UpA series of recent climate change-relateddisasters around the world highlight mena growTh PredicTionthe need for stronger action to reducegreenhouse gases, according tointernational lobby group 350.org. The series of natural disasters includesome of the worst wildfires ever recorded growTh in The MENA region is forecast to outpace the global Property prices in Egypt grew 10 per cent in 2010, according toin the Middle east, flood-related crises average in 2011, signalling the property sector is ripe for investment. Global Property Guide, with similar growth forecasts for 2011.in South America and the recent cold The International Monetary Fund is predicting gross domestic Property prices in some parts of Saudi Arabia surged as much as 40weather experienced in the uk and product will expand 5.1 per cent in the MENA region in 2011, higher per cent in the second half of 2010, according to Banque Saudi Fransi,europe, some of the iciest conditions than the forecast global average of just 4.2 per cent. and will likely continue to appreciate in the New Year.experienced in 100 years. “All of these The MENA region is expected to be second only to Asia in terms of “There is still a lot of cash on the sidelines, but there are opportunitydisasters are taking place with just annual growth, with economies of the region expanding at more than costs to keeping liquid cash. Investors will now be weighing up their390 parts per million of Co2 in the double the pace of advanced nations, including Europe and the United options about where to invest next year, and property is shaping up toatmosphere,” said bill Mckibben, author States. be one of the best performing sectors,” said Ziad El Chaar, managingand founder of 350.org. “Physics and Property sectors in Saudi Arabia, Lebanon and Egypt are all expected director of DAMAC Properties.chemistry have laid their cards on the to report double-digit growth in 2011. Lebanon’s Director General of The region is also getting a boost from Qatar’s successful 2022 Worldtable: above 350 [parts per million of the Economy Ministry, Fuad Fleifel, predicts property prices in Beirut Cup bid, with Shuaa Capital predicting Qatar may spend close to US$90Co2 to oxygen], the world doesn’t work.” will rise another 15 per cent in 2011. billion on housing and infrastructure in the lead up to the tournament.charity Beginsat home with the anonymous Saudi investor.Saudi Arabia features the greatest landmark In April, a French court ruled that Saudi-number of charitable societies andfoundations in the gCC, according to hoTel sold backed JJW Hotels & Resorts would have to pay US$130 million to Starwood Capital toa report published by the International settle a dispute involving the aborted sale ofCentre for research and Studies. a ProminenT Saudi investor, part of Le Crillon to JJW. “gulf Charity Work: A first Information the Kingdom’s royal family, has successfully The price paid by the buyer, described as anreport” reveals that 86 per cent of such purchased the Hôtel de Crillon in Paris. “eminent” member of the Saudi royal family,bodies are based in the kingdom with The luxury hotel, built in the Champs has not been disclosed. However, Reutersthe remaining in kuwait, bahrain, Qatar, Elysees area in 1758 after being commissioned quotes a source close to the sale in estimatingthe uAe and oman. by King Louis XV, has long been the subject of the sum at over US$328 million. Just over 25 per cent of charitable legal wrangling over the sale. Groupe Concorde, the prestige hotel unit ofaction is aimed at the poor, with almost Groupe du Louvre, a unit of Starwood Groupe du Louvre, will continue to operate the18 per cent concentrated on orphans Capital, which acquired the hotel in 2005, hotel on behalf of the new owner over a six- toand 16.4 per cent on the disabled. confirmed it has now agreed on sale terms 12-month period.016
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  12. 12. invesTmenTseasy does iTSAuDI ArAbIA CAN be rIgHTLy ProuD of ITS MANy ACHIeveMeNTS IN THe PAST yeAr, buT 01 eMAAr ProPerTIeSIT refuSeS To reST oN ITS LAureLS AND IS IMPLeMeNTINg eveN More reforMS AIMeD ATSIMPLIfyINg DoINg buSINeSS IN THe kINgDoM.wriTTen By joanne molinalasT November, the Saudi Arabian General InvestmentAuthority (SAGIA) was pleased to announce that the country has Chevron Phillips Chemical (United States), Alcatel-Lucent (France) and BUPA Investments (Britain). SAGIA and GE signed an MOU to pilotdramatically improved its ranking in the World Bank Report Ease of innovative and sustainable technologies in Saudi Economic Cities in June cost of startingDoing Business Index 2011. From the 183 countries surveyed for the 2010. a business in us$report, Saudi Arabia made significant progress by moving up to 11th “Cisco recognises the visionary leadership and ambitious reform 9000place from the 67th place in the global ranking it occupied in 2005. programme that has brought about an improved business