Brand Dubai towers over the competition |
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In recent years, Dubai has given world cities a master-class in branding. Dubai Inc's message has reached around the planet through ads, investments and hype.
In the global consciousness, Dubai is now firmly synonymous with the tallest building, best hotels, man-made islands and, most importantly, tax-free income.
Obviously this is no accident, and next month an influential study will say Dubai has the most competitive branding strategy of all world cities.
"The city is known around the world for horse-racing, man-made islands, the world's tallest building and its airport. It takes government strategic planning to fit this together in a way that isn't competing with itself but is still competitive," said Peter Kresl, co-author of the Global Urban Competitiveness Report, seen ahead of publication by Emirates Business.
"Dubai is in a period of rapid development and the government's strategy has been clearly focused. Its created plans around the idea of this being a harbour city and a desert city, and its very focused in maximising the benefits of globalisation."
Strategy, which is one aspect of Kresl's overall study, was found to be the driving force behind Dubai's overall ranking of 36th out of 500 cities.
Unsurprisingly, overall New York ranked as the world's most competitive city, followed by London, Tokyo, Paris and Washington DC. The study ranked 500 cities on their ability to attract and use resources to generate wealth. It measured factors such as income, economic growth, innovation and job creation. But a carefully executed strategy has given Dubai its competitive edge.
Kresl said Dubai had been successful in developing a small set of focused industries, such as sea ports and finance. "The rankings are a static snap-shot of how competitive cities are," he said. "Dubai has strong government strategic planning and it is going to be moving up. It could find itself in the top 20 in the next five or 10 years."
Adam Hopewell, Vice-President for Commercial Development at Abu Dhabi University, said: "With Dubai, it's been a branding awareness exercise. When branding awareness increases around the world so does the equity aspect of branding, in other words, the dollar value."
He said Dubai had implemented the concept of strategic clustering used in Silicon Valley in the United States. The idea is that like-minded companies intentionally group together to produce a flurry of innovation and a spirit of healthy competition. In Silicon Valley's case it was high-tech companies in the US.
"Strategic clustering makes it attractive for companies in a single field to gather together, and with resources being brought en masse it makes it more cost effective. Plus, human capital expands massively. Dubai is like a petri dish - you are watching a city with a grand accelerated growth programme.
"Brand Dubai has been exceptional, but we're now looking forward to Brand Abu Dhabi to step up," Hopewell said.
The competitiveness study also found Dubai's employment to be highly competitive, ranking it 23rd globally. This has meant boom-time for head-hunting firms like Boyden Middle East, which caters exclusively for senior executives searches.
Managing Director Magdy El Zein said: "The pace of development and number of projects underway and in the pipeline is a very exciting prospect for jobs in senior level executive positions.
"Especially given what's happening elsewhere in the world, with the credit crisis and slowdown in economic growth rates in major cities in the US and Europe. People are attracted to jobs in areas where there's a positive trend."
Top executives can reportedly receive 25 per cent higher bonuses in Dubai compared with the US or Europe on average.
But something plaguing Dubai's competitive credentials in the world job market has been the rising cost of living. El Zein said this was putting pressure on executives in junior and middle level positions, who typically don't command the same salaries as their senior counterparts. Online job site Bayt.com found this week that nearly three quarters of UAE residents say their salaries have not kept pace with the soaring cost of living.
Hopewell said another danger is Dubai's strategic cluster model could lead to difficulties in staff retention, given that people are more inclined to jump from job to job, seeing that they are literally surrounded by rival firms. The back drop to this has been solid levels of economic growth, which saw Dubai ranked highly in the competitiveness report.
At a time when UK economic growth has ground to a halt, Dubai posted a GDP growth rate of 14.49 per cent, according to the study.
One London stockbroker said : "The brand of London has taken a hammering because of Northern Rock. I don't think it's terminal but London needs to be on its toes."
The competitiveness report also highlighted that, as well as reaching out across the world, Dubai Inc had been successful in attracting major global players to the Middle East. "It's done very well to get multi-national companies to bring in highly-skilled management," said Kresl.
Dr Henry Azzam, Deutsche BankDeutsche Bank
's Middle East and North Africa CEO, said: "Almost all the international banks have set up in the DIFC now, and in the Middle East it's the easiest place to establish your company headquarters. I expect a lot more multi-national companies to come here in the future."I'm surprised Dubai isn't in the top ten of the rankings. It's a place where neither people nor companies pay tax, so in comparison to other world cities it's very cost effective."
Deutsche BankDeutsche Bank
, Citigroup, UBS and Morgan StanleyMorgan Stanley have all doubled the number of bankers based in the Middle East, to more than 400, this year. In May, Citigroup said it planned to move the co-head of its investment bank from London to Dubai. Meanwhile, in London and New York, banks have announced more than 100,000 jobs cuts in the past year.
Fees earned by securities firms in the Middle East rose five per cent to $612 million (Dh2.24 billion) in the first half of the year, the only part of the world to show growth, according to New York-based research
firm Freeman. The rapid expansion of Dubai's young economy, which according to reports has almost $300bn worth of construction projects underway, is a testament to its shrewd strategic plan. But the emirate is now facing fresh, unforseen challenges, including the menace of inflation and a stumbling stock exchange.
By Ryan Harrison
© Emirates Business 24/7 2008
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