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Abu Dhabi Industrial Development Strategy

Challenge: Abu Dhabi's rapid economic growth over the past few decades has been based on the oil sector. While the oil sector has generated and will continue to generate the resources required to build a modern and successful economy, it is also recognized that the oil sector is dependent on international hydrocarbon markets and prices over which individual producers have limited control. In particular, the volatility of the international oil price makes the achievement of stable and steady economic growth difficult.

Abu Dhabi's Economic Vision 2030 put forth a goal for the non-oil sector to raise its contribution to GDP from 41% in 2005 to 64% by 2030. In order to accomplish this goal, economic diversification with a focus on the manufacturing industry were key priorities.

Solution: To ensure that the industrial sector will contribute fully to the achievement of Abu Dhabi's economic diversification goals by 2030, one of ECG's experts was contracted by the Emirate of Abu Dhabi's Department of Economic Development in 2010 as a key member of a consulting team to articulate a comprehensive and fully integrated, cluster-based medium term (five-year) industrial development strategy for the Emirate.

The objective of the Abu Dhabi Five-Year Industrial Strategy was to provide a focused and coherent framework for industrial planning in the medium term, linking the industrial strategy of the Emirate to the overall Government and departmental strategies. This was achieved via a structured collaborative/consultative process led by the Department of Economic Development and involving all key public and private stakeholders within the industrial sector in the Emirate.

The exercise involved a rigorous and detailed quantitative and qualitative analysis of the current industrial structure of Abu Dhabi, of the policy environment in which the industrial sector operates, and of the current and potential comparative and competitive advantages that the Emirate possesses for industrial development.

Results: The resulting Industrial Development Strategy contained an overall industrial strategy framework for the Emirate and individual development strategies for each of ten focus industries and potential clusters including: aerospace, renewable energies, semiconductors, steel, aluminum, engineered metal products, petrochemicals and plastics products. In addition, it outlined the economic, social, environmental, and regional development impact of the industrial strategy, related enabler requirements, and investment promotion activities to support the focus industries.

This strategy and associated recommended initiatives set the stage for a series of detailed implementation plans for the years 2011 – 2015 for key government and private sector actors, that paves the way for Abu Dhabi to achieve its economic diversification goals.

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