environment It was able to sustain and improve its position as a global investment in Saudi Arabia as well the great potential this environment offers for 8000destination ahead of 172 countries this year, while some of its neighbouring, businesses and citizens alike. As one of our key focus countries, our 7000like the UAE, Bahrain and Qatar moved down the rankings. strategy is to work with both the government as well as private sector This accomplishment is just one among many for the Kingdom this organisations to support continued development and growth.” says Dr 6000year. In addition to being honored by the World Bank as the fifth fastest Badr Al Badr, managing director of Smart + Connected Communities, 5000reformer over the past five years, its major reforms make the country a Asia and Africa, Cisco Systems International. 4000much more attractive investment destination. The Kingdom moved up Saudi Arabia’s improvement in the World Bank’s Ease of Doingto 11th place from 13th in the World Bank Report due to reforms to Business 2011 Index ranking was driven by major reforms, including the 3000enforce commercial contracts and investor protection. Finally, the 2010 elimination of the minimum capital requirement for starting a business, 2000UNCTAD report ranked Saudi Arabia as the eighth largest recipient of streamlining the processes for starting a business and creating theFDI, attracting over US$36 billion. This meant major global corporations foundations of a competitive internal credit market. 1000commencing significant operations – GE, Alcatel, BUPA and CISCO. “We are extremely pleased to improve our ranking and continue to 0 Top corporate investors in Saudi Arabia over the past five years were be recognised as one of the easiest countries to do business with on a 2006 2010018
  13. 13. 01 King Abdullah Economic City (KAEC).02 Proposed residential villas in the new age KAEC, Saudi Arabia.03 The proposed harbourside financial district of KAEC.04 Artist’s impression of the massive biosphere of King Abdullah International Gardens (KAIG). 02 03 04 global basis. Saudi Arabia has been very successful at attracting a steadily When asked why Saudi Arabia’s recent success would be good for the growing flow of foreign investment since 2005, which contributed to the world, Al-Dabbagh explained: “At one point during his speech at the country’s rapid and sustainable economic growth,” says His Excellency 2009 Global Competitiveness Forum, Michael Phelps said: ‘There are no Amr bin Abdullah al-Dabbagh, the Governor of SAGIA. limits to my life.’ I thought this was a very profound statement at the time, “Saudi Arabia is already ranked as the easiest place to do business and still do, and still think about it quite often. Most people I imagine in the entire MENA region and now we are keen to compete in the took the obvious view – given who he was and what he had just achieved reduced time to start a international arena. We are pleased that Saudi Arabia’s efforts to reform – that we can accomplish almost anything we dream of and set out to. But business to 5 days have been recognised by the World Bank and the country moved up in that’s not how I understood it. I understood it to mean that my life does40.0 the rankings yet again this year. not begin and end with my own physical boundaries, but that I have an35.0 “According to the World Bank, about 85 per cent of economies made impact on the world beyond myself.” it easier to do business in the past five years, with Saudi Arabia ranked as “What I do has a reach, perhaps an enormous one, on a vast, remarkable,30.0 the fifth fastest reformer. This is a testimony to our work over the past five often delicate and certainly complicated tangle of living beings, my children25.0 years on the creation of a pro-business environment, a knowledge-based included. When we set out to be among the top 10 most competitive20.0 society and the development of new world-class ‘Economic Cities’.” nations in the world, we weren’t competing against anything but our ability15.0 The World Bank Ease of Doing Business 2011 Index analysed regulations to become our own personal bests in light of certain well defined standards10.0 affecting nine areas of the life of a business across 183 countries, including that have and will continually evolve, and that theoretically will bring 5.0 starting a business, dealing with construction permits, registering sustainable national and global prosperity,” he continues. 0.0 property, getting credit, protecting investors, paying taxes, trading across “I think it was in the mid-1980s when Michael Porter said that the 2006 2010 borders, enforcing contracts and closing a business. concept of resource productivity would give us a new way at looking at 019
