Why ‘Learning from the Future’ Matters for the Middle East
Nicholas Davis, Associate Director, Scenario Planning Team, Global Leadership Fellow & Daniel Davies, Former Associate Director, Middle East, Global Leadership Fellow

It seems that futurology is becoming fashionable amongst global leaders. At the World Economic Forum’s Annual Meeting in Davos this year, the world’s top CEOs and public figures flocked to sessions on scenarios, forecasting and global risks. This trend is supported by recent survey data: An EIU survey reveals that 66% of businesses say they use scenario planning on either a regular or ad-hoc basis, while a majority of executives surveyed by McKinsey “agree that global trends have become more or much more important to corporate strategy over the past five years”.

It is easy for businesses and governments to get caught up in the management of day to day issues, and to take the eye off the ball when it comes to thinking about the long-term, particularly in fast-moving environments. However, good strategic thinking embraces uncertainty and risk, both long and short term, as a fundamental part of the process of preparing for the future. In the Middle East, where high oil prices have taken the pressure off annual national budgets and enabled huge investment programmes, it is more important than ever to understand the value of “taking the long view”. In a world characterised by constant and rapid change, the Middle East needs to take its destiny into its own hands, while at the same time understanding how its development path will be affected by evolving global trends

This year’s World Economic Forum on the Middle East, will take place in Sharm El Sheikh on 18-20 May, with “Learning from the Future” as its theme. The intention is to place long-term thinking at the heart of the region’s agenda for 2008 and beyond. The 1200 gathered leaders participating in the summit will explore the impact on the Middle East of three global scenarios for 2025. The scenarios, entitled a Hyperlinked World, a Sustainable World, and a Multipolar World, have been designed to extend existing trends into the long-term, and expose what needs to be done today to prepare the Middle East optimally for an uncertain future. Our initial findings suggest that countries in the region need to focus a great deal more on emerging risks and opportunities. By using a scenario format, we hope to immerse leaders in three plausible but challenging worlds and help them to consider how the trends we see today could dramatically change the Middle East in 2025.

The Hyperlinked World is marked by a step-change in the breadth and depth of globalisation. Advancements in physical and technological infrastructure cause communication costs to drop sharply across the world, leading to surprising advances in the degree of interconnectedness between people, businesses and governments. The result is a global order governed by networks, communities and interest groups. Workers are highly mobile and specialised in their skills, businesses are nimble and horizontally integrated, and governments are small, decentralized and increasingly irrelevant. The priorities that emerge for the Middle East in this scenario include a focus on skills development, competitiveness and privatization, as well as a consideration of the impact on governance of “hyperlinked societies” dominated by powerful, open networks and free flowing information.

The Multipolar World, which emerges from the dramatic rise of Asia in general and China in particular, sees the Middle East at the centre of a new world order no longer dominated by the single superpower of the United States. In this world, the region becomes an ideological and geopolitical battleground between various ‘poles’ of power and influence, and benefits from its geographical positioning between West and East. The rise of Asia has taken many by surprise through its phenomenal growth achievements in the last 20 years; it may again surpass expectations in terms of the geopolitical implications of its growing power. If so, the Middle East needs to look carefully at its political alliances and patterns of commerce if it is to reap the optimum benefit from a shifting power balance.

Finally, The Sustainable World of 2025 is one that has woken up to the challenges of climate change, resource shortages and environmental degradation after a series of shocking natural disasters and scientific revelations about the future of the planet. In this scenario, concerned voters overcome industrial lobbies to ensure that sustainability is at the top of the agenda in democratic countries, while strong new regulations are enacted that force businesses to implement, at considerable cost, strict environmental practices globally. Huge investments flow into the development of alternative energies and renewable resources, and consumer attitudes towards consumption start to shift. While this scenario may at first seem like a challenge to the Middle East, it also presents it with major opportunities to invest today’s oil resources in projects that will position the region as tomorrow’s hub for green energy and a global environmental champion.

Scenario thinking is gaining credence as a means of making the uncertainty and complexity in global trends both more tangible and more comprehensible. These scenarios will help governments and businesses to consider consequences of alternative policies, understand the drivers relevant to their strategies, and build consensus around the actions that need to be taken today to deal with “slow burn” (but no less important) issues. We hope that leaders in the Middle East will come to the World Economic Forum next month keen to ‘Learn from the Future’ and start preparing themselves today for the opportunities and challenges that it brings. Without a keen awareness of the way the world is changing around it, the Middle East seems in danger of being left behind and remaining stuck in a cycle of short-termism. However, the possibilities being opened up by today’s massive oil wealth are enormous, and if it can “Learn from the Future” the region’s leaders are well place to define for the Middle East a brighter tomorrow.