PwC Middle East develops framework to address megatrend challenge

19 April 2018

The Middle East arm of Big Four advisory firm PwC has developed a new framework to help address what it considers the five long-term global trends set to have a seismic impact on the region, formulated together under the acronym ADAPT.

The world at large has entered a period of profound disruption, from a shifting political and economic landscape to the advent of the digital era, and, according to the Middle East practice of Big Four professional services firm PwC, the region finds itself at the epicenter of five of these historic global trends – which will together reshape the entire Middle East as it is today.

Together with the rising shift in global power and expected technological disruption to just about every facet of life, the firm has cast a further eye on the changing demographics, growing urbanisation and ever-looming issue of climate change unfolding across the globe – banding the greater trends under the acronym ADAPT: assimilation, disruption, age, populism (and) trust.

Such unstoppable forces, beyond the measure of any government to avert alone, present profound challenges for governments and businesses alike – especially in a region already confronting a rapid drop in oil prices, which are now considered unlikely to recover to anywhere near their levels of yore. However, as with most threats, these global megatrends also represent a strategic future opportunity – and through its newly devised ADAPT framework, PwC intends to present a clearer picture of both.It groups today’s pressing issues into 5 categories:Firstly, a word of caution. While the ADAPT framework seeks to illuminate long-term solutions, the firm believes that to successfully address the issues confronting the region will require immediate action. “We do not have the luxury of delaying a response to these challenges. They are not something for another generation to address… The precarious combination of issues facing the Middle East means that both governments and businesses are forced to respond at a scale and with an urgency that is unprecedented.”

With that said, PwC also contends that the old modes of thinking, approaches, and assumptions of the past will no longer provide an effective answer to the fresh forms of disruption – ‘however far-reaching and effective they may have been.’ The landscape, the firm argues, has changed too dramatically. And with the growing levels of urgency, so too the trade-offs between the short and long-term pressures.

The aim of ADPAT is to work through the near-term manifestations of the interacting trends with a mind for future-proofed solutions, bringing together insights into the growing disparity between the wealthy and poor (Asymmetry); the social, political and economic impact of advancing technologies (Disruption); the exploding population and consequent demographic upheaval (Age); the move toward political nationalism (Populism), and; a public breakdown in the confidence of and disconnect with governmental institutions (Trust).

“Challenges and opportunities are so closely intertwined that they can even become interchangeable. And as the Middle East continues to shift and develop at remarkable pace, it must recognise the need to, in the words of Rudyard Kipling, ‘treat those two imposters just the same,’” PwC Middle East Clients and Markets Leader, Stephen Anderson, concludes.


Do consultants have a legitimising effect in the Middle East?

19 April 2019

Do the often kowtowing international consultants operating in the Gulf simply grant legitimacy to local rulers? The answer’s not so simple says regional expert Calvert Jones, who has conducted a fascinating research study on the local consulting industry.

Now valued at $3 billion annually in the GCC alone, the Middle East management consulting industry has exploded since the global financial crisis, growing at a heady 20 percent clip up until 2014 when the dive in global oil prices and attendant austerity measures briefly applied the brakes; ‘brakes’, in this context, meaning growth which at its lowest point in 2015 dropped to around 6 percent.

The slow-down was brief. With the plummet in oil prices spurring regional governments to act on economic diversification – captured in a range of ambitious national transformation agendas – together with the emergence of a range of digital advances now sweeping the public and private sectors, fresh impetus was given to the local consulting market; this year forecast to return to double-digit growth.

Of that $3 billion consultancy price tag – with close to half of it handed over in Saudi Arabia – the public sector accounts for approximately a third of the take, the vast majority of that paid to foreign consultancies and in particular the advisory wings of the Big Four and global strategy giants such as McKinsey and BCG. Scrutiny of these practices – especially in the wake of the Khashoggi killing – has also increased.

Copping much of the media flak, McKinsey for its part has backed itself as a force for good in the region, contributing greatly toward local economic, education and healthcare development. But the question remains, even if making a positive difference, do international consultancies confer legitimacy on authoritarian governments – “helping to prop up and even strengthen repressive, illiberal regimes?”Does the Middle East consulting industry have a legitimising effect?One person well-placed to address that question is Calvert W. Jones, an Assistant Professor in the Department of Government & Politics at the University of Maryland and author of ‘Bedouins into Bourgeois: Remaking Citizens for Globalization’. Jones spent 19 months between 2009 and 2017 conducting field research in the region, including into the consulting industry and the notion of conferred legitimacy.

According to Jones, some of the consultants she interviewed themselves expressed this concern, particularly when due a range of market factors they may have grown less inclined over time to voice too strong of an opinion. Yet, whether this is indeed the case is not so clear. Among other findings and areas of research, Jones conducted several experiments on the subject of legitimacy at universities in Kuwait, involving some 650 students.

“Conventional thinking about experts in politics suggests not only that experts rationalise governmental decision-making, but also that they confer legitimacy – meaning that the public may be more likely to support government initiatives when experts with the relevant knowledge, training, and experience are involved. In the Gulf, both experts and ruling elites tend to think along these technocratic lines,” she states in an article for the Harvard Business Review.


While not addressing potential international legitimacy or other geopolitical or business and trade issues, Jones sought to test the idea of conferred legitimacy as to public opinion in the local polity. For the experiments, she asked participants to imagine that their country’s leaders were launching a major reform to improve either education or infrastructure, exposing them to a variety of mock news articles outlining the likely benefits from the government initiative.

In the first experiment, half of the reports featured reference to a team of top international experts assisting with the hypothetical reform, including their credentials and extensive experience elsewhere, with this detail absent from the remaining half. She found that subjects who read that experts were involved were far less likely to support the reform – indicating the ‘involvement of experts’ may have led to a significant drop in legitimacy. The results, however, are somewhat murky.

In the second experiment, Jones explored the impact of nationality on opinion, with otherwise identical reports on expert-advised infrastructure reform referring to either American, Chinese, or Kuwaiti advisers. She found two surprising results. Support for the reform did not differ significantly whether led by Chinese or Kuwaiti experts, but did however for the American-led reports, with subjects expressing significantly lower support.

The Chinese were also considered far more capable than their American counterparts, which may in itself provide a clue. “It’s not necessarily evidence of profound anti-Americanism, let alone a new love for Chinese experts,” Jones cautions; “Most likely, it reflects Kuwaitis’ longer experience with American experts, which includes their frustration with the lack of progress on various reforms.” The Kuwaitis, she suspects, are just far less familiar with Chinese consultants.

“This experimental evidence raises doubts about the ability of experts to rationalise and legitimise authoritarian rule,” Jones concludes. “Indeed, my research suggests that international experts can actually undermine legitimacy, potentially reducing domestic support for autocrats and weakening their regimes… In my experience, residents of these countries are increasingly critical of their governments paying hefty fees to foreign experts and consultants for little in return.”