Is Dubai's competitive advantage sustainable?

260 Pages·2015·7.05 MB·English

Is Dubai’s competitive advantage
sustainable? A study of strategic planning
in Dubai 1996-2010

Ahmad Hassan Al Shaikh

Unpublished PhD thesis deposited in CURVE January 2015

Original citation:
Al Shaikh, A.H. (2012) Is Dubai’s competitive advantage sustainable? A study of strategic
planning in Dubai 1996-2010. Unpublished PhD thesis. Coventry University

Some tables and appendices have been removed due to third party copyright and personal
information. The unabridged version of the thesis can be viewed at the Lanchester Library,
Coventry University.

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright
owners. A copy can be downloaded for personal non-commercial research or study,
without prior permission or charge. This item cannot be reproduced or quoted extensively
from without first obtaining permission in writing from the copyright holder(s). The
content must not be changed in any way or sold commercially in any format or medium
without the formal permission of the copyright holders.

CURVE is the Institutional Repository for Coventry University

http://curve.coventry.ac.uk/open

ABSTRACT
This thesis provides a critical analysis of Dubai’s approach to economic development planning
over the period covered by its first three formalized plans that is 1996 to 2010. Dubai
experienced a period of very rapid economic growth in the ten years before the 2008 global
financial crisis, despite being a small economy with little oil; oil revenues only accounted for 2%
of GDP in 2011. This dissertation analyzes and evaluates how the nature of Dubai’s strategic
planning changed over the period 1996 to 2010 and the factors underpinning those changes.
The thesis also offers an assessment of the potential for Dubai to develop and maintain a
sustainable competitive advantage in the future.
To help evaluate Dubai’s first three formalized economic development plans, this thesis
identifies and discusses a number of theoretical frameworks and concepts to identify key
concepts and relationships between ideas and practice in the field of economic development
planning. In particular, a comparison is drawn between corporate strategic planning and
economic development planning approaches and their relevance to the Dubai context. Given
the blurred boundaries between the state and commerce, both approaches have potential
relevance, at least in part, to Dubai.
Dubai’s economic development plans are set against the historical, political, economic, social
and cultural and context of the Emirate. The plans are analyzed using computer-based text
analytics and summarized in mindmap form. This allows the major themes of the plans to be
compared and progression between the plans to be identified. The plans are analyzed from a
number of perspectives including the role of government, the expected contribution of the
private sector and the role of higher education and research in promoting development.
However, the main area of analysis is the extent to which the plans successfully identify
development paths which will result in sustainable competitive advantage for Dubai.
The thesis also reports on the results of semi-structured interviews with prominent experts.
The interviews provide an important source of evidence and opinions on the successes and
shortcomings of Dubai’s planning and plans and the actions which need to be taken if Dubai is
to achieve its long-term aim of becoming and innovation an innovation driven knowledge-
based economy.
The main conclusions of the research are
i. Dubai will need to strengthen its higher education system to ensure it is fit for purpose
in helping Dubai’s transformation into a knowledge-based economy

Abstraact I I
ii. The need to invest in the systems, structures and institutions which will enable the
state, the private sector and universities and research institutes to generate successful
innovative clusters
iii. The need to lessen the dependency of the Dubai economy on attracting talent from
other countries through raising the education standards of Emiratis.

Keywords: Economic development; competitive advantage; national strategy; Dubai.

