Businesses in the Middle East region should adopt an “agile” strategy to mitigate the impact of prolonged low oil prices, coupled with other current challenges arising from the coronavirus pandemic, according to a new analysis.

In its latest report, research and consulting firm Frost & Sullivan identified falling energy prices as one of the top global risks that can adversely impact businesses, societies, economies, cultures and personal lives in the future.

“[The] risk of protracted low oil prices due to muted global demand, a decline in non-oil economic activity due to the lockdown, combined with risks arising from geopolitical dynamics impacts the Middle East region,” said Murali Krishnan, visionary innovation group senior industry analyst at Frost & Sullivan

“Governments and businesses should comprehend the interconnected nature of such risks and adopt future-casting tools and an agile strategy in confronting the same,”Krishnan added.

According to the study, organisations need to focus on many areas to tap into growth opportunities arising from short-term, medium-term and long-term risks.

Short-term risks

Frost & Sullivan said companies must adopt a “privacy-by-design” approach that assumes global regulatory compliance to face the risk of privacy and disinformation.

For the rise of infectious diseases risk, advanced technologies will enable new approaches in the treatment of these diseases, the report said.

As for the water crisis, which is another short-term risk, it can be mitigated by an innovation in agricultural practices, such as vertical farming and optimised crop selection.

Mid-term risks

The research and consulting firm said it believes that the urbanisation stress will trigger a demand for smart solutions, such as intelligent grid control and electrification, smart buildings and smart storage solutions.

To face climate change risks, organisations will invest in buildings with net-zero energy consumption, and greenhouse gas emissions will increase minimally.

Long-term risks

Frost & Sullivan noted that artificial intelligence (AI) can be a strong reason for the polarisation of jobs. However, it said that “investing in collaborative computational capabilities can help allocate an ideal division of tasks between humans and robots based on their distinct capabilities and deployment costs.”

Another long-term risk is the national identity crisis. The report stated that great business opportunities exist in providing digital authentication of e-government services, such as digitisation of birth, marriage and death certificates, passports and driving licenses.

(Writing by Gerard Aoun; editing by Cleofe Maceda)

( gerard.aoun@refinitiv.com )

#OIL #CORONAVIRUS #MIDDLEEAST

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