Programs - Expo 2020 Dubai
Expo economies, extended legacy with growing returns
Wednesday، October 20، 2021
Expo 2020 Dubai is one of the key global events, being the third largest following the Olympics and the World Cup especially due to its cultural and economic impact. It is a festival of human innovation and a global destination for millions seeking a unique experience in developing human creativity. It connects countries of the world through a single platform, where they present their latest discoveries and inventions, in addition to exchanging ideas, visions and new solutions to the world's most pressing problems. Since its inception, Expo has provided mankind with numerous great inventions, foremost of which are computers, television and hi-tech equipment, as well as the internationalization of some cultural components, such as some types of food and agricultural products that were not familiar to local communities.
The host countries enjoy many benefits that are not only limited to tangible advantages, such as direct economic growth, modernization and development of their infrastructure. There are additional returns involving establishing stronger international relations between the countries concerned, enhancing cultural and diplomatic relations and encouraging knowledge exchange in all areas starting with education all the way to trade.
There are many examples that confirm the difference that the Expo has made to the economies of the host countries. In Montreal, Canada, the Expo 1967 contributed to the high growth rate of the city immediately after the event due to the improvement of the key infrastructure and establishing a modern road network connecting the city. Similarly, the 2010 Shanghai Expo provided China with the opportunity to highlight its city globally and strengthen its international relations by promoting itself as a technologically advanced, forward-looking and globally competitive country.
Such a global and huge opportunity will definitely enhance the presence of the UAE on the international map as a country that seeks to set high standards for a tolerant, inclusive and global society. This comes in addition to the direct impact of this event on the national economy, including small and medium-sized companies in the country. Estimates indicate that Expo 2020 will contribute to attracting foreign investments to the UAE, particularly in key economic sectors, such as financial services, construction, tourism and hospitality. It also provides favorable opportunities for many foreign companies to settle in the country.
Extended Economic Impact
The UAE has a modern infrastructure, highly developed technologies, and strategic visions that support and enhance innovation, which renders it attractive to foreign direct investment. The Dubai Expo will expand investment horizons and increase opportunities for foreign and local entrepreneurship, which will positively impact growth rates and job opportunities.
Dubai has always been an attractive hub for foreign investors. Statistics indicate that despite the COVID-19 epidemic, Dubai has maintained high investor confidence, with estimated total capital inflows of foreign direct investment reaching $24.7 billion in 2020. This is not quite close to a total of $28.6 billion for 2015. Major legislative steps have already been taken to enhance its position and attract foreign investment by amending its laws and introducing new supportive laws, such as the bankruptcy and insolvency law passed in 2016 and the new investment law approved by the state in 2018, which allows 100% foreign ownership in some strategic sectors.
Attracting companies with innovative and creative achievements is one of the key objectives of Expo 2020. Many of these leading companies are expected to settle in the UAE, which will create a more diversified and resilient economy and promote innovative and sustainable solutions. Government sources have reported that the expected returns from this event may reach $33 billion, and attract over $53 billion in foreign investment in several sectors such as real estate, hospitality and tourism.
Drastic changes are also expected to occur in local industries as a result of their adoption of modern technologies, which will give them a wide scope in global markets. This event's endeavors to build and develop new international trade relations provides an opportunity to access effective trade channels and benefit from the new emerging markets in all countries, particularly those of Asia and Africa.
Since the announcement of hosting the event in 2013, positive indicators have begun to emerge on the national economy, including an increase in the Emirates Stock Exchange index by 4%, "the first time since 2008 that the index exceeded 3000 points".
The number of visitors of the exhibition is expected to reach about 25 million tourists, which will contribute to raising occupancy rates in hotels and increase the number of users of transportation and shopping malls. This is in addition to the job opportunities related to the event, which are estimated to be about 200 thousand additional jobs. The country expects a long-term impact of investments, and an increase in the residence of expatriates, which will contribute to enhancing and developing the quality of life and supporting local consumption.
New Investment Trends
To meet 50% of its energy needs, Expo 2020 relied on renewable energy sources (integrated solar and photovoltaic energy sources), as part of promoting ‘sustainability’, which is one of the key objectives of the strategic plans in the UAE. The Expo is expected to provide a favorable opportunity to highlight green initiatives adopted by the UAE, as well as the volume of investment in renewable and sustainable energy, thus attracting entrepreneurs and targeted business owners to invest in green innovation technology. This coincides with the launching of the first nuclear power plant in the Arab world in the UAE, in addition to the availability of solar energy for long hours in most countries in the Middle East, which makes the event an attractive entry point for foreign investors in the region and contributes to drawing more foreign investments in solar and nuclear energy.