  14. 14. invesTmenTs eMAAr ProPerTIeS 01 Cthe full-system costs as well as the value associated with every product stakeholders involved including His Majesty Custodian of the Two Holy we are Mwe create. ‘Full system costs’ and ‘value’ – that’s what I’m trying to Mosques King Abdullah, the Ministry of Commerce, the Shoura Council exTremely Yunderstand. What value our product can bring the world, the costs and chambers of commerce across the country. CMassociated with both delivering and not delivering it, and the impactconstantly improving it will have.” The results of these reforms are already overwhelmingly positive. The New Regulations data from the Unified Center for Commercial Pleased To MY The numerous impacting reforms undertaken by SAGIA and the Registration shows that during the months of March and April 2010, 429 imProve our CYNational Competitiveness Centre (NCC) were part of a co-ordinatedprogramme to simplify and reduce the cost of a variety of key business companies registered. For the period of March 1-April 14, the Center saw registration of approximately 43 companies per week and the average cost ranking and CMY conTinue Kprocesses. Although no one reform creates an impact on its own, two was almost US$1,500. For the period after April 17, the Center saw anreforms have had more transformational impact on doing business inSaudi Arabia than the rest. average of 71 companies register per week, with the cost being US$1,000 for every company. The average processing time for all companies was 2.5 To Be The first is the elimination of the capital requirement for starting a business. days. A sizeable number (nearly 15 per cent) were registered in one day, recognisedin many counTries, a minimum capital requirement for and over 90 per cent of companies were registered in under three days. Going forward, there are numerous strategies for more reforms. One of as one ofstarting a business represents a key barrier for aspiring entrepreneurs the main initiatives will be communication as SAGIA needs to continue The easiesTto start their businesses. In 2006, the minimum capital requirement wasapproximately US$125,000, today entrepreneurs and small businesses in to communicate the impact that reforms have had on Saudi Arabia. There is still a knowledge gap between the impact and systems that have counTries ToSaudi Arabia benefit from a zero minimum capital requirement. recently been put into place and the business community. SAGIA and the do Business This reform along with a dozen others have resulted in a simplificationof the process to acquire a new business license from 39 days to just NCC will work to inform and communicate key changes. Additionally, SAGIA and the NCC will be focusing on a key set of wiTh on afive and a reduction in the cost to the entrepreneur from US$8,530 to reforms that address the issues that still place the Kingdom outside of the gloBal Basis.US$1,000. The result is a rapidly increasing number of business formed top 50 in the world, as well as continue to aim for recognition of reforms amr Bin aBdullah al-daBBagheach year from 3,400 in 2006 to nearly 5,100 in 2009. that have not been fully acknowledged by the World Bank. For example, The second most important reform was the amendments to the getting credit, closing a business and dealing with construction permitsExecutive Regulations for the Commercial Lien Act. In February 2010, are all important indicators that will be highlighted in the future.the Minister of Commerce and Industry passed that will materially The top priority, however, will be to drive reforms that continue toimprove the process of getting credit for Saudi businesses by providing a decrease the amount of time and procedures necessary to enforce acentralised registry for lien records, clarifying the priority of certain types contract. This has been a long standing initiative of SAGIA and the NCC,of creditors and improving procedures for settlements. These reforms as exhibited through the following actions: hiring new judges, developingform the foundation for a competitive credit market as they reduce the case management systems, establishment of commercial courts and therisk facing potential lenders and will unlock the flow of capital to small development of the electronic court management system.and medium-sized businesses. All of these have made enforcing contracts easier, but SAGIA hopes to However, some reforms were particularly challenging. The elimination continue to build on and develop a more efficient process by continuingof the capital requirement was a significant accomplishment by the to roll out electronic case management systems, and track enforcement 01 Planned indoor-outdoorKingdom, due to the complex nature of the previous law and the countless and judgments times to ensure the process is getting more streamlined. walkways for KAIG.020
