The UAE is globe's third most prepared region for organisational change

24 January 2018 5 min. read

The UAE has enhanced its standing as an international leader in planning and contingency preparedness to rank third overall on KPMG’s International Change Readiness Index.

The International Change Readiness Index, compiled by Big Four professional services firm KPMG, measures the internal capacity of countries to respond and adapt to significant changes resulting from both short-term events such as natural disasters and sociopolitical instability in addition to longer-term trends in the economic, technological and social-demographic realms.

Of the 136 countries KPMG analysed across the globe, the UAE ranks as the world’s third-most prepared and adaptable country in terms of change readiness behind only Switzerland and Sweden, strengthening its position by two spots on the previous survey through a concerted effort of proactive planning.

The nation also joins the likes of Sweden, Denmark and the Netherlands as one of only a handful of countries from the previous top twenty to improve its individual scores in the intervening period across the index’s three key capability measures; Enterprise, Government, and People and Civil society, ranking an impressive first and second overall in the former categories and moving up to 17th in the latter.

2017 Change Readiness Index scores and 2015 Change Readiness Index scores

In a further breakdown of the best performers, the UAE is just one of three countries together with Singapore and New Zealand from outside of Northern and Western Europe, and while all top-ten countries are in the ‘high income’ bracket, the UAE is the only one which is considered ‘natural resource rich’ – significant as to the pervasive ‘resource curse’.

In this respect, resource rich nations with an overreliance on a single commodity tend to do poorly when it comes to change readiness due to several factors, including the volatility of commodities prices, a lack of accountability, and a propensity toward conflict.

As a further effect, efforts to diversify can be hampered by the so-called ‘Dutch Curse’, which describes the causal relationship between a rise in the development of one sector having a detrimental impact on another, in this instance, foreign revenues from natural resources driving currency inflation and consequently pricing possible alternative exports out of the market.

Government capability of UAE

Overcoming the potential poisoned chalice of abundant natural resources requires prudent governance and a healthy dose of foresight. Here, as a sub-indicator in the Government Capability category, the UAE ranks as the top nation globally for ‘government strategic planning and horizon scanning’ – achieving a perfect score in the section – while also featuring in the top three nations for its macroeconomic framework, security and food-and-energy security, and in fiscal and budgeting.Government CapabilityWithin the report’s Enterprise Capability pillar, of which the UAE came in at 1st, the country scores a top-five international ranking across almost every sub-indicator bar two (enterprise sustainability and economic openness). These include number one rankings in infrastructure and for its financial sector, along with first-class showings in technology infrastructure, economic diversification, innovation, and in research and development.

While the country performed less well in the People and Civil Society category – in opposition to Switzerland’s top ranking and which can be an effect of a heavy leaning toward state-owned enterprises, it still earned the premier rank in terms of ‘safety nets’, with social safety nets and official development assistance allowing countries to better respond to shocks, and ‘demographics’, indicating an educated, fast-growing working-age population which is able to support the young, old and infirm members of its society.Enterprise capabilityThe glowing report-card provides further validation for the UAE’s ongoing programme of economic diversification and efforts to wind back its reliance on oil, along with granting a tick of approval for a raft of social initiatives being undertaken in line with the country’s ambitious National Agenda and Vision 2021 plans, such the National Volunteer Program for Emergencies, Crises and Disasters, the UAE Food Bank, and the Emirates Charity.

Expo 2020

In addition, over $30 billion has been now been put toward development-related projects for the Expo 2020 event to be held in Dubai, including major civic upgrades to digital and transport infrastructure, while property construction in the UAE’s major cities continues unabated – including the Maker’s District development in Abu Dhabi, which will be led by engineering consulting and design firm Ramboll.

In contrast to the UAE, Qatar has slipped from a 7th placing in 2015 to 19th in the latest index, with lower scores across all key indicators and the nation’s ability to adapt being currently tested by a diplomatic freeze-out from the UAE and fellow GCC member Saudi Arabia – which also dropped in the rankings to 26th.

Saudi Arabia, however, has itself only just recently embarked on an ambitious transformation programme of economic diversification and social-liberalisation, including its recent hiring of strategy management top-dogs The Boston Consulting Group to help the Kingdom with its landmark rollout of cinemas across the country.