Following the historic signing of the Abraham Accords between Israel and the UAE in September 2020, promising economic opportunities are emerging for entrepreneurs and investors. One year later, people-to-people contact is flourishing and generating activity across all areas—from business deals to cultural exchanges, health care partnerships and joint scientific initiatives.
On May 18, 2022, Kroll facilitated an exclusive roundtable forum with select industry and regional experts to discuss the developing collaboration in the health care industry between the UAE and Israel.
Over the past 10 years, the UAE has strived towards building a diversified economy that broadens the country’s sources of income, from being historically oil dependent. With world-class health care and medical tourism being a key part of the country’s vision, the UAE-Israel relationship stands to be an essential part of this strategy.
The UAE is a key player in the medical tourism industry across the world and aims to be a pioneer in health care by offering better health care solutions for its people. In the industry today, technology-enabled health care allows active participation from patients towards routine care as well as treatment of long-term conditions. Private and public health care providers see the adoption of artificial intelligence, cognitive assistance, robotics and blockchain to be catalysts towards improving productivity, accuracy and speed in the delivery of health care services. Investors in the UAE believe that the relationship with Israel brings an opportunity to attract and retain highly sought-after Israeli talent and skillset in the industry and promote unparalleled capabilities in medical research and development. As a result of multi-billion-dollar investments every year since 2013 towards, health care capabilities across the country, Dubai and Abu-Dhabi have been placed 6th and 9th best cities for medical tourism globally.1
Emirati sovereign wealth funds are making direct investments into Israeli technology companies, and UAE firms are positioning themselves as partners for Israeli expansion into the rest of the Middle East. In addition, the founding of specialized free-trade zones with a health care orientation and the promotion of initiatives such as the “Health Pioneers” program have made the country more lucrative for investors with leading medical device and pharmaceutical corporations to set up operations in the UAE. This was especially important to lay the necessary infrastructure to encourage foreign investment, create a plentiful health ecosystem and enable future growth. However, owing to the nature of business and risks in the health care sector, navigating market entry barriers and regulatory development can be challenging.
The need for regulation to ensure safe and ethical health care in an industry which is heavily reliant on third parties is quite complicated, especially as managing cyber and data privacy risk is a rising issue. Managing cultural differences and its impact on the need for regulation can bring about complexities that need to be navigated carefully while also keeping up with the pace of industry needs and requirements. However, investors, innovators and companies looking to enter the industry recognize the importance of harnessing a risk-based approach towards regulation that is in line with global standards. UAE regulators have also taken key steps to ensure that regulatory requirements and market entry requirements continue to adapt to inherent risks and industry standards to stimulate growth. This has encouraged Israeli companies to invest in setting up new offices in Dubai and Abu Dhabi and moving staff from Tel Aviv.
Revenue generated from sales within the UAE health care sector is forecast to grow at a compound annual growth rate (CAGR) of 7.5% over the next five years to reach $10.7 billion by 2025. Private sector health care spending is set to outpace public sector health care spending over the next five years, due to increasing market activity driven by compulsory health insurance, privatization of hospitals, a growing occurrence of lifestyle diseases, such as diabetes or obesity, and better awareness of preventive care.2
The steps taken towards encouraging bilateral trade, business and innovation between the UAE and Israel have demonstrated ample opportunity to encourage participation from other GCC countries and show great promise for the future. The demand and growth of the industry is evident and underlines the potential for the strengthened relationship between the two countries through the Abraham Accords.
Sources:
1 https://www.zawya.com/en/business/dubai-abu-dhabi-among-worlds-top-10-medical-tourism-destinations-yhsfe4a5
2 https://www.dubaichamber.com/whats-happening/chamber_news/uae-healthcare-sector-set-for-post-covid-revenue-boost
