GLOBAL ENTERPRISE SURVEY REPORT 2010 – THE GULF
A UNIQUE ANNUAL INSIGHT INTO THE COMPETITIVENESS OF GULF BUSINESSES
AND DEVELOPMENTS IN GLOBALISATION
INSPIRING CONFIDENCE
icaew.com/enterprise
2
Global Enterprise Survey 2010 – Gulf Report Welcome
WELCOME
TO THE ICAEW GLOBAL ENTERPRISE SURVEY REPORT 2010 – THE GULF
The ICAEW Global Enterprise Survey provides a timely,
revealing and unique picture of the opportunities and
challenges that face businesses across the world: the
Gulf, the EU, the US, Asia-Pacific and Africa. It draws
upon the expertise of our members who work at the
heart of business in positions such as chief financial
officers, finance directors and senior management.
A key finding from this year’s ICAEW Global Enterprise Survey is that businesses
in the Gulf are more likely than those in nearly all other global regions, to say
that in the last year their competitiveness has been adversely affected by
changes in access to finance. However, they are also more likely to anticipate
that changes in access to finance will have a positive impact on their business
over the coming year.
Overall, there are many positives for the Gulf region in the ICAEW Global Enterprise
Survey Report 2010, suggesting that Gulf-based businesses are, on the whole, well
placed to exploit fully the emerging global economic recovery. Amanda Line
Regional Director, Middle East
Welcome icaew.com/enterprise
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CONTENTS
EXECUTIVE SUMMARY
5
MAIN FINDINGS
6
Chart 1: Planned annual turnover growth for the next two years
Chart 2: Factors affecting organisations’ competitiveness over past year
Chart 3: Factor expected to have most positive / most negative effect on business over next year
Chart 4: Anticipated impact of globalisation
Chart 5: Main barriers to international expansion (Critical or strong barriers)
Chart 6: How business friendly is your country’s regulatory and taxation environment?
TECHNICAL APPENDIX
12
FURTHER DETAILS
14
4
Global Enterprise Survey Report 2010 – The Gulf Contents
EXECUTIVE SUMMARY
Key findings at a glance
• Over 80% of businesses surveyed in the Gulf are planning turnover growth over
the next two years.
• The growth expectations of businesses in the Gulf have not increased as much
as those in other regions. Among those regions that were included in last
year’s survey, the Gulf is the only one not to show a significant increase in the
proportion planning turnover growth.
• Businesses in the Gulf were more likely than those based in most other regions
to say that their competitiveness had been adversely affected by changes
in access to finance over the past year. But they were more likely than their
counterparts in most other regions to anticipate that changes in access to
finance will have a positive impact on their business over the coming year.
• Businessses in the Gulf are more likely than those in several other regions to feel
that continued globalisation will have a positive effect on their business over
the next five years.
• 70% of businesses in the Gulf say that they plan to expand into, or increase
their market share in, other countries in the next two to three years.
• Most businesses planning to expand are targeting countries close to home,
primarily other countries in the Gulf and Middle East. They are more likely than
businesses in other regions to target Africa.
• Businesses in the Gulf are more likely than those in several other regions to have
a positive view of the regulatory and taxation environment in their country.
Executive Summary icaew.com/enterprise
5
MAIN FINDINGS
Businesses in the Gulf plan growth
Over 80% of businesses surveyed in the Gulf are planning
turnover growth over the next two years (see chart 1).
Around two-thirds are planning growth of 6% or more
a year, and more than 40% are planning growth of 11%
or more, significantly higher than in globally-engaged
businesses in the UK1 and businesses in other EU countries.
CHART 1:
% 100
90
PLANNED ANNUAL TURNOVER GROWTH FOR THE NEXT TWO YEARS
13.1
10.1
14.0
91
12.0
88
14.3
88
16.7
15.0
88
88
84
82
80
76
71
70
70
65
60
60
50
The growth expectations of businesses in the Gulf have not
increased as much as those in other regions. Among those
regions that were also included in last year’s survey, the
Gulf is the only one not to show a significant increase in
the proportion planning turnover growth.