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  16. 16. THinK WOrlD evenT“ innovaTion is the specific tool ofentrepreneurs, the means by which they exploit change as an opportunity between alternative forms of energy and capitalism. The world’s leading scientists and physicists also gather to explore how enquiries about outerfor a different business or a different service. It is capable of being space can offer innovative forms of problem solving. Innovations inpresented as a discipline, capable of being learned, capable of being social media, heavy industries and “greenovation” will also be explored.practiced. Entrepreneurs need to search purposefully for the sources of In line with the themes of innovation and eco-awareness that underpininnovation, the changes and their symptoms that indicate opportunities this year’s GCF, the event is a paperless forum. Through the use of iPadsfor successful innovation. And they need to know and to apply the and a sophisticated networking solution, delegates and guests will be ableprinciples of successful innovation.” Peter Drucker, social ecologist to search and send messages, communicate and request meetings with “Innovation as a Means of Competitiveness” is this year’s theme at the other registered GCF members.fifth annual Global Competitiveness Forum (GCF), the first e-forum of its In their presentations and panel forums, the esteemed guests explorekind. The GCF is held in Riyadh, Saudi Arabia, under the patronage of HM the meaning of competitiveness and innovation and discuss how theseKing Abdullah Bin Abdulaziz, the Custodian of the Two Holy Mosques. definitions impact the ideas and principles that guide their organisationsStill celebrating two of Saudi Arabia’s most recent great achievements: and businesses, both at the present time and in the future.comPeTiTiveadvanTageIN THe MoDerN WorLD, THe CoMPANIeS AND orgANISATIoNS THAT INNovATe ANDeMbrACe MoDerN CoNCerNS, SuCH AS eNvIroNMeNTAL AWAreNeSS, AND THeNSeek THe ANSWerS To THeSe ISSueS Are beST PLACeD To ProSPer.wriTTen By joanne molinabeing recognised as the 11th most competitive investment destination in innovaTion, comPeTiTivenessthe world, according to the World Bank’s Ease of Doing Business Report, and The markeTPlaceand being recognised as the eighth largest recipient of foreign direct “I agree with the approach of the Global Competitiveness Forum. Iinvestments globally, according to the United Nations Conference for think of competitiveness in terms of pillars – for example, technological,Trade and Development (UNCTAD), this tremendously successful year company and national competitiveness. Companies are competitive whenfor the Kingdom is reflected in the GCF’s 2011 programme. they demonstrate a product or service offering that is scalable, sustainable Founded in 2006 by the Saudi Arabian General Investment Authority and makes a lasting impact on the way people live. Competitive countries(SAGIA), the conference originated as a gathering of informational and share in common a community and culture of investment, risk takingcommunication technologies (ICT) experts, including Bill Gates, to discuss and innovation,” says Linda Rottenberg, CEO of Endeavor.how ICT enables competitiveness, the GCF grew through the financial crisis In 1997, Rottenberg co-founded Endeavor with the goal of makingto tackle the world’s most important competitiveness issues. Its mission is emerging market countries more competitive on the global stage byto foster awareness and enthusiasm around the issue of competitiveness, increasing the competitiveness of its highest-potential businesses. “I’mand to evaluate the applicability of competitiveness theory and practice as pleased with the results,” she says, “but as I often say, we’re just gettinga tool for generating real solutions to contemporary global challenges. started.” The 2011 GCF programme continues to be the only event of its kind, She explains how emerging markets are becoming the future ofhosting global business leaders, international political leaders and selected innovation. “In general, the most innovative and potentially path-intellectuals and journalists to create a dialogue about the positive impact breaking business ideas do not come from large, established companies,organisational and national competitiveness can have on local, regional nor from microenterprises. They come from dynamic, high-growthand global economic and social development.  SMEs [small and medium enterprises] that Endeavor identifies as ‘High- Panels with topics that address the link between innovation and Impact Entrepreneurs’.competitiveness this year include: an Oxford-style debate about the “On a national scale, these entrepreneurs are the ones that can generatemerits and successes of the Kingdom’s 10 x 10 programme; innovations in wealth, create high-value jobs, serve as role models and set into motion ahealthcare and education as well as forums that address the relationship culture of investment and economic growth. Identifying and supporting022
