Vision 2020: What the Expo Means For Dubai
The World Expo is a six-month event that takes place every five years, in a different country each time. These events attract millions of visitors who explore and discover pavilions, exhibitions and cultural events staged by hundreds of participants – including nations, international organisations, and businesses.
Inaugurated in 1851, the Great Exhibition was first organized in London. Since then, it has been the hallmark of a world aspiring to strengthen its connections, celebrate cultural diversity, and marvel at technological wonders from every corner of the globe. The World Expo is also a catalyst for economic, cultural and social transformation and generates important legacies for the host city and nation.
The 2020 Expo is slated to be hosted in Dubai, on a giant yet-to-be-built 438-hectare site at the edge of the city. Economists and analysts believe it will translate into a lot of positive change, not just for the city’s economy, but for the Middle East, North Africa and South Asia (MENASA) region as a whole.
What the Expo 2020 Means for Dubai
Effects on Dubai’s economy
Dubai is preparing to receive 25 to 30 million visitors when it hosts the Expo in four years’ time. About 70% of these visitors would be international, traveling in to Dubai.
Hosting the event is expected to add at least 1.5 percentage points per year to Dubai’s real gross domestic product (GDP) growth over 2014-2020, leading to an annual growth rate of 5.5%. Besides attracting more expatriates and driving the GDP, it is expected to boost employment and growth in the private sector.
Deutsche Bank estimates Dubai will require AED 158 billion (US $43 billion) to upgrade its infrastructure for the Expo. The official figures already show Expo-related spending of US $24 billion from 2014 to 2020, according to Garbis Iradian, Deputy Director of Institute of International Finance, a Washington-based association of 450 global banks and financial institutions.
Education institutes in Dubai plan to set up new campuses to meet the needs of the Expo. For example, the Emirates Aviation College has transformed from a college to a full-fledged university (the Emirates Aviation University) with a brand new campus. Other education institutes are bolstering their program offerings to invigorate students with skills required for the Expo. Heriot-Watt University in Dubai plans to offer six PhD scholarships worth DHS 1 million to encourage research in the School of Built Environment, School of Engineering and Physical Science, School of Management and Languages.
To prepare for the Expo, private and public sector stakeholders have banded together to manage the sheer volume of resources that an event of this scale can consume and generate. Some projects already underway include Mohammad Bin Rashid Al Maktoum Solar Park, Dubai Canal Project, Mohammad Bin Rashid City, as well as the main venue for Expo 2020 located next to Dubai World Central.
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Impact on the job market
In addition to attracting talent to the region, a study by Standard Chartered estimates that around 300,000 direct jobs will be created between 2013 and 2021. The MEED report forecasts that for every Expo employee, around 60 additional jobs will be sustained in the wider economy, estimated to add up to around a million indirect jobs. A report commissioned by the Federal Authority of Human Resources (FAHR) found that hosting Expo 2020 will benefit five key industries:
While 90% of the jobs expected to be created from 2018 to 2021 will be in the travel and tourism sector, the Expo will also sprout careers in media and advertising. Skills in customer service, engineering, architecture, urban planning, and infrastructure development will be in high demand during the preparation for the Expo. HSBC estimates that about 45,000 new hotel rooms will be needed for the event, increasing supply by about 6.4% every year until 2020 – at a cost of more than AED 31 billion (US $8.4 billion). Bank of America Merrill Lynch research enumerates 80,000 new jobs will be created in Dubai’s construction sector alone.
The telecommunication sector, along with Information Technology (IT) and transportation, will profit due to higher demand from international visitors. The Expo’s commitment to deliver world-class transport infrastructure to the venue will result in civil engineering opportunities for development growth around newly-created transport hubs. This boom in the job market will help raise the overall standard of companies’ workforce, leading to greater productivity and better quality of output.
Martin McGuigan, head of reward consulting at Aon Hewitt Middle East, said that with the Expo causing a predicted rise in living costs, employers should expect the current annual salary increase of approximately 5% to rise further.
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New opportunities for Dubai
- Small and medium business
Typically, the World Expo attracts hordes of tourists to the host cities. Aside from spending money on travel to the country, the guests also dine, sojourn and shop. These generate opportunities for businesses. Analysts predict growth in entrepreneurial businesses and the mushrooming of small and medium-sized businesses. Small enterprises in Dubai stand on the cusp of a DHS 90 billion (US $24 billion) windfall from Expo 2020, according to the chief economist of the Dubai Economic Department.
- Real estate & construction
For the real estate sector, Expo 2020 shall bring with it considerable opportunities in terms of commercial and leisure investment and development. Additionally, it would help secure the completion of many stalled projects that have struggled to get off the ground following the financial crisis.
- Energy sector
In order to cater to around 25 million visitors, Dubai will need to produce more electricity, and reduce energy loss. By 2020, Dubai’s electricity consumption is expected to reach 9.6 gigawatt – a 50% jump from 2012 levels. To meet these demands, Dubai Electricity and Water Authority (Dewa) will lead three major expansion projects worth DHS 20 billion (US $5.5 billion) to enhance Dewa’s power generation capacity. By 2030, Dubai also aims to have diversified its fuel mix by adding new energy sources such as 12% from clean coal, 5% from renewable energy including solar power, 12% from nuclear power, and 71% from gas.
As industries such as construction, infrastructure, real estate, hospitality, travel and tourism gear up, they will also look at investing in outsourcing solutions that are cost-effective and efficient.
New infrastructure created for the Expo will have many uses, post-event. The future development of the Dubai World Central (DWC) area will regenerate and reaccelerate after the Expo, becoming a sustainable trading hub of the region. It will result in immediate sustainable development across commercial, residential, hospitality and retail sectors, increasing job opportunities in Dubai. The projected population increase in the region will create opportunities for companies to invest and strengthen their businesses for the future.
Helal Saeed Al Merri, Director General of the Dubai Department of Tourism and Commerce Marketing (DDTCM) and a key figure in Dubai’s bid for the Expo, speculated on further developments across the country’s roads, bridges, airports, transportation, and hospitality to cope with the size of growth the UAE will witness by 2020. Dubai will be more accessible to more people, linked to more destinations, and 200 more aircrafts will be added to the Emirates Airlines’ fleet by then.
The Dubai Expo 2020 is a game-changer. By involving stakeholders and pushing growth at every level, from planning and logistics to execution of the event, Dubai plans to deliver world-class standards at Expo 2020.
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