Major changes in global demographics in the next 40 years will fundamentally transform the business landscape, as ‘global citizens’ become a powerful force to shape future policies while the middle class in Asia multiplies, said an expert.

“The next 10 years will not resemble the past 10 years. The world is a different place because of the financial crisis. It has created a new set of problems and exposed long standing concerns including global imbalances in exports, credit and consumption," remarked Kito de Boer, director of McKinsey and Company, MEA.

De Boer was delivring a lecture titled ‘The New Normal and the Era of the East’ organised by the Dubai School of Government (DSG). The event was attended by a large number of professionals, industry experts, policy makers and academics.

On the impact of the global crisis, the expert said, "It has accelerated a long running restructuring of the economic order, a shift in power from the West to the East."

The region, de Boer pointed out, will need to create four million new jobs, a near doubling of the current workforce. "On top of that, the average private sector salary needs to be twice as high. If they are to compete with government salaries, the only way to employ this generation of local youth is through the private sector," he stated.

"That means that people need to have the right skills, and the labour productivity must improve dramatically," he added.

De Boer attributed the diversification of GCC economies into manufacturing, industry, real estate, retail and tourism to the need to seize a broader role in the global economy.

While the revenue from oil tripled from $100 billion to $325 billion between 2002 and 2006, the sector saw a relatively modest increase of 74 per cent government investment from $119 billion to $207 billion during the same period.

Funds have been largely redirected towards policy reforms in education and healthcare to support the region’s voluminous youth populace, he added.

According to De Boer, the vision of the Gulf political and business leaders was to build a society that provided broad-based economic prosperity, social well-being and civic participation.

"We applaud the great advances so far but these changes are only a taste of what is to come. It is becoming increasingly clear that the global economy is in transition towards a ‘New Normal’. The economic crisis did not change the reality but accelerated the progress of fundamental trends."

"It is a transition that offers the emerging markets in general, and the Gulf in particular, tremendous opportunities, as well as big challenges," he added.

Dr Tarik Yousef, dean of DSG, pointed out that the business landscape was changing at a phenomenal speed, offering new opportunities and market challenges.

"During his lecture, Kito de Boer presented thought-provoking concepts supported by extensive market research and facts, covering local, regional and international commerce."

"His insights into this complex subject matter have been very well received by the participants, and will serve as a key source for a better understanding of globalization, current market dynamics and accompanying public policies," he observed.

Established in 2005 in cooperation with the Harvard Kennedy School, the DSG is committed to the creation of knowledge and the dissemination of global best practices in the Arab world.-TradeArabia News Service