Intersec and Middle East Growth ObservationsBy: John Honovich, Published on Jan 22, 2009
Intersec, the largest Middle East security conference, was held this week in Dubai. This report shares my observations and learning as a speaker and attendee of the conference.
My two central observations:
- Intersec is very large and well executed (compared to other international conferences).
- The Middle East's growth prospects in security are significantly better than the US/UK, however, the region is beginning to feel the impact of global economic meltdown.
As is frequently commented, the Middle East looks to be in better shape than the US and Europe. The impact is clearly not as direct and from the few dozen regional industry leaders I talked to, the issues are not as severe. [Note: I am a novice about the Middle East industry so discount my recommendations and analysis appropriately]
However, it does seem that the Middle East is beginning to be indirectly impacted by the global issues. While it seems that ultimate impact will be significantly less severe than that of the US, a number of signs indicated that the Middle East will have challenges:
- A number of senior sales people in the region told me that they are already seeing projects being slowed down, delayed or canceled. A frequent claim was (1) the drop in oil prices and (2) reduced investment from foreign corporations.
- The longer low gas prices last, the more the Middle East will be impacted. The most common local argument is similar to the US one - that deficit spending will be used to hold the economy up. I am skeptical about well that can maintain the region's historical high growth rates.
- Dubai, specifically, is very sensitive to changes in tourism and foreign consumer spending. I found Dubai to essentially be Las Vegas without the gambling. Huge number of new construction projects with the main economic driver being lavish consumer spending. It appears that Dubai's tourism is heavily driven by Europeans and Russians - two groups that are unlikely to continue to fuel spending.
- It seems very possible to me that the huge growth in new construction could come to an end in the next year, just like in Las Vegas and Miami.
- Even the local press is discussing and acknowledging the impact of the recession. This is interesting given the control that the government has over the press and the strong pressure to keep all press positive.