Since Expo 2020 is the first of its kind in the region, its anticipated success may provide the opportunity for other countries in the Middle East to become a potential destination to host the World Expo in the future, which will certainly have a significant economic impact on the entire region.
The UAE has never failed to support and motivate entrepreneurs and small businesses at all stages of development. Dubai is even providing further support through the Dubai Future Accelerator, which helps entrepreneurs use the city as a laboratory to create solutions to global challenges in the future.
Initiatives like these over the past few years have translated into tangible benefits for owners of small and medium businesses, since the UAE ranked 21st out of 190 countries in the World Bank’s 2018 Doing Business report. It then jumped to rank 16th in 2020 in the Ease of Doing Business rankings. Furthermore, government-backed accelerators such as Dubai Future Accelerators and StartAd in Abu Dhabi, together with the Khalifa Fund, help create a catalytic system for SMEs to grow and take off.
The huge influx of investments through Expo 2020 is expected to support and enhance these opportunities further, as it provides an unconventional platform for small and medium-sized companies from all countries of the world to grow and launch from the UAE. The huge surge of Expo visitors will also allow start-ups, small and medium enterprises direct communication with the largest number of potential investors and partners who aim to build strategic partnerships, as well as a unique opportunity to enhance communication through an environment where people are open and willing to participate.
Additionally, Expo 2020 will provide business owners with a unique international business platform to market their products to an audience of local, regional and global consumers and investors. Some reports have stated that 80% of those coming to Dubai are expected to have the capacity to enter into networking and cooperative agreements, with the aim of eventually expanding global trade. Nearly 40,000 SMEs from more than 150 countries have been listed on the Expo 2020 market via Internet to participate in and benefit from such an important global event.
Raising the Capabilities of Human Capital
Expo Dubai contributed positively to creating numerous job opportunities for young people. With the opening of offices for participating companies in the UAE in the run-up to the EXPO, additional job opportunities have been created that will continue over the next six to eight months and beyond. The enhanced economic activity is expected to create approximately 300,000 new jobs across the UAE, and to attract an entirely new pool of skills.
Some expect Expo 2020 to have a significant impact on the whole region, as 60 jobs will be created across the MENA region for every job created in the UAE. Altogether, approximately 1 million years of work are expected to be generated between 2013 and 2021, with an approximate average of 50,000 full-time equivalent jobs annually. Since Expo preparations began in 2013, many employees from around the world have been recruited to plan, design, strategize, implement, build and develop the entire environment and infrastructure for Expo 2020 Dubai. According to the official Expo 2020 Dubai website, the event will also produce between 50,000 and 90,000 full-time jobs between 2013 and 2031.
In the same vein, by relying on a large group of volunteers, who are fluent in international languages and who are trained in accordance with international standards to familiarize themselves with social protocols for assisting and guiding visitors, this has contributed to the development of human capital in the UAE and the creation of an organized and trained group of young people with competence and practical experience. After the end of the event, their energy can be directed to new jobs and innovative projects, making them a human asset for future jobs that serve the tourism, trade and entertainment sectors as well as other non-traditional future jobs.
A Temporary Event with Permanent Gain
Key events are usually evaluated based on their long-term gains, as the host country often looks at the benefits that the event can bring and sustain after its conclusion. Based on past experiences, Expos are unique and are unlike other global events, as they usually leave a major impact for the host country that compensates for the resources spent. Such an event allows for the creation of a lasting legacy of the landmarks that have been made, such as the Eiffel Tower (Paris), the Atomium (Brussels), the Space Needle (Seattle), the Unisphere (New York), and the Sun Tower (Osaka).
Considering the amount of investment that has been directed to Dubai Expo 2020 and the resources that have been devoted to its achievement, a future vision for the post-Expo world is expected to be formed with a focus on long-term goals. This is usually carefully planned in order to support the future vision of the UAE, which aims to promote sustainable economic development, and to move towards an innovation-based economy by creating a business environment that directly promotes progress in strategic industries that stimulate economic growth.
To avoid the problems experienced by some previous host countries with underutilized facilities after the event, the Expo infrastructure is designed so that it can be used for other purposes in the future. The infrastructure, touristic attractions, parks and commercial spaces that have been created can be used in the future for other commercial, recreational or residential activities. Improving streets and public transportation will undoubtedly meet the needs of the city in the long term, as the spaces are designed in a way that makes them flexible and versatile, and therefore Expo ‘establishes a lasting legacy because of the landmarks it creates’.