Abu Dhabi Industrial Strategy to transform the future of Smart Manufacturing

In an exclusive interview with Energy Connects, His Excellency Rashed Abdulkarim Al Blooshi, Undersecretary of the Abu Dhabi Department of Economic Development, spoke about the recently launched Abu Dhabi Industrial Strategy and what it means for the global manufacturing sector. 

How will the new industrial strategy help businesses manufacture on a larger scale and more competitively?

The Abu Dhabi Industrial Strategy will help businesses manufacture on a larger scale and more competitively by actively boosting support and rolling out a plethora of value-added initiatives through six strategic programmes.

This includes further enhancements to the existing industrial infrastructure and operating environment, and facilitating the highly beneficial Abu Dhabi ecosystem that allows for ease of doing business, with end-to-end integration that promotes localisation of manufacturing, and accelerating business growth through adoption of Industry 4.0 technologies and processes.

The Abu Dhabi Industrial Strategy will support adoption of Industry 4.0 programmes and advanced technologies, leveraged to integrate smart manufacturing, trigger innovation, competitiveness, and reduce waste and emissions across seven targeted manufacturing sectors: chemicals, machinery, electrical, electronics, transportation, food processing, and pharmaceuticals. The Smart Manufacturing Funding Programme and Smart Manufacturing Assessment Index are two initiatives that will support businesses under the Industry 4.0 programme.

Furthermore, the Strategy will ensure the industrial sector continues to develop and evolve its specialised and highly skilled workforce in-line with global and latest trends and advancements, reduce dependence on imports by utilising domestic products, and ensure sustainability measures are in place for manufacturers.

The unwavering commitment of the Government of Abu Dhabi towards the industrial and manufacturing sector is an integral and complementing part of its economic growth and diversification agenda.

How does the strategy support the presence of manufacturers in the local, regional and international markets?

The industrial strategy’s initiatives have been carefully designed to support manufacturers› presence in local markets and facilitate their access to regional and international markets.

For instance, the ecosystem enablement programme will facilitate the growth of a manufacturing environment that allows ease of doing business. The value chain development programme will improve local infrastructure and promote the localisation of manufacturing.

Businesses will also be boosted in their efforts to sell more products locally and internationally through the Abu Dhabi Local Content and Golden List initiatives, that aim to enhance the local supply chain by directing the government’s spending towards locally manufactured products, and giving them priority through an online interactive platform. The Bilateral agreement initiatives seek to pave the way for local products to reach the regional and international markets.

How will the new strategy impact consumers? Will products made locally become more widely available, and offered at better prices?

The Abu Dhabi Industrial Strategy includes initiatives geared towards supporting heightened business productivity that will positively impact consumers. The value chain development programme  and the homegrown supply chain programme, will reduce import dependence by utilising domestic products, boost production rate of locally products.

How were the seven priority sectors selected?

ADIS identified seven priority sub-sectors, these sub-sectors were chosen based on two key parameters: diversification and competitiveness fundamentals that will ensure the future growth prospects. The sub-sectors shortlisting methodology is as follows:

1. Sub Sectors with High Added Value
2. Sub Sectors that mitigate Supply Risk & Self Sufficiency
3. 3. Sub Sectors with High Growth Complexity

How will businesses be supported to transition to a ‘Smart Manufacturing’ model?

Industry 4.0 is one of 6 transformational programs of ADIS. The program consists of 3 main initiatives:

1. 4.0 maturity index measures evaluate the current industry 4.0 maturity levels of existing manufacturing facilities. It helps companies identify business areas where improvements will generate the most value.
2. The Abu Dhabi Competence Centre: This will be a recognised leading centre for best practices in industry 4.0. Abu Dhabi Competence Centre aims to create a collaborative ecosystem that will bring together solution seekers and providers under one roof with an opportunity to understand the manufacturing challenges and co-create solutions.
3. Smart Manufacturing Funding Programme: The programme aims to accelerate the transformation of Abu Dhabi’s industrial sector towards industry 4.0 and achieve sustainable growth in the manufacturing sector.

What opportunities are there for investors to participate in the growth of Abu Dhabi’s industrial sector?

To cement Abu Dhabi’s status as the most competitive industrial hub in the region, the Abu Dhabi Industrial Strategy will help secure future investor opportunities and provide attractive propositions through the combination of Abu Dhabi’s highly beneficial Public-Private Partner business ecosystem and investor-friendly regulations.

The Abu Dhabi Industrial Strategy will also present an array of opportunities for investors to participate in the growth of Abu Dhabi’s industrial sector through value-added initiatives.

The value chain development programme, for example, will enable investors to participate in the development of local infrastructure for end-to-end integration that promotes localisation of manufacturing.

The initiatives include AD Channel Partners incentives to attract Foreign Direct Investment (FDI), Supply Chain Equity Investments Fund and support for industrial funding through off-sets. In turn, these initiatives will help to build the reputation of Abu Dhabi’s industrial park and products, in addition to boosting cost-competitiveness and predictability for attracting investments through domestic direct investment (DDI) and FDI.

What are the benefits of a circular economy?

Circular Economy is identified as one of the pillars of the Abu Dhabi Industrial Strategy. Each of these pillars are inter-dependent.