56
51
50
48
46
44
41
40
Any growth
32
Growth of 6%+
30
23
Growth of 11%+
20
8
10
0
11
14
+20 +11 +2 +2
+15 +15 +1 NC
+11 +8 +17 +5
UK globally
engaged (664)
Other EU
(101)
US (96)
12
Asia-Pacific
(390)
12
13
+8 +11 +10 NC
+7 NC +9 -5
Hong Kong
Singapore
Malaysia (237)
Gulf (97)
14
Africa (50)
Growth of 30%+
Average % growth by those
planning to grow turnover
Showing change
since 2009 (+/-)
Base: All responding
In this report we have focused on those UK businesses that are considered globally engaged, as the overall UK sample has been selected in a
different way to the sample for regions outside the UK and globally-engaged UK businesses provide a better comparison with these other regions.
The data for UK businesses is weighted to represent the UK economy by value, whereas the sample for regions outside the UK is based on a random
sample of ICAEW members in those regions. Global engagement is defined as having operations or activities, outsourcing business activities or
functions, selling to customers, making acquisitions or adapting products or services to countries outside their home country.
1
6
Global Enterprise Survey Report 2010 – The Gulf Main Findings
Changes in access to finance have been a
negative influence on the competitiveness
of businesses in the Gulf
Businesses in the Gulf were more likely than businesses in
nearly all other regions to say that their competitiveness
had been adversely affected by changes in access to
finance, with around half reporting this (see chart 2). For
most of the other factors under review, businesses were
split on whether the impact had been negative or positive.
CHART 2:
FACTORS AFFECTING ORGANISATIONS’ COMPETITIVENESS OVER PAST YEAR
NET
Changes in access to finance
51
-40
11
Interest rate changes
Raw material cost changes
23
Oil / petrol cost changes
-11
14
25
Exchange rate movements
16
Energy cost changes
15
Base: All Gulf respondents: 100
Main Findings icaew.com/enterprise
+4
23
National government measures
-40
-6
17
19
-60
-4
23
27
-20
+8
24
0
15
0
20
Positive
Negative
40
%
7
But changes in access to finance are
expected to benefit businesses in the
Gulf next year
Within the region there are some differences of opinion on
what factors will impact competitiveness over the next year.
• Businesses in Dubai are more likely than those in the rest
of the region to expect national government measures to
have a negative impact (22%).
Businesses in the Gulf are more likely than businesses in
most other regions to anticipate that changes in access to
finance will have a positive impact on their business over
the next year (see chart 3).
CHART 3:
• Outside of Dubai, there is a greater expectation that
changes in the cost of oil / petrol will have a positive
impact (28%).
FACTOR EXPECTED TO HAVE MOST POSITIVE /
MOST NEGATIVE EFFECT ON BUSINESS OVER NEXT YEAR
Any effect
%
Changes in access to finance
26
National government measures
12
Oil / petrol cost changes
9
5
5
14
Interest rate changes
7
Exchange rate movements
1
5
Raw material cost changes
Energy cost changes
3
0
1
27
7
26
22
18
13
4
1
10
Most positive
only
18
9
20
Base: All Gulf respondents: 100
Businesses in the Gulf are positive about
the impact of continuing globalisation
Businessses in the Gulf are more likely than globallyengaged businesses in the UK and businesses in other EU
countries and Africa to feel that continued globalisation
will have a positive effect on their business over the next
five years (see chart 4).
8
10
14
4
4
44
9
30
40
Both most
positive &
negative
Most negative
only
50
%
Of those businesses in the Gulf that are of the view that
continued globalisation will have some kind of impact
on their business, half mentioned increased access to
new markets as a positive way in which it would impact
them. But one in four mentioned increased competition
in their main overseas markets as a negative way in which
globalisation would impact them, significantly more than
say this in globally-engaged businesses in the UK and
businesses in the US and Asia-Pacific.
Global Enterprise Survey Report 2010 – The Gulf Main Findings
CHART 4:
ANTICIPATED IMPACT OF GLOBALISATION
UK globally engaged (705)
-3
Other EU (101)
+4
US (100)
5
60
62
7
N/C 3
Asia-Pacific (402)
+4
-8
67
7
+1
72
Positive
Hong Kong / Singapore
/ Malaysia (243)
+2
Gulf (100)
+2
Africa (50)
6
8
76
10
-20
-10
+7
Negative
Showing change
since 2009 (+/-)
60
0
10
20
Base: All respondents
The majority of businesses plan to
enhance their product offering to
compete more effectively in world
markets
Over the next five years, in common with those in most
other regions, a majority of businesses in the Gulf plan to
produce higher value-added products or services, adapt
their products and services to other markets, and increase
the number of countries they sell to. Businesses in the
Gulf states other than Dubai are more likely than those
in globally-engaged businesses in the UK and businesses
in most other global regions to be planning to adapt
products or services to markets in other countries (59%).
