< PreviousIND USTRY | 40 Vol. 24/01, January 2023 Innovative thinking and putting the planet rst are key for 2023 Sustainability will remain at the centre stage throughout the new year Economic contributor Dubai International Financial Centre (DIFC) will record robust growth for 2023 During , the UAE’s econ- om y perf ormed w ell compared to many countries. A renewed sense of optimism drove strong performance across several sectors, including nancial services. The continuing positive sentiment is re ected in the International Mone- tary Fund’s latest Regional Economic Outlook forecasting a growth of .6 percent for the Middle East and Central Asia region in . Dubai International Financial Centre (DIFC) will record robust growth for , contributing signi - cantly to the UAE’s economy and reaf- rming its position as a major player in the global nancial industry. BY ARIF AMIRI, CEO AT DIFC AUTHORITYarabianbusiness.com 41 If 2022 is any indication, 2023 will be a landmark year for DIFC, and I invite you all to be part of our journey impact measurements, which are in place for every phase of the construc- tion and post-handover. In addition, we have also ensured that DIFC Living, and the expanded Innovation Hub meet not only our own high stan- dards, but are also compliant with LEED standards, the international green building rating system. In 2023, the world’s eyes will be on the UAE as the 28th session of the Conference of Parties (COP28) of the United Nations Framework Conven- tion on Climate Change (UNFCCC) will be hosted in Dubai. DIFC was the rst government entity in the UAE to announce a 12-month programme in the build-up to COP28, which is bring- ing the global nance community and partners, such as the Global Ethical Finance Initiative, together for an important cause – our planet. Our Path to COP28 is well underway and in the new year, the DIFC Academy will be o ering the region’s rst train- ing programme focusing on climate nance. Our commitment to sustain- ability is deep-rooted and is re ected in the various aspects of our opera- tions. For example, in 2019, we created the Dubai Sustainable Finance Work- ing Group, the rst group of its kind aimed at making Dubai the region’s best city for sustainable nance. For 2023 overall, our objective is to ensure that we provide thought leadership and support meaningful change in sustainable nance. We will also continue to focus on expanding our in uence to become the largest ecosystem of financial services, technology and innovation in the region as well as the regional headquarters of choice for unicorns, venture capitalists, ntechs and other growth companies. Furthermore, we will expand our infrastructure in the most cutting-edge manner possible by expanding virtually into the metaverse with our very rst Metaverse Acceler- ator Programme. We have so much to look forward to in the new year. If 2022 is any indi- cation, 2023 will be a landmark year for DIFC, and I invite you all to be part of our journey. A significant growth area is ntech. Between January and Septem- ber, DIFC-based ntech rms secured more than AED2bn ($559m) of funding and the number of ntech and inno- vation firms joining the centre exceeded the total that established operations during the whole of 2021. DIFC also became one of the brightest growth spots in the global fintech market, valued at more than $135.9bn in 2021. With ntech continuing to remain a key priority for us in the new year, DIFC will host the inaugural Dubai FinTech Summit in May 2023. The global event is expected to bring together more than 5,000 experts, thought leaders, policymakers and decision-makers to discuss how they can shape a new wave of innovation, enterprise and growth for the global nancial industry. We have also seen firms from across the nance industry setting up in DIFC. As an example, it has been widely reported that hedge funds are choosing Dubai as a global hub. This is for several reasons, such as the collaborative approach we have between our clients, the regulator and ourselves as the authority, being the most proven nancial services plat- form in the region with almost 20 years of experience and access to the best talent. Building on our approach to inno- vative thinking, we will enhance the way people experience DIFC in 2023, starting with DIFC Living. We broke ground on the project in late 2022 and DIFC Living will begin to take shape throughout the coming year. It is a step-change project designed to elevate our reputation as a global centre, not just for financial excel- lence, but position us rmly as a place where you can work, live and play. We are developing residences featuring high specifications that people and companies in DIFC have come to expect. The project will also include built-in co-working spaces where people can meet and collabo- rate and then go on to enjoy the restaurants, galleries and retailers Regional hub Amiri says DIFC Authority will continue to focus on