Through careful planning and bold regulatory reforms, Bahrain is poised to become a major hub for finance, technology and innovation, according to a new report by the Milken Institute.
However it added that Bahrain needs to continue its efforts to overcome challenges and achieve the objectives laid out in the kingdom’s Vision 2030 strategic plan launched in 2008.
The report, Bahrain and the Fourth Industrial Revolution, is authored by Claude Lopez, Milken Institute director of research, together with research analysts Joseph Bendix and Cesar Servin.
“Bahrain has developed a business-friendly environment, regulatory framework, and support system that make the kingdom an attractive destination for global companies, investors, and entrepreneurs,” said Lopez, citing a six-fold increase in foreign direct investment between 2016 and 2018.
“With its skilled population, low cost of living, and continued investment in technology infrastructure, Bahrain is positioned to continue to achieve positive outcomes.”
The Milken Institute report points to recent policy changes that increase transparency, protect investors, align with international standards, and modernize access to Bahrain’s capital markets, which have yielded measurable results.
In addition, it said Bahrain has enhanced support structures for small and medium-sized enterprises (SMEs) and startups that connect government agencies, investors, and other stakeholders to help businesses grow.
The report said Bahrain’s strong emphasis on startups and technology comes with challenges that need to be addressed to ensure the resilience of the new economic model.
Based on their analysis, the authors also identify several challenges, including the need for startups to grow into larger firms that will create more jobs, access to highly trained labour to satisfy these additional jobs, and assistance for existing firms transitioning to the new digital economy.
The report offers several recommendations, including assisting micro-firms to grow and offer more jobs, facilitating access to international talent and ensuring private-sector wages are competitive.
The report also recommends supporting small local firms with services that can help with the transition to digital.