The introduction of the circular economy framework will protect resources and the natural environment, thereby reducing waste, cutting emissions, reusing and recycling resources, and lengthening product lifespans. A circular economy also drives innovation, bridges sustainability barriers, and enables Public Private Partnerships (PPPs).

More specifically, the implementation of a circular economy model and applying it in conjunction with the other ADIS pillars will bring about significant benefits, such as:

• Ensuring product circularity resulting in the creation of an upstream-downstream value chain and attract investments
• Reducing wastages in raw materials through design modifications, reducing imports by adopting Industry 4.0, potential savings on import duty exemptions.
• Availability of recovered material/ recycled products-helps in import substitution, import reduction and potential savings on import duty exemptions.
• Reducing the stress on the existing landfills, thereby providing associated economic benefits to the emirate of Abu Dhabi
• Helps Abu Dhabi achieve its commitments to international conventions and establishes the emirate as a responsible manufacturing destination

Consequently, a circular economy will boost industrial growth in-line with the Abu Dhabi Industrial Strategy’s vision to establish the Emirate as the region’s most competitive industrial hub.

There are also a host of social and environmental benefits, such as higher disposable incomes for consumers through reduced costs for products and services; higher satisfaction levels amongst consumers with greater choice; and better quality and improved health through circular food and manufacturing systems, while the environmental impact includes fewer emissions, less waste, and improved preservation of natural resources and nature reserves.

How will Abu Dhabi attract Foreign Direct Investment (FDI) to boost the sector?

Under the Value Chain Development programme, the value-added Abu Dhabi Channel Partners initiative will incentivise FDIs through tailored packages for investors. Furthermore, besides its well-developed infrastructure, global connectivity and business-friendliness aspects making it a logical destination for global manufacturers, Abu Dhabi’s prized business ecosystem of Public-Private partners, blended with the social benefits it provides business owners and their families, continue to present a unique proposition for private enterprises, investors and entrepreneurs, thus contributing to the FDIs and the bottom line.

How does this strategy support the UAE’s efforts to diversify the economy?

The Abu Dhabi Industrial Strategy will support the expansion of industrial companies in high growth, future-centric sectors that can help Abu Dhabi increase its contribution to non-oil sector development. Sustained investment in workforce enrichment programmes and other initiatives to catalyse both technological and non-technological innovations will help diversify the economy, as will efforts to attract global talents, innovators, experts, and business disruptors specialising in cutting-edge technologies and services, smart city applications and solutions, digital economy and e-commerce, and green economy.

How does this strategy align with Operation 300bn?

The Abu Dhabi Industrial Strategy is aligned with national goals and commitments relating to ‘Operation 300bn’, including advancing sustainable economic growth, deploying clean energy solutions, driving industrial innovation, and promoting responsible consumption and production.

Operation 300bn aims to raise the industrial sector’s GDP contribution to AED 300 billion by 2031. The industrial sector’s contribution to the GDP is currently AED 133 billion. The strategy will help meet this mandate by increasing the size of, and investment in, the sector. By enhancing ease of doing business, increasing access to financing, and attracting FDI through value-added initiatives, the strategy will double Abu Dhabi’s manufacturing sector from AED 83.5 in 2021 to AED 172 billion, which will contribute to increased industrial sector GDP contributions at the national level and sustainable economic growth.

In line with these long-term plans, Abu Dhabi Industrial Strategy will shape a stronger and more resilient economy of the future that is aligned with ‘Operation 300 bn’. The Strategy will create the ideal conditions for enterprises to emerge and grow, address Abu Dhabi’s expanding industrial productivity goals, secure future investor opportunities, provide growth opportunities to our human capital, boost jobs by creating 13,600 new knowledge based, quality jobs, and help equip the Emirate with full preparedness for evolving market conditions and shifting trends in the future.

Meanwhile, the strategy will support deploying clean energy solutions and drive industrial innovation through the Industry 4.0 programme, as new technologies are integrated across smart manufacturing, spurring innovation and reducing waste and emissions.

Furthermore, the circular economy programme will help to enable responsible production and consumption, as well as economic growth. Under the programme, sustainable policies, evaluation criteria, and incentives will be adopted, whilst a robust circular economy framework for waste, recycling, and consumption will also be created.

How will the industrial strategy support the UAE’s Net Zero 2050 and the National Climate Change Plan 2050 initiatives?

The Abu Dhabi Industrial Strategy is a comprehensive framework aligned with the UAE’s Net Zero by 2050 Strategic Initiative and National Climate Change Plan 2050 initiatives which aim to support climate action. Under the circular economy programme, the strategy will address the causes and impacts of climate change by adopting a smart circular economy that accelerates responsible production and consumption across waste management, parts supply, and manufacturing.

Another key objective of the National Climate Change Plan 2050 is to enhance the UAE’s economic diversification agenda by deploying innovative solutions and measures that generate high added value for emerging industries.

Through a Circular Economy model, the strategy works to reduce the industrial sector’s GHG emission at landfills with a reduction in industrial waste quantities, reduction in overall transportation requirements by making recovered/ recycled material available as raw materials within the industrial sector.