expanding its influence to become the largest nancial services and technology ecosystem in the region that make up the fabric of DIFC. DIFC Living is set to become a major part of our Innovation Hub, which is the region’s largest innova- tion community. Currently, we have more than 600 growth-stage tech rms, which range from established innovation companies to digital labs, venture capital rms and educational institutions. The Innovation Hub generates added economic value by fostering innovation, enterprise and talent across various sectors, with a focus on future-oriented industries. In addition to this focus on the expansion and diversification of DIFC’s o erings, we will continue to place sustainability, environmental, social and governance at the forefront of everything we do. For example, sustainability concepts were ingrained right at the planning stage of DIFC Living and the expansion of the Innovation Hub. We have been meticulous with the environmental IND USTRY | 42 Vol. 24/01, January 2023 More UAE legal reforms to follow in 2023 The leaps forward taken by the UAE in are certain to be replicated in 9% The rate on taxable pro ts of more than AED375,000, according to the new UAE VAT Laws UAE Ministry of Justice Law reform is a key pillar of economic dynamism and the promotion of entrepreneurial activity Al Nahyan. Indeed, it was the biggest legislative reform in the history of the UAE. These reforms were introduced not simply to mark the 5 th anniver- sary of the UAE. They came at a pivotal moment for the country with impres- sive economic momentum and progressive societal changes. With no shortage of ambition, the country required key legislative changes to underpin that ambition and thirst for development progress. So saw the introduction of laws in various sectors and areas including investment, trade and indus- try, company regulation, intellectual property, electronic transactions, trust services and society and personal laws. The changes came following consulta- tion at local and federal levels and included bench-marking global best practice before enacting the new laws. So much of what we have seen has been based on the desire to ensure that the UAE remains one of the most attractive BY SACHIN KERUR , MANAGING PARTNER, MIDDLE EAST, REED SMITH If felt like a year when there was a regular introduction of new laws in the UAE, you would be right. It was. Many of these new laws stem from a wide-ranging reform of the country’s legal system approved at the end of by the late President, Sheikh Khalifa bin Zayed arabianbusiness.com 43 There is no doubt that 2023 promises to be another bumper year for legal reforms and the introduction of more laws that have a transformational impact in the UAE ence, the global political, economic, scienti c, and social platform aimed at achieving commitments to reduce the impact of climate change. The 2023 edition of the Cop 28 climate conference will be held at Expo City Dubai. The UAE will consequently broaden its legislative programme with international commitments committed to a tougher stance on climate change, including cutting the use of coal- red power stations, reducing reliability on fossil fuels and boosting renewable energy sources. And returning to the theme of domestic UAE legal reforms, one area that will be closely watched will be dispute resolution which means all processes and forum that are used to settle disputes. It includes all dispute resolution methods from informal resolution, mediation, through to arbi- tration and court processes. Disputes can have some very negative consequences and investors and the UAE government understand that preventing or limiting disputes and resolving disputes earlier and more e ciently cement the position of the UAE as a business hub. Recent changes to the arbitration landscape in Dubai for example have included the streamlining of arbitration centres and the introduction of modern arbitration rules putting Dubai on the same footing as arbitra- tion centres in the likes of London, Paris, and Singapore. With the introduction of the UAE Mediation Law late last year and now the Mediation Centre Law, the UAE has signalled a strong intention to build on its existing dispute resolution o ering so businesses can con dently opt for an alternative dispute solution without resorting to arbitration or litigation. We believe that 2023 will be the year that mediation becomes a more prominent feature from the menu of dispute resolution options here in the UAE. There is no doubt that 2023 prom- ises to be another bumper year for legal reforms and the introduction of more laws that have a transformational impact in the UAE. venues in the world for foreign and domestic direct investment. For example, changes to the Commercial Companies Law now allow investors and entrepreneurs to establish and fully own mainland companies in all sectors except for a small number of reserved strategic activities. This will enhance