Industry Talk: Talent and green technology top industry’s 2021 wish-list
David Clifton, vice-president – Business Development, UAE and Northern Gulf, Hill International
“Given the vaccine roll out, but still with current global lockdowns and the economic turmoil that creates (again), the story for the global economy is more aligned to second half recovery (bounce back). Regionally, the effects of the virus have been managed quite tightly and a much more ‘normal’ business environment is starting to emerge, suggesting these economies are likely in a recovery phase when compared to Western Europe, for example.
The industry, as with much of the economy, faces some significant challenges and headwinds in the short term as we await the bounce back to kick in and a level of normality to return to markets. The industry was experiencing a slowing in the region, except for KSA, prior to the start of the pandemic, with challenges in funding and a dial back in certain government level infrastructure spending due to declining oil prices and thus revenue suppression. It is expected governments across the region will utilise a reasonable percentage of their announced stimulus packages to develop countrywide infrastructure developments as one lever to stimulate their economies (a globally common policy in recessions, although some question this in the modern age). Furthermore, on top of stimulus, reduced, although not insignificant, spending has been announced in regional government budgets.
But 2021 will still be difficult in terms of work getting onto the ground and work that does having significant margin pressure before award.
In an industry historically relatively inflexible to how it delivers work, 2020 has been somewhat of a wakeup call. For all the talk of technology, little has really progressed at the same rate as other industry benchmarks, which in turn has kept productivity low. At least a partial embrace of technology had to be found in 2020 to even operate as a business or an industry. I’ve spoken to many architects and engineers about remote working and coordination and that by and large worked successfully. The need for in-person coordination is still there, but people are learning to do more remotely, more efficiently, This does of course pose a risk for developed or high-cost economies as it means that non-client facing roles or those not required to be on site show even greater chance of being off shored to cheaper locations. This has been happening for many years now, but the fact that most of the world had to get used to remote working and coordination suggests it will continue with renewed vigour. Which in turn means that the Gulf may see a diminishing demand for personnel due to the relatively high cost base for staff.
The continued ‘right sizing’ of the business moving forward and general uncertainty around where the bottom of the market is and thus any recovery. The loss of a level of predictability has made the industry issues around workload planning ever more challenging (like many other industries). With stimulus packages not being felt as yet in the sector, there is concern that by the time schemes arrive to market, it might be a little late for some businesses.
Other challenges are now to utilise more technology to build on the experience of 2020. The industry needs to continue to speed up the evolution in the region, which historically has talked promisingly about implementation but only partially adopted new tools and techniques. How to educate and inform team members within the project when rolling out newer technology though will need to be progressive: too much too quickly will largely fail. But massive advances in mindset are now there within the workforce to capitalise on the opportunity to grow efficiency both as individuals and through enhancing technological deployment.
I think in the short term, there is a level of ‘wait and see’ as the situation normalises. Moving on from there, the obvious discussions are maybe around reigniting the Qatar links to the GCC rail network and of course two-way cross border investment between the other GCC nations and Qatar. In practice, this can only be positive in the medium term, although questions will remain around oil prices and government revenues, with the associated ability and / or willingness to invest at home. In the short term, there is also the USA stance towards the region which has yet to be established and will no doubt be a year or more away from being obvious. As opposed to 2016 when the first overseas trip was to Saudi Arabia.”
