Crossroads of the Silikon Road:

A mixture of fear and outright scepticism greeted China’s announcement of its Belt and Road Initiative in September 2013. 

And while the policy faced notable stumbles and numerous accusations of coercion particularly on the debt side, 13 years on the ‘Rest-ern’ world is largely calibrated along the lines envisioned in that first announcement, greatly to the benefit of the GCC nations.  Moreover, the explosion of highly valuable industrial exports from China, particularly in solar and other renewable power generation, catalysed massive and ongoing power infrastructure investment throughout the GCC.

Today, DEWA (a portfolio company and Dubai’s utility provider) generates 15-17% of its power from solar, and solar represents 21% of its generation capacity.  In fact, DEWA’s first small solar power field came online just weeks after the Belt and Road Initiative announcement.  By 2030, nearly 40% of Dubai’s power will be solar generated, with Abu Dhabi and Saudi Arabia not far behind, and even Qatar and Kuwait increasingly exploring solar generation.  The Mohammed Bin Rashid Al Maktoum Solar Park is easily visible from space and covers an area larger than Manhattan or Miami (see super-imposed image below).  While the design and first phase construction was led by an American firm, subsequent phases have been designed, bid, and led locally, by both Masdar (Abu Dhabi-based), and ACWAPower (listed equity, Saudi Arabia-based.) Crucially, the solar power is generated at one of the lowest costs in the world, thanks to the use of low cost, Chinese-manufactured solar panels. DEWA as a company and the MBR Solar Park as a project exemplify the value creation possible when sitting at the new nexus of the world, and the opportunities for high value energy opportunities in data storage and compute continue to grow alongside this massive power resource.

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Beyond the solar power at MBR Solar Park, and the 25% of the UAE power generated with clean nuclear energy at Barakah Nuclear Power Plant in Abu Dhabi, the Gulf continues to attract human capital at an accelerating pace.  Critically, the capital is increasingly highly skilled, productive, and interested in building careers in the UAE.  Average dwell times for expats continue to rise, private K-12 school admissions become ever more competitive and in the higher education space, increasing restrictions on postgraduates in the US and Europe are driving highly skilled researchers to the UAE.  The UAE is in the early stages of building out a formal program to attract and incentivise research PhD and postdoc talent to relocate with generous support packages, access to world class facilities and critically, computational resources, and a pipeline to monetise their discoveries.  The world class interactions between Russian mathematicians, Chinese engineers, American cardiologists and Indian programmers that made US research universities the hotbed of innovation for the past century are no longer possible to the same degree in Palo Alto or Boston.  Such interactions are increasingly possible and actively encouraged in the UAE, and even in Qatar and Saudi Arabia.  Just as the focal point of global trade has shifted eastward, so too is an increasing share of global research.  Given the GCC’s importance as a node on the new silk road, or silicon/silikon road rather, and as a meeting point in an uneasy geopolitical time, and of course supported by the ample regional capital available for deployment, it’s easy to see why the Expo 2020 anthem “This Is Our Time” still echoes around the GCC 5 years later.

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