MENA has been facing tremendous societal and economic challenges, and there is now an awareness among these countries that they need to diversify their economies and capitalize on new opportunities to survive.
Research by the Business & Sustainable Development Commission underlines that companies pursuing strategies aligned with the United Nation’s 17 Sustainable Global Goals could open up economic opportunities, as the goals are a clear indicator of relevant economic and societal challenges.
Although opportunities differ enormously throughout MENA, the following four key growth markets are expected to have a total value of over $637 billion by 2030:
Resources and energy
This sector is a major market opportunity but is underutilized throughout the region. A current trend engaging with this asset is the rapid roll-out of solar-powered irrigation in some countries, with the triple aim of strengthening water, energy and food security. Morocco, for example, expects to install more than 100,000 solar pumps by 2020. The power of the sun can be used for cooling and energy for transportation, houses, and buildings.
Food and agriculture
Huge progress can be made in these supply chains. Agriculture is currently extremely labor-intensive, but with poor results. By developing circular farming concepts and embracing robotization and digitalization techniques, the unthinkable becomes real. An inspirational example of agricultural innovation comes from Groasis Waterboxx, a planting device created by Dutch flower exporter, Pieter Hoff, that makes growing crops in the desert possible and resource-efficient. It requires 90% less water than traditional growing methods and can be used in some of the most extreme climates on earth. Innovations like these unlock enormous new markets as they make it possible to grow crops where it wasn’t possible before.
In MENA, 75% of all inhabitants will be living in cities by 2050. This provides a tremendous market potential in providing affordable houses, public transportation solutions and energy efficiency for buildings. Relatively simple houses that use the sun for cooling via sun-powered air conditioning and recycled water will be crucial. Air pollution is a growing problem and air cleaning solutions are needed. The Torre de la Especialidades from Mexico cleans the air around it when UV rays from the sunshine on the building. Dubai’s Sustainable City recycles its water and waste and produces more energy than it consumes.
Health & Wellbeing
There will be rapid growth in demand for healthcare in the region over the next 15 years due to the combination of an aging population, a rising consumer class, and the increased prevalence of chronic diseases such as cancer and diabetes as well as obesity which is becoming a major public health issue in the Middle East.
Business solutions addressing these challenges, achieving transformations throughout the supply chain and making use of modern technology and ICT will be worth $133 billion per year by 2030. Technology is crucial to allow solutions at a physical distance. Health insurance, for instance, is one of the largest and fastest-growing lines of business in the Middle East. Microinsurance, which brings affordable insurance to previously unreachable groups through digital, micropayment options, is a business model that is gaining momentum due to the large and currently untapped market. Private sector firms have also devised innovative digital payment methods to encourage more risk pooling. Wider access to mobile and internet services, even in developing and rural areas, are facilitating these digital business models.
The new approaches combine more conventional insurance mechanisms with modern technologies, including digital distribution technology, big data, and blockchain. As of late 2016, mobile insurance start-up BIMA had almost 24 million customers across developing countries in Asia, Africa, and Latin America, which the company charges for monthly rolling insurance through their mobile subscription plans.
The social contract between business and governments needs to be improved and financing options for entrepreneurs need to grow for the region to take advantage of sustainable business opportunities. In the future, it may be that sustainable businesses will grow while non-sustainable businesses struggle as people become more environmentally aware.
Marga Hoek is a global thought-leader on sustainable business, international speaker and the author of The Trillion Dollar Shift.