the UAE’s competitive advantage as it seems economic diversification towards an innovation-led and knowl- edge-based economy. Then we saw the introduction of the Personal Data Protection Law which provides a framework to ensure the con dentiality of information and protects privacy by providing gover- nance for optimal data management and protection. The processing of personal data without the consent of its owner is not allowed, with the exception of where processing is necessary to protect the public interest or relates to the personal data that has been made available by the data owner or that the processing is necessary to comply with relevant laws. The new labour law which came into force in February 2022 brought signi cant changes in order to develop the elasticity, resilience and sustain- ability of the UAE’s labour market and make it more attractive to global employers and employees alike. So these are just three prime exam- ples of legislative modernisation through this last year. And what can we expect in 2023? Almost certainly more of the same. The UAE has amended certain provisions of the VAT laws with e ect this year and has issued a federal decree on the taxation of corporations and businesses from 2023 such that there will be a 9 percent rate on taxable pro ts of more than AED375,000. Prof- its below AED375,000 will face a zero rate which will enable SMEs and start- ups to be develop at early stage. And the UAE has launched an unemployment insurance scheme starting in 2023. The new scheme will protect employees in the private sector and the UAE’s federal government by providing them with a cash compen- sation for a limited period not exceed- Advisor Kerur says the UAE is seen as a preferential destination for global human and nancial capital ing three months for each claim in the event of job termination for reasons beyond their control. We fully expect 2023 to continue the zeal for legal reform in the UAE. Law reform is a key pillar of economic dynamism and the promotion of entre- preneurial activity. There is almost certainly therefore an ongoing exercise of analysing current laws to determine further reforms through 2023. The UAE leadership is only too aware that reforms now will have an accretive value to the enhancement of the economy at this critical time for the global economy. More than ever the UAE is seen as a preferential destina- tion for global human and financial capital. This will continue if the current trends towards reforms and moderni- sation are maintained. Another interesting aspect of next year will be the COP28 climate confer-44 Vol. 24/01, January 2023 IND USTRY | with some initiatives and much, much more. The interesting aspect of impact investing is that physical presence of investors is not required and it can be done anywhere by anyone. Increasing awareness Interestingly, impact investing saw a huge boost in popularity during the pandemic due to increased awareness of climate change and social challenges such as unequal access to healthcare and racial and gender inequality. So, I’m sure you’ve read the term a lot recently – and yet in my opinion it’s too often used incorrectly. Most people misunderstand what impact investing truly ‘is’ – which is unsurprising since there are many di erent de nitions out there depending on who is deploy- ing capital. However, the generally accepted de nition involves three guiding prin- ciples: rst, there must be an expecta- tion of nancial return – the investor is looking to make a profit while also having a positive impact on the world’s social or environmental concerns. Second, the change sought – typically social or environmental – must be intentional; and third, there must be an attempt to measure the change. The rst principle I mentioned – the expectation of nancial return – is the one that differentiates impact investing from philanthropy. From the The di erence between impact investing, philanthropy and charity These three strategies all have slightly different priorities, writes Murtaza Hashwani, Deputy Chairman and CEO of Hashoo Group and Chairman of Hashoo Foundation Importance Impact investing can enhance effectiveness and ef ciency to tackle global economic, social, and ecological crises PHILANTHROPY | Prediction Hashwani is foreseeing a more radical and inclusive approach to philanthropy Impact investment is a rapidly grow- ing phenomenon that has sparked enthusiasm far and wide. These kinds of investments are an important element towards building a more inclu- sive capitalism that serves society better. They can enhance e ectiveness and efficiency to tackle the ongoing global economic, social, and ecological crises of our time. Not only can impact investing work towards climate change initiatives, it can also help tackle food security, improve healthcare and education sector and even achieve gender equality arabianbusiness.com 45 72% The percentage of investors in the Middle East who believe