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  18. 18. ceO inDusTry His conclusions are based on the rising importance of advancement in “i’m confidenT communication technology. “Looking back at the last decade, it is difficult ThaT The gcc/ to ignore the internet revolution and its dramatic impact on reducing mena region information costs,” Gadhia says. “This has transformed the nature of is Poised for many sections of the economy, particularly through increases in labour a similar productivity. However this is still largely a Western world phenomenon. TrajecTory. “In the next decade, the growth markets of Asia, Africa and Latin jusT look aT America will also see more of the benefits of a fully connected world. This makTooB, The should further accelerate their progress and open up new possibilities. araBic online The coming decade will also see more emphasis placed on sustainability PorTal BoughT – and not just one-off gains in competitiveness.” By yahoo! lasT Gadhia elaborates: “Wearing my other hat in the financial services year. now sector, the productivity gains of information technology have effectively enTrePreneurs made the world smaller, and also made talent more global and accessible. from amman Offshoring and outsourcing are two manifestations of this. This trend To riyadh are should lead to greater efficiency for the financial services industry and saying: ‘i wanT help improve end-customer service, but it will also lead to the challenge To Be The nexT of managing a more complex and content rich system. Technology is makTooB’, and also breaking down the traditional distinctions between producers and an invesTor consumers, with the latter increasingly participating in the former.” communiTy is already Taking Jim Turley, CEO of Ernst & Young, has recently led cutting edge research rooT.” CourTeSy of eNDeAvor to better understand competition and market growth. “We found that competitive companies tended to be significantly ahead in some linda roTTenBerg, important areas. They were making the most of potential opportunities ceo of endeavor by prioritising markets, broadening their product offering around current clients and reinforcing brand awareness,” he says. “Importantly, they were agile – focused on getting to market quicker, making their supply chains more flexible and staying focused onthese ‘High-Impact Entrepreneurs’ is one of the best ways to foster innovation. And in today’s dynamic, globalised market I think that’sinnovation and contribute to the competitiveness of emerging markets – crucial to growth.and for that matter all countries – on the world stage.” “They were also cost competitive, sustaining cost reduction efforts and Rottenberg is optimistic about their future. “I’m confident that the GCC/ optimising capital wherever possible,” he continues. “And, finally, theyMENA region is poised for a similar trajectory. Just look at Maktoob, the were taking the time to build strong relationships with their stakeholders.Arabic online portal bought by Yahoo! last year. Now entrepreneurs from In my view, being competitive in today’s world is about focusing in onAmman to Riyadh are saying: ‘I want to be the next Maktoob’, and an these four areas – and doing better in each of them than your peers.”investor community is already taking root.” Turley also agrees that innovation is a crucial part of global One of Endeavor’s innovations is its “Search and Selection” process. competitiveness. “In developed markets and mature companies,“We’ve always believed that transformation comes from being selective; innovation is crucial to competing for growth in a tough and constantlyso rather than supporting every entrepreneur, we’ve set up a system for changing global market. It’s really easy for larger, more establishedvetting the highest-growth, most competitive businesses, believing that companies to lose their entrepreneurial spark and become rigid andthey hold the key to making economies as a whole more competitive. hierarchical.In 13 years, Endeavor has screened more than 22,000 candidates andselected 555 High-Impact Entrepreneurs,” Rottenberg says. “in develoPed markeTsJitesh Gadhia, a trustee of the National Endowment for Science, and maTureTechnology and the Arts (NESTA), which promotes innovation in comPanies,Britain, as well as a senior managing director of the Blackstone Group, innovaTionsays: “The technical economic definition of competitiveness probably is crucial Totends to focus more on comparative measures and relative advantages of comPeTing forfirms, industries and nation, [but] the over-riding test of competitiveness growTh in ais the capacity to create wealth on a sustainable basis.” Tough and NESTA’s research shows how innovation plays a key role in global consTanTlycompetitiveness. “NESTA’s Innovation Index found that 67 per cent of changingnational productivity increase in the last decade in Britain arose from gloBalinnovation. A similar pattern is likely to apply to other economies. markeT.”Without the productivity gains innovation brings, countries will not CourTeSy of erNST & youNgbe able to compete effectively. Innovation is the fuel which powers jim Turley,competitiveness,” Gadhia says. ceo of ernsT & young024