Main Findings icaew.com/enterprise
-6
74
30
40
50
60
70
80
%
More than two-thirds of businesses in the
Gulf have international expansion plans
70% of businesses surveyed in the Gulf say that they plan
to expand into, or increase their market share in, other
countries in the next two to three years.
Most of those looking to expand their international presence
are looking close to home in terms of where they plan to
expand or increase market share. Just over half (53%) are
looking to other countries in the Gulf and Middle East – in
particular, Saudi Arabia (23%).
Businesses in the Gulf are more likely than their
counterparts in other regions to nominate Africa as a target
for international expansion (34% compared with less than
10% of businesses in other regions). Around a third are
also interested in the emerging countries of Asia-Pacific,
especially China (19%). India is also a target for some (19%).
9
Administrative, regulatory and legal
considerations and corruption are
most commonly listed as barriers to
international expansion for businesses
in the Gulf
Among those businesses in the Gulf that already have an
international presence or are considering developing one,
the barriers to international expansion are similar to those
experienced by businesses in most other regions (see chart
5). Overall, more than half cite ‘administrative, regulatory
or legal issues’, ‘corruption’ and ‘the existence of effective
legal systems regarding commercial agreements’ as strong
barriers to international expansion. Corruption is seen as
more of an issue for businesses in the Gulf than globallyengaged businesses in the UK and businesses in the US.
CHART 5:
MAIN BARRIERS TO INTERNATIONAL EXPANSION
(Critical or strong barriers)
UK globally
engaged
(558)
%
Other EU
(91)
%
US
(86)
%
Asia-Pacific
(346)
%
Gulf
(86)
%
Administrative, regulatory or legal issues
38
34
55
56
56
Corruption
33
43
34
49
56
The political environment
35
37
41
54
43
Existence of effective legal systems
30
38
38
54
52
Availability of local management
26
27
27
39
29
Skills of local workforce
24
26
26
35
31
Availability of internal resources
24
37
20
36
33
Uncertainty regarding exchange rates
21
20
14
32
17
Access to finance
16
30
19
23
28
Information on markets, competition
20
22
21
33
24
Local staff recruitment
19
18
15
31
27
Language issues
14
10
14
19
13
Cultural differences
16
16
10
23
9
Availability of credit insurance
12
10
5
15
8
Base: All with / considering international operations / activities
10
Global Enterprise Survey Report 2010 – The Gulf Main Findings
Businesses in the Gulf view their
regulatory and taxation environment
as business friendly
Businesses in the Gulf are more likely than globallyengaged businesses in the UK and businesses in the rest of
the EU and Africa to have a positive view of the regulatory
and taxation environment in their country, with around
80% considering it to be business friendly (see chart 6).
CHART 6:
HOW BUSINESS FRIENDLY IS YOUR COUNTRY’S
REGULATORY AND TAXATION ENVIRONMENT?
100
N/C
-6
-5
80
%
60
16
-1
-2
6
10
45
45
52
35
39
10
40
20
57
42
42
38
50
Very
Fairly
0
-20
-60
12
12
-40
18
32
34
+1
+1
UK globally
engaged (705)
Other EU
(101)
8
2
20
8
4
+1
10
7
Not very
28
Not at all
+6
+6
12
Showing change
since 2009 (+/-)
N/C
-80
US
(100)
Asia-Pacific
(402)
Hong Kong
Singapore
Malaysia (243)
Gulf (100)
Africa (50)
No change
Base: All respondents
On most aspects of regulation and taxation, businesses
in the Gulf are more likely to be positive than businesses
in the EU and US. Some aspects of regulation and
taxation are more likely to be seen as a help rather than a
hindrance to their business’s operation and development
– notably, corporate governance requirements, financial
reporting requirements, health and safety regulation and
environment law.
Main Findings icaew.com/enterprise
Businesses in Dubai tend to be less positive than businesses
in the rest of the region on a number of aspects of
regulation and taxation. Just under a third see corporate
governance requirements as a help to their business
compared with over half in the rest of the region.
Businesses in Dubai are more likely to regard health and
safety regulations and planning regulations as a hindrance
compared with businesses in the rest of the region.
