Here are three ways to ride economic volatility to triumph

No matter how you focus the scope — UAE, Arab Gulf, the Middle East, the world — we have shared in economic crisis after economic crisis.

We need not look far to find an individual or a business that is struggling. It is easy to be pessimistic, but I am here to tell you that opportunity lurks and need only be grabbed.

While not easy, riding the moment to triumph is possible.

Here are three ways to find opportunity amid economic volatility.

1. The AI lookout

Branches of artificial intelligence (AI), including machine learning, have enjoyed more fame of late as conversational language models grab headlines. What is well known about these technologies, is their exceptional ability to crunch numbers and make connections in ways that would be impossible for humans.

When it joins forces with the internet of things (IoT) and other advanced, real-time, data-gathering technologies, AI can notice the unnoticeable and predict the unknowable. It can even produce virtual stand-ins for everyday critical assets.

Digital twins can model everything from plant machinery to human workforces to figure out what might happen in the real world if the entire staff fell ill, or a supply chain seized up, or business-critical equipment went offline.

Given enough data, the right tools, and the appropriate assembly of stakeholders – data scientists, operations specialists, and so on – the business can gain valuable insights from digital-twins simulation models. They can watch the future unfold and put contingencies in place that can be initiated at a moment’s notice.

2. Investment over budget trimming

When hurricanes arrive, we huddle in our homes. We do not take a stroll in the squall. It is much the same for any kind of financial crisis. Recessions are a time for saving not spending. Actually, most economists will tell you that this attitude is what turns economic jitters into recessions and recessions into depressions. But, of course, nobody wants to be the first to move.

This reticence is misplaced. If we look at the UAE’s reaction to the pandemic and compare it to other nations, we see great vision on the part of a government who tackled the health issue first and trusted the private sector to rally and innovate around lockdowns.

Emirates Catering, for example, faced with the issue of a drastic reduction in demand, pivoted to investing in a new online business called FoodCraft, where the company used its existing assets to deliver food products to consumers’ doors.

It is hard to evaluate how coasting or remaining in neutral gear hurt businesses, but enough success stories like FoodCraft exist to prompt a rethink of how we treat crises in the digital age.

Some proactive enterprises saw opportunities and took advantage. If we try to imagine an openly competitive sector in which one company performed a similar pivot to Emirates Catering, it is not much of a reach to assume its competitors would be left behind.

When looking back at the pandemic, it is hard to fathom how much digital transformation took place.

Before Covid-19 arrived, I remember streams of consciousness on blogs about how digitisation was accelerating. And yet nothing prepared us for the activity we saw in 2020 and 2021. It was as if the cloud, AI, and a host of other technologies had been made for that crisis alone.

This is not a trivial point because so many lessons were learned during lockdowns about how people and processes needed to be connected by technology and how solutions had the power to address real problems. These lessons are what make the case for investing during a crisis rather than playing it safe. You can do so much more than win new customers and keep them engaged. You can empower your people, allowing you to attract and retain talent and keep them productive.

3. Who dares, wins

As we have established, crises breed opportunities. The history of international commerce is littered with examples of household names like Ford and HP getting their start during lean times. Of course, when we consider the big five tech companies (Facebook, Apple, Alphabet, Microsoft and Amazon) growing their market caps amid an economic downturn, we think of scale and advantage as the deciding factors.

But in Dubai, brands like condiments producer Curious Elephant and clothing label Azuki, which made stylish loungewear for the stay-at-home consumer, emerged during the pandemic as direct propositions to a consumer base that was stuck indoors. The lesson is, we can outgrow a crisis if we are bold.

One way of thinking about being bold is M&A activity. We saw a lot of this regionally during the pandemic, and especially after vaccines were rolled out.

According to PwC, in 2022, 632 M&A deals were closed in the Middle East, with 89 per cent of them taking place in just three countries – the UAE, Saudi Arabia, and Egypt. This is boldness at play and demonstrates clearly that some are not content to tread water.

Opportunities will continue to present themselves this year, PwC reports, describing the Middle East as “a rare global sweet spot for M&A”.

Lemons and lemonade

If it appears like I am saying that recessions are what we make of them, it is because I am. I trust I have illustrated the many avenues for action.

Timidity gets us nowhere in business at the best of times. Why? Because not everyone is timid. If this is true of the general case, why would it be any less valid when a crisis falls upon us?

Crises put people into crisis mode. And for some that means looking for a way to thrive rather than just survive. So, in the tempestuous sea, which are you? A floater or a swimmer?

Mark Ackerman is the area VP for Middle East and Africa at ServiceNow

Read: Middle East CEOs confident about economic growth in 2023, finds PwC survey