  19. 19. CourTeSy of DISNey THinK WOrlD evenT Tom Albanese, CEO of Rio Tinto. “So it’s important that even large companies promote an internal culture Andy Bird, COO of Disney, has embraced a nuanced understanding of innovation or ‘intrapreneurship’. The companies that get it right, I of competitiveness to ensure the company’s future success. “For me, think, have the best of both worlds. They have great resources behind the definition of competitiveness can be interpreted in two ways: in them as well as a vast internal talent pool to supply entrepreneurial ideas.” competition and the desire to win; and in economic terms, the ability Ernst & Young also found that market variation has increased. “Today you to sell and supply goods and/or services in a given market. What is can start global, you don’t really need a single home market, and you can important in both definitions is the need for relevance, quality and source capital, products and people from an array of places,” Turley says. innovation,” he explains. “At the same time, competition is fierce, can come from anywhere “In order to stay relevant, a company and its products need to and even established players can be disrupted. Our research found that constantly look to innovation and in today’s world, consumerism moves companies across all sectors and markets are expecting the new economy at an increasingly rapid rate. Unless you are constantly looking forward, to be even more competitive than the old economy over the next two years. you run the risk of being left behind – of becoming less relevant.” “We’re seeing two or three-speed recoveries within developed or For Disney, this leadership philosophy has been crucial to growth. emerging economies and in many sectors old purchasing patterns are “Innovation is at the heart of the Walt Disney Company,” Bird says. “Walt under pressure from demographic or economic shifts. We’ve also found himself was a great innovator, creating the world’s first synchronised that supply chains are being pressured by volatile markets and shorter sound cartoon with Steamboat Willy in 1928; the first Technicolor product cycles as innovation is increased. cartoon in 1932; the first feature length animation with Snow White  in “Companies are feeling pressure on margins as appetite for price 1937; and the first theme park with Disneyland in 1955. increases remains diminished. And stakeholders are demanding more “To This day, “To this day, innovation and creativity are at the heart of what we transparency and improved governance,” he continues. innovaTion and do. You can see examples of this today in everything from the technology “One of the most important innovations for Ernst & Young is the creaTiviTy are used by Pixar in Toy Story 3 to the new attractions in any one of our work that we’ve done over the past decade to become the most globally aT The hearT of theme parks to the various ways consumers can enjoy our films and integrated organisation in our profession – in our mindset, structure and whaT we do.” television programmes.” actions. We’ve got a new mix of cultures and different styles of working, thinking and communicating than, say, even 10 years ago – because andy Bird, Tom Albanese, CEO of British-Australian mining firm Rio Tinto, we’re more global and because a high proportion of our workforce are coo of disney suggests: “Competitiveness is the dynamic interaction of competitive generation Y. rivalry between existing suppliers, the threat of new market entrants, “Anticipating these shifts, we’ve worked hard over the years to embed bargaining leverage of buyers, power of suppliers and the threat of an inclusive culture that’s focused around high levels of personal substitute products.” He also maintains that global competitiveness is engagement and development – a culture that means everyone has the accelerated by innovation and technology because it “enables suppliers to same opportunities, whatever their background, to build a great career lower production costs and potentially unlock new resources, which will from day one. That’s something I’m really proud of.” enhance competitiveness”. 025
  20. 20. ceO inDusTry techniques. “Innovation plays an important role in creating culturally “innovaTion Plays and contextually appropriate strategies for scaling up and scaling out an imPorTanT in any particular country, which ensures sustainable growth and global role in creaTing competitiveness,” Zhou says. “Building a philanthropic platform, the One culTurally and Foundation brings together resources from the non-profit, government, conTexTually business and academia to answer the social challenges.” aPProPriaTe This approach allows for a lasting and permanent positive impact sTraTegies for in communities that need it the most. “Last year, the One Foundation scaling uP and partnered with the China Merchants Bank to issue a debit and a credit