Abstraact I II
Acknowledgments
Like any journey in life, PhD research is a journey and an experience by itself, especially when it
is in the field of social science. During the past five years my relationships with others have
moved in many directions and I am thankful to the ones who have provided their support
directly or indirectly and shown me the right direction at each turn of this PhD. I would like to
thank some of the individuals who impacted in completing this dissertation.
Firstly, to the person who I admire and has a positive effect not only on me but also on the
whole nation of UAE and the region, to Sheikh Mohammad bin Rashid Al Maktoum; thank you
for your words of encouragement and positive energy sent to your people and I have to salute
you for bringing out the best of mankind in each one of us.
Secondly, to Professor David Morris, my Director of Studies of this PhD thesis; I appreciate the
way you put your students under pressure for nothing else than to grasp knowledge and learn.
Thank you for showing me the right path and streamlining my thoughts in many areas related
and unrelated to this thesis.
Thirdly, special thanks to my family, my wife and my children, for providing me with
unconditional love, support, encouragement and patience since much of our precious family
time was used for this research. Also, thanks to my father who paved the path for me in life as
he taught me how lateral and multidimensional thinking should be. Finally, to the soul of my
grandfather whom I haven’t seen, from my childhood, on any given night without a book in his
hand and whom embedded in me the importance of seeking and acquiring knowledge.
Fourthly, to Dr. Ayob Badri, a childhood friend, who has been there for me when I felt low and
pushed me to the finishing line. I still remember your words in the first year of my dissertation
“it is just a matter of another few months and you will be done”, he kept saying that even in the
last few months. Thank you for your support and being there for me.
Fifthly, thank you to those who have helped in providing Dubai strategic planning documents
and allowing me to use them which without them this whole thesis would not have been
possible.
Sixthly, to all interviewees thank you for sparing your time and allowing an open discussion
without prejudice, bias or holding back your thoughts.
Finally, thank you to all (mentioned or non-mentioned) for being part of my PhD experience,
journey and dream.

Acknowledgments I III
CONTENTS
Abstract I
Acknowledgments III
Contents IV
List of Tables VIII
List of Figures IX
CHAPTER 1: Introduction 1
1.1 Background to the Thesis 1
1.2 Overall Research Aim 2
1.3 Research Objectives 2
1.4 Research Questions 2
1.5 Scope of the Research 3
1.6 The Researcher 6
1.7 Organization of the Thesis 7
1.8 Contribution to Knowledge 10

CHAPTER 2: Literature Review 11

2.1 Introduction 11
2.2 Sources of Literature Employed 13
2.2.1 Academic Sources 13
2.2.2 Public Reports and Government Publications 13
2.2.3 Commercial Reports and Publications 14
2.2.4 Grey Literature 14
2.2.5 Internet Sources 14
2.3 Strategy: Definitions 14
2.4 Strategic Planning 16
2.4.1 Corporate Strategic Planning 18
2.4.2 Strategic Planning in Public Organizations 19
2.4.3 Strategy Dynamics and Agility 20
2.5 Economic Development Planning 22
2.5.1 Comparing Corporate Strategic Planning and Economic
Development Planning 24
2.6 National Competitiveness 26
2.6.1 Porter’s Stages of Economic Development 29
2.6.2 The Innovation-Driven Economy 32
2.6.3 Economies of Scale and Scope 32
2.7 The Role of the State in Economic Development 35
2.7.1 The Allocation State vs The Production State 36
2.8 The Competitive Advantage of Nations: Porter’s Diamond Model 37
2.8.1 Internal Factor Conditions 38
2.8.2 Firm Strategy, Structure and Rivalry 39
2.8.3 Demand Conditions 39
2.8.4 Related and Supporting Industries 40
2.8.5 The Diamond as a System 40

Contents I IV
2.8.6 External Influences 41
2.8.7 Pressure and Proximity 43
2.9 Clusters 43
2.9.31 Porter and Clusters 45
2.9.42 Knowledge-Based Clusters 46
2.9.53 Cluster Development Policy 49
2.10 Does the Porter Model Work for Dubai? 51
2.11 The Dubai Model of Economic Development 53
2.12 Summary 58

CHAPTER 3: Research Methodology 60

3.1 Introduction 60
3.2 Research Questions 60
3.3 Research Philosophy 61
3.4 Research Design 63
3.5 Mixed Methods Research 64
3.6 Themes-Theory-Evidence 65
3.7 Pragmatism and Research Design 68
3.8 “Quality” in Qualitative Research 69
3.9 Interviews 70
3.9.1 Semi-Structured Interviews 71
3.9.2 Expert Interviews 73
3.9.3 Ethical Considerations 76
3.10 Issues with Interviews 77
3.10.1 Social Desirability Bias 77
3.11 Data Analysis 79
3.11.1 Textual Analysis 80
3.11.2 Document Analysis 81
3.11.3 Text Analytics 86
3.12 Bias and Positionality 88
3.13 Summary 90