they can generate improved returns through ESG investments, according to Swiss banking group Lombard Odier | PHILANTHROPY perspective of social responsibility goals point of view, investments in social, environmental and health verti- cals, will de nitely yield more ROI than just charitable donations. Even if the growth is slower than other busi- nesses, it still makes more sense than just giving grants. A philanthropist may care greatly about social change, but the nancial return is generally not the main objec- tive. Instead, philanthropic investments are often concessionary – financial gains are sacri ced for social or envi- ronmental bene t. As Albert Einstein so rightly put it: “It is every man’s obligation to put back into the world at least the equivalent of what he takes out of it.” For a sustainable world Philanthropic impact investment aims to create impact by supporting social enterprises building viable organisa- tions and unlocking sustainable social innovations. Efforts to help new ventures navigate from a stage of proven startup to early growth involves serious professional and personal commit- ments of key individuals and substantial resources. Due to the many uncertain- ties – combined with a lack of experi- ence and resources at this early stage of enterprise development – these commitments carry a high-risk pro le. Does the world need both? Yes, it does. Ultimately, they are di erent solu- tions to improve people’s lives. Accord- ing to IMD, impact investment is “inten- tional pre-determined social impact, combined with an analytical approach for impact measurement. Whereas, philanthropic investors may deliber- ately accept no or below market nan- cial returns.” Which brings us to charity. While impact investing and philanthropic investments are focused on long-term strategies over several years, charity is focused on providing immediate relief to people. One can think of charity as a natural, emotional impulse to an immediate situation whereby giving usually occurs in the short-term and in response to a critical and urgent situation. Charity can take the form of Philanthropy and impact investing Philanthropy or impact investment are entering a whole new era, which may have seen the spike due to the pandemic. The global crisis may have accelerated philanthropist activities but the world’s issues are way too big for only a handful of people to be mobilised. One key factor to keep in mind is how the new generation is supporting such initiatives. They are not only becoming agents of change but are also leveraging the power of their global network and supporting brands and products with deep-rooted social impact strategy in place. Being involved in creating change and measuring its socio-economic success in communities around the world, is the main focus of the Gen Z tribe. There’s an urgency in this generation, and rightly so, to find solutions for some of the biggest chal- lenges of our times. Therefore, I foresee a more radical and inclusive approach to philan- thropy and impact investment in the coming years. One world Individuals and organisations are responsible to nd solutions to some of the biggest challenges of the planet monetary donations or volunteering – the aim is to give help right now. Regardless of the issue area, these three terms and practices have some overlap and certainly do share one main thing in common – they’re about improving the lives of people across the world and therefore in my opinion are equally valuable. The global crisis may have accelerated philanthropist activities but the world’s issues are way too big for only a handful of people to be mobilised IND USTRY | 46 Vol. 24/01, January 2023 Cybersecurity trends rising in GCC in 2023 Cyberattacks are only getting more frequent, with the importance of cybersecurity continuing to rise Data protection Only 20 percent of GCC’s organisations have deployed the zero-trust framework compared to 41 percent globally, according to IBM’s recent Cost of a Data Breach Report Despite the efforts security teams have put in, the cyber- security landscape continues to worsen yearly. Cyberattacks have increased, making cybersecurity become a priority at every organisa- tional level. According to IBM’s latest Cost of a Data Breach Report, the global cost of a data breach averaged AED 5.98m ($ . 5m); a . percent increase from last year, AED 7. m for the GCC and, AED . 7m for the cost- liest country in the world, the US. Among the 7 industries observed in the report, the healthcare industry experienced the highest average data breach cost of any industry. This comes as no surprise as healthcare is a lucrative industry with critical BY KAWTHER HACIANE , IBM’S SECURITY LEADER FOR GULF, LEVANT AND PAKISTANarabianbusiness.com 47 Launching a cybersecurity awareness programme can help train your sta to be a valuable security asset tion and response times. Organisa- tions with these technologies can contain cybersecurity threats 74 days faster than other organisations that don’t utilise these technologies. (Source: IBM’s Cost of a Data Breach Report in 2022). 