The West is set to lose further ground to the East as innovation in industry shifts to emerging economies, said James Woudhuysen, professor of forecasting and innovation at De Montfort University.
Speaking at Fund Strategy’s Investment Summit in Dubai, Woudhuysen (pictured) said the West’s obsession with environmental concerns threatens to undermine industrial progress in developed countries.
Proof of this problem can be seen in the drop in the number of students studying the sciences and engineering in Britain and the expansion of courses such as media studies.
Woudhuysen said this represents a move towards “presentation over substance”, which will help the more dynamic emerging economies gain ground.
Because of educational trends in the developed world international oil companies face a skills crisis as well as a lack of innovation. This will broaden the gap between them and the nationally owned oil companies in the Middle East and central and eastern Europe.
The focus on the environment will also exacerbate the situation through supply constraints placed on these companies by green legislation. The combination of these factors will benefit the East and the Organization of the Petroleum Exporting Countries (Opec) which will extend its dominance of oil markets.
Such is the importance of the Middle East to the future of the world’s oil supply that unless Iraq and Saudi Arabia can continue to increase supply until at least 2015 “the industry will hit a wall” said Eckart Woertz, programme manager economics at the Gulf Research Centre in Dubai.