CHAPTER 4: Dubai: the context 91

4.1 Introduction 91
4.2 Dubai: A Brief History 92
4.2.1 Dubai and Trade 94
4.3 Political Context 96
4.3.1 Contributions of the Rulers 98
4.3.2 Economic Federation 99
4.4 The Dubai Economy 100
4.4.1 GDP 101
4.4.2 Population 103
4.4.3 Labour, Employment and Wages 104
4.4.4 Dubai and Oil 109
4.4.4.1 The Oil Timeline 110
4.4.4.2 Contribution of Oil to the Economy 110

Contents I V
4.4.5 Foreign Direct Investment (FDI) 111
4.4.6 Commercial Law 112
4.5 The Dubai Brand 113
4.6 Positive Economic Features 114
4.6.1 Strategic Location 114
4.6.2 Openness 115
4.6.3 Political and Economic Stability 116
4.7 Negative Economic Features 117
4.7.1 The Supply of Entrepreneurship 117
4.8 Benchmarking Dubai’s Competitiveness 118
4.9 Summary 119
Annex 4.1: Definition of Competitiveness Indicators 124

CHAPTER 5: Dubai’s Strategic Plans 125

5.1 Introduction 125
5.2 The 1996 Plan 126
5.3 The 2003-2007 Plan 132
5.4 The 2007 Plan 137
5.4.1 The 2020 Economic Strategic Plan 142
5.5 Comparing the Plans 143
5.6 Summary 147

CHAPTER 6: Interview results 148

6.1 Introduction 148
6.2 Preparing for the Interviews 148
6.2.1 Selecting interviewees 149
6.2.2 Interview Questions 151
6.2.3 Pilot Interview 152
6.3 Interviewees 152
6.4 Conducting the Interviews 153
6.4.1 Data Capture 157
6.4.2 Difficulties in the Interview Process 157
6.5 Analyzing the Interviews 158
6.6 Interview Results 159
6.6.1 What Were the Major Steps in the Development
of Dubai’s Economy over the Last Forty Years? 159
6.6.2 What Have Been the Main Drivers of Economic
Activity in Dubai? 161
6.6.3 What do you Think are The Main Elements Contributing
to Dubai’s Competitive Advantage? 162
6.6.4 What Might be the Sources of Dubai’s Competitiveness in
the Future? 165
6.6.5 The Effects of Financial Crisis 167
6.6.6 Have the Dubai Strategic Plans Helped the Economy to Grow? 169
6.6.7 The Planning Process 170

Contents I VI
6.7 Comparisons between sub-groups of interviewees 172
6.8 Summary 175

Annex 6.1 Interview Schedule 179
Annex 6.2 Brief Biographies of Interviewees 181

CHAPTER 7: Conclusion 186

7.1 Introduction 186
7.2 What Conceptual Frameworks are Useful in Understanding the
Potential Future Sources of Sustainable Competitive Advantage
for the Dubai Economy and Strategies for Developing Them? 188
7.3 What are the Current Sources of Sustainable Competitive
Advantage for the Dubai Economy? 192
7.4 What are the Economic, Cultural, Social, Political and Environmental
Drivers for Change in the Dubai Economy? 194
7.5 To What Extent are Current Sources of Competitive Advantage
Likely to be Sustainable in the Future? 198
7.6 What Weaknesses Does the Dubai Economy Exhibit? 202
7.7 What are the Critical Success Factors for the Successful
Future Development of Dubai? 207
7.8 Contribution to knowledge 208
7.9 Limitations of this Research 210
7.10 Alternatives to Porter 210
7.11 Suggestions for Future Research 213
7.12 Final Comments 214

References 216

Contents I VII