scaling ouT in card that have all the financial functions, but are the first ones in China any ParTicular to use donation amounts as the credit upgrade standard,” Zhou states. counTry, “Cardholders can choose to donate a certain amount of money to the One which ensures Foundation every month, and when they use the card, some contracted susTainaBle merchants will donate a certain amount of money to the One Foundation growTh with each purchase.” and gloBal  In June last year, the One Foundation set up the Philanthropy Institute comPeTiTiveness.” with the Beijing Normal University, the first of its kind to offer higher education in philanthropy. While it was established by a non-profit amy zhou, foundation and a university, its board consists of outstanding Chinese TrusTee and execuTive entrepreneurs, such as the chairman of Alibaba, Jack Ma, and its director chairman of one is a former head of the Ministry of Civil Affairs. The Institute marks the foundaTion start of the official philanthropy education in China. Michael Strong, co-founder of the US-based FLOW, an emerging movement dedicated to liberating the entrepreneurial spirit for good, CourTeSy of oNe fouNDATIoN emphasises that innovation does not only mean advancements in technology. “Precisely because the most effective approach to competitiveness is to identify and serve an under-served niche, it’s a mistake to focus exclusively on technological innovation while ignoring other forms of innovation,” he says. “After technological innovation, there is widespread awareness of the importance of innovation in business strategy and According to Albanese, this enhanced competitiveness has shifted in marketing strategy, and there remain countless opportunities there withthe last decade. He says that in the past 10 years “competitiveness tended respect to the identification and exploitation of niches.”  to focus more on OECD markets. In the next decade, there will be much Strong explains that what lies ahead for innovation requires thegreater focus on developing markets including China, India, Russia, development and utilistion of creativity and thought. “The next frontierBrazil and South East Asia”. for innovation is the world of cultures, ideas and branding. The 21st-  At Rio Tinto, innovation is most clearly illustrated by their “Mine of century economy will be the experience economy, in which developedthe Future” programme. “It utilises next generation technologies to allow world consumers will increasingly be seeking rich, valuable experiences,for smarter mining, resulting in greater efficiency and lower production and an increasing percentage of the world’s population will count ascosts as well as improved employee health, safety and environmental developed,” he says.performance,” Albanese says. “Thus we are seeing the growth of ‘meaning as the new luxury’, the growth of the ‘cultural creative’ demographic and conscious capitalism.gloBal ProsPeriTy: Thinking Beyond The Thus firms seeking to focus on innovation should include but transcendBusiness of innovaTion and comPeTiTiveness innovation in technology, strategy and marketing to focus increasinglyThe inexorable link between innovation and competitiveness can also be on deep innovations in creating conscious capitalist companies thatunderstood by looking at ideas from those who lead and develop not-for- incorporate meaning and purpose into their corporate DNA and therebyprofit organisations and NGOs. obtain a sustainable competitive edge as an increasing percentage of the Amy Zhou, trustee and executive chairman of the China-based world’s consumers demand meaning and purpose in the products andOne Foundation, understands how competitiveness works in dynamic services that they purchase.”ways. “Recently organisations’ competitive edge has shifted focus from To accelerate its goals, FLOW “has focused on integrating the worlds oftechnology and the upper and middle parts of the pyramid to the creation humanitarianism and business in new ways that have allowed us to defineof better human capital through training and education, which tends to and lead the growing conscious capitalism movement and the Peaceopen up a blue ocean marketplace at the bottom of the pyramid level,” through Commerce movement while also nurturing numerous specificshe says. “As this happens, minorities’ interests will become increasingly innovations, such as the entrepreneurial creation of legal systems forimportant and a new type of venture capitalism with new forms of the sake of poverty alleviation [to promote both peace and prosperity].philanthropy will be created.”   In each case, we have sought to identify niches at the intersection of The One Foundation is able to achieve its international philanthropic humanitarianism and business, which are not currently being served bygoals using state-of-the art technology and community-building existing organisations.”026

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