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$2.5 trillion growth projected for GCC economies: Study

The study employs a novel approach to measure PPI, which takes into account 21st-century elements such as environmental impact, health, innovation, and institutional quality.

$2.5 trillion growth projected for GCC economies: Study
[Source photo: Anvita Gupta/Fast Company Middle East]

The GCC plays a significant role in the global economy, encouraging growth. As the region responds to changing global dynamics, pursues diversification efforts, and grapples with the effects of technological advancements, it’s fascinating to observe how its economy adapts to these shifts and integrates them into strategic planning.

A recent report, “In Search of Productivity: The Next $50 Trillion in the Global Economy”, has revealed promising prospects for the Gulf Cooperation Council (GCC) region.

According to the research conducted by the World Governments Summit in partnership with Strategy& Middle East, GCC countries could experience a significant acceleration in their GDP growth, potentially contributing an impressive $2.5 trillion to their combined economic output over the next decade.

This potential surge, representing an increase from 3.8% to 5.4% in annual GDP growth, relies on harnessing the power of productivity. Traditionally measured by the efficiency of producing goods and services, the study introduces a novel approach that considers essential 21st-century elements such as environmental impact, health, innovation, and the quality of institutions.

The study also emphasizes comprehensive progress. Moving beyond traditional metrics, the PPI incorporates essential factors such as social capital, natural capital, and institutional quality alongside the usual labor, human capital, and innovation measures.

“The potential boost to GCC economic growth from a better understanding of the determinants of productivity is impressive and if its findings are acted upon, this could substantially improve the lives of people in the region over the next decade,” said Chadi Moujaes, partner with Strategy&, part of the PwC network. 

The study also highlights key differences in productivity drivers across different economies. While human and physical capital remains crucial universally, the PPI identifies specific areas for improvement in various contexts. 

For instance, GCC nations should prioritize enhancing human capital (health and education) and natural capital (water, resources, and pollution management) to maximize their growth potential, unlike OECD countries, where addressing inequality is the most significant predictor, followed by physical and human capital investments.

This innovative index aligns with the UN Secretary-General’s “Beyond GDP” movement, highlighting that growth and innovation sources are increasingly interconnected with sustainability and social cohesion. 

The PPI thus emerges as a powerful tool for comprehending future economic prospects and advancing the Sustainable Development Goals and the 2030 Agenda.

The Innovation By Design Summit is in Doha on April 24. Attendance at the summit is by invitation only. Delegates can register here to receive their exclusive invite.

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