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TECHNICAL APPENDIX
This report outlines the key findings for businesses in the Gulf region
represented in the Global Enterprise Survey Report 2010. Businesses in the Gulf
were included for the first time in 2009.
The UK Enterprise Survey is now in its fourteenth year but, with an increasing
focus on the globalisation of world markets, the survey was extended in 2008
to take a broader global view, including interviews with members in other key
global economic regions.
The purpose of the study was to look at the following issues that impact upon
businesses today and comment on any trends emerging:
• business growth, objectives and influences
• the impact of globalisation on business and plans for expansion
• regulatory issues for business.
Between 31 May and 9 July 2010, we conducted 1,000 telephone interviews
with ICAEW members working in business in the UK and 753 with members
working in business in key regions outside the UK.
In the UK we conducted the interviews with a cross-section of ICAEW members
working within industry in the UK. Broad quotas were set to ensure sufficient
response in key sub-cells by region, industry sector and size of business.
The findings of the UK survey were subsequently weighted by company size
(number of employees), industry sector and region so as to represent the UK
profile of businesses by value in the economy (Gross Value Added). All the data
shown in the charts and referenced in the text reflects weighted totals. We have
published the findings in a detailed report: the UK Enterprise Survey Report 2010.
12
Global Enterprise Survey Report 2010 – The Gulf Technical Appendix
In the Global Enterprise Survey report, and where comparisons are made in the
Gulf report, we have focused on those UK companies that are considered
globally engaged1. The overall UK sample was selected in a different way to the
sample for regions outside the UK, and globally-engaged UK businesses provide
a better comparison with these other regions. The data for UK businesses is
weighted to represent the UK economy by value, whereas the sample for
regions outside the UK is based on a random sample of ICAEW members in
those regions. Comparisons should therefore be treated with some caution.
Details of the interviews conducted in businesses outside the UK are
outlined below.
• 100 in the Gulf, comprising 50 in Dubai and 50 elsewhere (other UAE 19,
Bahrain 17, Oman 1, Qatar 5, Saudi Arabia 8): 35 (35%) are in SMEs, 65 in
larger businesses.
• 101 in a spread of other EU countries, representing Belgium (11), Cyprus
(6), Czech Republic (3), France (10), Germany (10), Greece (2), Hungary
(5), Ireland (10), Italy (10), Luxembourg (2), Netherlands (10), Poland (10),
Romania (1), Slovakia (1), Spain (10): 43 (43%) are in SMEs (up to 250
employees), 58 in larger businesses.
• 100 in the US: 36 (36%) are in SMEs, 64 in larger businesses.
• 402 in Asia-Pacific countries: Australasia (80) (Australia 65 and New Zealand
15), China (30), Hong Kong (81), Indonesia (11), Japan (16), Korea (1),
Malaysia (81), Singapore (81), Thailand (16), Vietnam (5): 142 (35%) are in
SMEs, 260 in larger businesses.
• 50 in Africa, representing Botswana (1), Ghana (2), Kenya (10), Mauritius
(10), Nigeria (1), South Africa (20), Tanzania (3), Uganda (1) and Zambia (2):
31 (62%) are in SMEs, 19 in larger businesses.
Members in Australasia, the group of ‘other’2 Asia-Pacific countries and Africa
were included in the survey for the first time this year.
nb Data based on sub-samples of less than 100 should be treated with caution.
1
Global engagement is defined as having operations or activities, outsourcing business activities or
functions, selling to customers, making acquisitions or adapting products or services to countries
outside their home country.
2
Other Asia-Pacific countries include China, Indonesia, Japan, Korea, Thailand and Vietnam.
Technical Appendix icaew.com/enterprise
13
FURTHER DETAILS
For more information or to download a copy of the Global Enterprise Survey Report 2010 – The Gulf
visit icaew.com/enterprise or T +44 (0)20 7920 8667 E [email protected]
GLOBAL ENTERPRISE
SURVEY REPORT 2010
A UNIQUE ANNUAL INSIGHT INTO BUSINESS COMPETITIVENESS
AND GLOBALISATION IN MAJOR ECONOMIC REGIONS
To download a copy of the
Global Enterprise Survey Report 2010
visit icaew.com/enterprise
INSPIRING CONFIDENCE
14
icaew.com/enterprise
Other survey reports available
include: UK; Asia-Pacific; and
UK regional highlights
Global Enterprise Survey Report 2010 – The Gulf Further Details
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