Despite current challenges, from geopolitical volatility to the climate crisis, when companies are actively engaged in cost savings and troubleshooting, CEOs in the Middle East are planning for growth and expect a stable or positive economic outlook over the next three to five years. While 20% of CEOs in the region remain optimistic, 40% foresee a stable economic outcome, according to Arthur D. Little’s 2023 CEO Insights study.

“They see opportunity in adversity, looking beyond the current crisis to embrace a more positive future for their companies and wider society,” said Francesco Marsella, Managing Partner and Global Practice Leader, Strategy & Organization at Arthur D. Little.

According to the study, in the Middle East, CEOs are focusing on innovation for future growth – 29% believe the most critical factor in economic growth is technology innovation, which is higher than the global average of 26%. ESG is becoming a full part of the CEO agenda. While they are prioritizing environmental and climate change as a factor in future growth, they are putting less emphasis on diversification and M&A to focus more on new client segments.

Cyber risk is viewed as a key, urgent factor by 13% of CEOS in the region.

In the minds of CEOs, future opportunities are not evenly spread among sectors, with a greater number of companies in certain sectors – healthcare, energy and utilities, travel, and transportation – aiming to achieve above-average growth rates. “In the Middle East, we see good examples of an industry’s moves to improve efficiency and innovation in the travel and transportation industry. The COVID crisis pushed airlines and airports into large-scale efficiency programs to achieve major cost reductions, impacting thousands of jobs. However, at the same time, these companies are forming new partnerships to offer new services to passengers, such as combined intermodal mobility offerings,” said Thomas Kuruvilla, Managing Partner, Arthur D. Little Middle East.

There is a concern across industries regarding access to talent. CEOs struggle to organically attract new capabilities and talents and are focused on acquiring them via headhunters, corporate venture capital, or direct acquisition.

Overall, there will be a moderate need for employee reskilling in the GCC for the telecommunications industry, travel and transportation, and financial services. By comparison, healthcare (25%), manufacturing (33%), and energy and utilities (33%) see the highest volume of reskilling endeavors in the workplace.