4. Continuously train and practice Prevention is important but preparing for a cybersecurity incident is equally important. Cybersecurity building and testing incident response play- books will help build an organisation’s security resilience, while also helping to pressure test the workforce. 5. Protect against insider threats Insider threat is considered one of the top threat vectors in the Middle East. That said, several techniques can be used to prevent this including, but not limited to, EDR (endpoint detection and response), UEM (uni ed endpoint management), IAM (identity and access management), or DLP (data loss prevention) solutions. 6. Security for operational technol- ogy (OT) environments is a growing concern, particularly in the GCC Nearly half of all cyberattacks in this region target the oil and gas industry, which is becoming more connected as it undergoes digital transforma- tion. OT systems must be viewed as a component of a comprehensive secu- rity framework; therefore, an OT security strategy is no longer a nice to have. top-level infrastructure and data-rich records. Unlike other industries, data records in the healthcare industry are more static. The next most targeted industries are nancial, followed by pharmaceutical, technology and energy, while for the GCC, the prime sector is nancial, followed by health- care, then energy. Cyberattacks have especially swept the Middle East, leaving private and public entities vulnera- ble. According to the Digital Lifestyle in the UAE 2022 report published by the UAE’s Telecommunications and Digital Government Regulatory Authority (TDRA), the UAE is among the world’s leading countries in vari- ous digital life indexes, thanks to a strong information and communi- cation technology (ICT) sector. With the rapid adoption of digital tech- nologies, the UAE becomes very attractive to cyber threats. Recent data and trends show just how severe the cyber threat is in the GCC and one example of that is the longer mean time to contain cybersecurity attacks (globally, it takes 324 days to contain a cybersecurity attack against 349 days in the GCC). Security leaders must consider how to navigate this constantly chang- ing and increasingly costly cyberse- curity landscape. To decode this uptick in cyberattacks and costs, security leaders need to pay attention to the following top cybersecurity considerations for 2023: 1. Adopt a zero-trust security model to help prevent unauthorised access to sensitive data Today, according to IBM’s recent Cost of a Data Breach Report, only 20 percent of GCC’s organisations have deployed the zero-trust framework compared to 41 percent globally. Adopting a zero-trust architecture will help protect data and resources by preventing unauthorised access. 2. Launch a security-awareness programme Educate sta on the potential cyber- security threats and how to mitigate Critical infrastructure Haciane says nearly half of all cyberattacks in the region target the oil and gas industry risks. Launching a cybersecurity awareness programme can help train your staff to be a valuable security asset - the last “intelligence” line of defence. For example, awareness programmes can include eLearning, phishing simulations, and gami ca- tion. To make it even more impactful, tailor the content to speci c job roles. 3. Automate by investing in SOAR and XDR SOAR (security orchestration, auto- mation, and response) and XDR (Extended, Detection, and Response) are crucial elements of cybersecurity automation that help improve detec- Vital information The healthcare industry experienced the highest average data breach cost of any industry, a report from IBM found48 Vol. 24/01, January 2023 waiting in a line is eager to stop waiting in that line. Maybe compliance increased simply due to a reasonable justi cation? In fact, no: Statement three resulted in 9 percent of people waiting in line letting the person go ahead of them. “Because I have to make copies” isn’t a reasonable justi cation. Everyone in line needs to make copies; if not, they wouldn’t be waiting in line in the rst place. Yet almost every person let the individual cut in line. Why? As Robert Cialdini, the author of the seminal book In uence, writes, “A well-known principle of human behaviour says that when we ask some- one to do us a favour, we will be more successful if we provide a reason. People simply like to have reasons for what they do.” Want your employees to embrace a new process? Want to convince other people an idea makes sense? Want to The power of ‘because’ Inspiring employees Adding a speci c cause (rather than a generic “well done”) signi cantly increases the effect of that praise on job satisfaction, engagement and feelings of overall well-being In 977, Harvard researchers asked people to use one of three phrases when