When the Oil Wells Run Dry: The Industry That Can Save Us

This article appeared in Khaleejesque Magazine, INDUSTRIAL Issue, published November, 2015. It is published on this blog with the consent of the author and magazine. All credits and copyrights are reserved to Khaleejesque, 2015. Click here to subscribe to Khaleejesque, or follow them on Instagram @Khaleejesque 

Author: Hashim Bahbahani

Magazine Artwork: Reema Motib

5 min read.

On April 15th, 2015 there was an incredibly important global announcement that went unheeded by the Khaleeji mass media and general population. It was an announcement that could propel a series of life altering implications for every Khaleeji citizen.

The announcement, which was kept secret for months, was made by Tesla Motors CEO and founder Elon Musk. Musk revealed that Tesla had invented and commercialized the Tesla Powerwall, a new “home battery” powered completely by solar panels that could potentially power an entire house for a fraction of what conventional electricity would cost.

The goal of the solar powered home battery is to lessen the demand and reliance on petroleum and gasoline. In other words, with Tesla’s Powerwall, the world is a step closer to needing a lot less oil.

While Tesla’s battery on its own will never be enough to completely wipe out the demand for oil, it does signal the start of a realistic and feasible movement away from gasoline and into other more sustainable energy resources. The thing to remember about technology is that it grows exponentially, and there is no reason why that wouldn’t be the case with alternative energy. In fact, since President Obama took office, the United States “has increased solar electricity generation by more than twenty folds”, according to the White House official website. It is not unfathomable to think that the world could start harnessing alternative energy more efficiently, and almost completely move away from a reliance on oil in the course of the next twenty years. That is not as long away as it seems.

So what happens to our Gulf when our oil is no longer needed – no longer pumped – and all the oil wells dry up?

It is a predictable and daunting scenario. The Arabian Gulf is barren of valuable natural resources. The climate is unbearable, and the current infrastructure is unsustainable without a continuous influx of money and natural energy. Deprived of oil, the economy cannot support the current population.

We could be facing impending socio-economic extinction without even knowing it.

But there is still hope; there is still time.

Beyond investing in alternative energy, the Gulf must look to build an industry that is capable of surviving in a post-oil world; an industry that can vitalize an economy without depending on natural resources. But it also has to be an industry that is considerable and substantial enough to provide economic vitalization to the region.

The only industry that fits into that mold is the software technology industry, or as it is more commonly known “the tech industry.” This industry is built fundamentally on human intelligence. When it comes to developing software, there are no substantial hard assets in play, nor is there any significant reliance on natural resources. The rise of any tech sector is almost purely dependent on the capabilities of the people involved in it.

Undoubtedly, a strong tech sector can invigorate an economy. Today, two of the five highest valued companies in the world are software companies, Google and Microsoft; seven of the top thirty are highly involved in software engineering. In the U.S., the software technology sector provides the highest paying jobs, and consistently beats new employment figures for all other sectors, including oil and gas. Jobs in the tech industry are high in both quality and quantity.

But above all else, there is one factor that makes the tech industry our best bet for economic survival: speed. We, the GCC Nations, need to start realizing that time is no longer on our side. The biggest danger we face today is that we are in voluntary oblivion of the ever accelerating possibility of economic demise. If the demand for oil drops significantly, the ramifications will hit us hard, and they’ll hit us very quickly. Will we wonder at that time how we could’ve been so oblivious to our collective fragility?

Successful technology companies can give rise to a strong tech sector relatively quickly. The nature of software products allows technology tech startups to scale and grow at lightning speed. Take, for example, Uber, the real-time ride request platform. After only six years of existence, Uber has reached a valuation of approximately $50 billion. To put that in perspective, Uber is already bigger than gigantic companies that have been around for decades, like Deutsche Bank, Sony, Phillips, FedEx, and many more. Another example is Google, which, only after sixteen years of existence, employs over 55,000 people, providing those employees with unparalleled pay and benefits. The examples are endless.

If the right steps are taken, there is a real possibility that over the next twenty years the Gulf can transform into a new Silicon Valley and a breeding ground for global tech giants. A Khaleeji tech hub will also attract entrepreneurs to establish their startups in the area, and thus increasing the possibility of more successful tech companies blooming out of the Gulf. The main economic value for the region will come in the tax revenue captured from the financial success of these companies. Another important economic value will be in job creation, as large tech companies can provide high paying jobs at different levels and across a wide variety of specialties.

So what needs to happen for the dream of a Khaleeji Silicon Valley to become a reality? The task of establishing a dynamic tech industry is monumental and complicated. But it is highly possible nonetheless. In broad terms, there are three fundamental steps:

–   The current surplus of money from the oil and gas sector must be invested in building a technological infrastructure – internet and network systems, mobile connectivity, etc – to support software innovation. Additionally, governments must systematically invest in startups that might appear too risky for private investors.

–   Governments must revise rules and regulations surrounding software technology companies and e-commerce to allow companies to scale and grow to their maximum potential without unnecessary barriers.

–   Most importantly, the private and public sector must take a proactive approach towards developing and cultivating software engineering talent. In other words, we need to invest in producing better coders. Remember, the success of any tech sector is mostly reliant on human capabilities and intellect. The best way to produce world-class programmers is to provide Khaleejies interested in coding with the right education and training. It’s simple, but imperative. Recently, I co-founded “Coded”, the first coding academy in the Gulf, with a mission of offering world-class software engineering education to aspiring young men and women in Kuwait. Our hope is that Coded is the first of many local coding schools that aim to cultivate a new generation of topnotch Khaleeji coders.

Today, the Gulf is ripe to be a new global tech hub. There is an abundance of private and public investment funds, high consumer purchasing power, and a plethora of market opportunities. But beyond that, there is an ambitious and daring generation that is passionate about turning their dreams and ideas into reality using technology and software engineering. Investing in that generation is our only true hope.

There is a dark cloud hovering on our Khaleeji horizon, edging ever closer to us. We have willingly chosen to ignore it thus far, unconcerned with the storm it carries within it. But if we act purposefully and quickly, we can prepare ourselves for what’s ahead. And we might – just might – catch a glimpse of a silver lining.

 

This article appeared in Khaleejesque Magazine, INDUSTRIAL Issue, published November, 2015. It is published on this blog with the consent of the author and magazine. All credits and copyrights are reserved to Khaleejesque, 2015. Click here to subscribe to Khaleejesque, or follow them on Instagram @Khaleejesque 

 

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