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In just three decades, Dubai has risen from a modest seaside town into one of the first great cities of the 21st century by leveraging its location and bold global ambitions. Yet the city’s best days may still lie ahead.
Today’s geopolitical tensions and trade protectionism are a far cry from the globalization ethos that helped fuel Dubai’s rise, but they play to the city’s strategic strengths.
Dubai’s leaders promoted real estate development, finance, shipping, aviation, and tourism, and in the space of a generation built a dynamic city that boasts the world’s tallest building and busiest international airport, and hosts the regional headquarters of most major multinationals.
Dubai now ranks 8th among 1,500 cities across Asia, Africa, Latin America, and the Middle East as a commercial hub, or city with vibrant corporate, industrial, retail, and hospitality sectors, according to the Oliver Wyman Forum’s index of The Cities Shaping The Future.
It also ranks 4th as a mobility connector, or city that facilitates the movement of goods and people.
That base gives Dubai an opportunity to capitalise on two major shifts in the global economy: the rebuilding of supply chains for greater resilience and the rapid rise of mid-tier cities across Africa, Asia, and the Middle East that need a sophisticated hub to connect them to global markets.
Seizing that opportunity can enable Dubai to challenge some of the Asian megacities that top our commercial hubs ranking, including Tokyo, Shanghai, and Singapore.
Capitalising on supply-chain disruption
To sustain robust growth and challenge top-ranked cities like Tokyo, Shanghai, Seoul, and Singapore, Dubai authorities should take advantage of the realignment of global supply chains in response to geopolitical tensions.
A recent surge in tariffs and other trade restrictions has prompted many multinational companies to double down on diversifying their supply chains for greater resilience. India is an increasingly attractive location for companies looking to avoid US tariffs on China and Southeast Asian countries, and our conversations indicate that Korean and Japanese investors are quickly pivoting to this large market. Japanese investment in India amounted to $5.5bn in 2024, more than three times the annual average between 2015 and 2020. Dubai is well-placed to take advantage of this trend given its proximity to India and the fact that Indian nationals make up roughly a third of the population of the UAE.
Dubai is already playing a growing role in shipping manufactured goods and parts to and from India and selling professional services to companies building new factories and distribution facilities in the country. The UAE and India signed an economic partnership agreement in 2022, and two-way trade between the countries reached nearly $85bnin the 12 months ended in March 2024. The UAE also is India’s seventh-largest overseas investor, having poured $22bn in foreign direct investment into the country since the year 2000.
Dubai also has an opportunity to play a greater role orchestrating trade flows between Southeast Asia, South Asia, and North Africa, as supply chains rebalance.
Morocco and Turkey are two potential winners from the latest tariff disruption, and in today’s highly interconnected supply chains, Dubai’s logistics companies will play an important role transshipping products between growing numbers of factories in India, Southeast Asia, and across the Middle East and North Africa.
Dubai can build on its record and replicate the success Hong Kong has had the past 30 years serving as a gateway between the rapidly expanding manufacturing sector in southern China and global markets.
Seizing the growth opportunity of mid-tier cities
Another opportunity closely related to supply-chain realignment is the rise of mid-tier cities. Dubai lies within a six-hour flight of over 800 cities across Africa, Asia, and the Middle East with populations greater than 250,000.
Combined, they have over one billion people and a GDP of $8tn, making them increasingly attractive markets.
These cities are poised to be a growing source of consumer demand for everything from travel services and tourism to e-commerce and financial services. The fastest-growing of these cities are benefiting from expanding manufacturing investments, growing business process outsourcing, and improved digital connectivity. As growth spreads beyond major cities to these mid-tier urban areas, the prospects for the emirate will grow.
Dubai, which serves as a destination or transit hub for more than 90 million travellers from over 270 cities around the world, is well placed to capture a big share of the growth in leisure travel from these mid-tier cities.
The emirate also can serve as a convenient and efficient distribution hub for e-commerce platforms selling to shoppers in these cities. Chinese e-commerce and logistic players, for instance, can easily tap these markets from Dubai’s existing transport infrastructure.
The city also has an opportunity to attract more corporate headquarters beyond those of multinationals that already have a presence. The growing consumer clout of the mid-tier market across Africa, Asia, and the Middle East makes it more compelling than ever for companies to establish a regional office to support their local presence in these cities. Dubai also can attract local conglomerates from these same markets as they seek to build out an international business.
Can Dubai seize these opportunities? For a city that has grown its population nearly five-fold in the past three decades and transformed a largely undeveloped coastline into a glittering global destination, the question might be better phrased, how can it not?
The writer is a partner in Oliver Wyman’s Finance and Risk practice and leads Asian initiatives of the firm’s think tank, the Oliver Wyman Forum.
