Opinion: The catalytic effect

With air transport connectivity comes a lift in international trade – a reality that Dubai has smartly capitalised on. But aerotropolis or no aerotropolis, there’s no room for complacency

Dubai is at a critical juncture in its development trajectory. Will the emirate resume the remarkable dynamism that its bold leadership fostered from 1990 to 2008? Will it reignite its unique competitive strengths in trade and commerce? Will it continue to capitalise on its strategic location and expanding global connectivity – created in part by its superior hub airline? And one can’t help but wonder whether the dramatic growth of Emirates Airline and the advantages it has brought to Dubai can continue when faced with the challenges of rapidly rising new airlines and airports in the Gulf region. Will the ambitious aerotropolis planned around its new Al Maktoum International Airport achieve its full potential?

All these issues, of course, are interwoven. Taken together, they will go a long way in determining the future prosperity of Dubai. It is therefore essential that they be addressed with both strategic vision and coordinated actions. This requires a solid understanding of the drivers of 21st-century competitiveness, especially the heightened roles that speed, agility and connectivity play.

Dubai’s excellent air connectivity also attracts business investment by providing greater accessibility to wider bases of suppliers, customers and enterprise partners

The small size of Dubai dictates an external, in fact, global orientation if the emirate is to regain its remarkable upward trajectory. Small size and rapid economic growth correlate over the longer term only if globally oriented niche market strategies can be found and effectively exploited that provide viable pathways for sustained competitiveness. There is little doubt that Dubai’s strong aviation and aviation-enabled sectors have been, and will remain, pivotal components of these pathways.

By “aviation-enabled” I mean the firms and industries that prosper because of the speedy, long-distance connectivity afforded by passenger and cargo transport. Expanding air connectivity, for example, has generated new opportunities for Dubai’s tourism by substantially enlarging its global catchment areas.

Dubai’s excellent air connectivity also attracts business investment by providing greater accessibility to wider bases of suppliers, customers and enterprise partners. And the extensive network connections of Emirates Airline provide benefits beyond the sum of benefits from point-to-point routes, making Dubai a global transshipment hub.

Simply put, air transport connectivity catalyses international trade in goods and services well above those that could otherwise be realised. Transportation economists sometimes term these benefits “catalytic effects”. Such economic gains are further promoted by closely integrated multimodal transportation, including ports and highway-linked free trade zones, both of which Dubai has nicely capitalised upon.

But Dubai cannot rest on its laurels. Dubai’s Gulf neighbors are aggressively growing their flag carriers and building new airports. Interestingly, these new airports and surrounding open areas are being developed based on the original aerotropolis model of Dubai World Central planned around expansive Al Maktoum International Airport to meet 21st-century global business needs.

Given its mushrooming aviation and aviation-related industry space and infrastructure requirements, the emirate should perhaps reassess proposed future strategic investments, accelerating the timetable for a complete transition to Al Maktoum International Airport which, in turn, will drive successful aerotropolis development at Dubai World Central.

For more on John Kasarda’s theory of the ‘aerotropolis’ see www.aerotropolis.com