they intentionally cut in front of innocent people waiting in line to use library photocopiers: . “Excuse me, I have ve pages. May I use the Xerox machine?” . “I have ve pages. May I use the Xerox machine because I am in a rush?” . “Excuse me, I have ve pages. May I use the Xerox machine because I have to make copies?” Sixty percent of the people waiting in line let the person go ahead of them. Surprising? Not really: When asked for a favour, most people tend to say yes, if only to avoid confrontation. More surprising is that the second statement resulted in 9 percent of people waiting in line let the person go ahead of them. While urgency (“because I am in a rush”) certainly contributed, still: No matter what the line, everyone Leaders should embrace praise as a matter of course COMMENT | By Jeff Haden, motivational speaker and author of The Motivation Myth COMMENT | By Jeff Haden, mo Because your employees always want to know why they should do something, and why what they do matters so much. Especially to you 55% The percentage of HR leaders who reported “leading change” as a critical skill most lacking in their organisation, according to the 2022 HR Insights Surveyarabianbusiness.com 49 | COMMENT Early success - whether actual or not - leads to future success. Your employees don’t necessarily need to have been successful; they just need to think they were Way of thinking Adopting a xed mindset causes people to think they can’t change who they are show investors or stakeholders how business or project will generate a return? Harness the leadership power of “because.” Because if you can’t share a meaningful “because,” you’re just giving orders – not leading change. But don’t stop there. “Because” can be just as powerful after the fact. Take employee recognition; everyone knows appreciation and praise significantly improve employee performance, moti- vation and retention rates. What you might not know is that adding a speci c cause (rather than a generic “well done”) signi cantly increases the e ect of that praise on job satisfaction, engagement and feelings of overall well-being. A 2005 study published in American Psychology found the key is to make your praise causal, not just passive. Partly that’s because specific praise always trumps generic praise: • “Thanks for everything you did” is much less impactful than “We landed that customer because you put so much time and e ort into crafting the product demo.” • “Thanks for all your hard work” is much less impactful than “We didn’t lose that customer because you were so empathetic, patient, and understanding.” But that’s also because specific praise – praise that includes a “because” – helps lead to a growth mindset. If you aren’t familiar, accord- ing to research on achievement and success by Stanford University psychologist Carol Dweck, most people tend to have one of two mental perspectives where talent is concerned: • Fixed mindset: The belief that intel- ligence, ability, and skill are inborn and relatively xed – that we “have” what we were born with. People with a fixed mindset typically say things like, “I’m just not cut out to be a leader.” • Growth mindset: The belief that intelligence, ability and skill can be developed through e ort – that we are we work to become. People with a growth mindset typically say things like, “With a little more time and e ort, I’ll be able to pull this team together.” Adopting a fixed mindset causes people to think they can’t change who they are. They’re smart, or not. They’re skilled, or not. They’re attentive to detail, or not. Think that way, and it’s easy to feel helpless when faced with a challenge; if who you are just isn’t good enough, why try? Praise that includes “because” creates a causal relationship and fosters a growth mindset. They landed that customer because they worked hard. They rescued that customer relation- ship because they listened and empathised and problem-solved. Good things didn’t just happen – through focus, e ort, and application, they made good things happen. Which means, with time and e ort, they’re capable of learning and develop- ing and growing… and making even greater things happen. Oddly enough, that’s true if praise is somewhat random. A series of studies published in Proceedings of the National Academy of Sciences found that random praise, even random praise that wasn’t particu- larly deserved, “produced signi cant improvements in subsequent rates of success as compared with the control group of non-recipients.” Early success - whether actual or not - leads to future success. Your employ- ees don’t necessarily need to have been successful; they just need to think they were. Especially if you praise effort and include a causal “because.” Because your employees always want to know why they should do something, and why what they do matters so much. Especially to you. 35% The expected voluntary turnover in 2023, according to a research from Work InstituteNext >