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Early in the 21st Century the United Arab Emirates (UAE) government estimated that their oil reserves could run out in a 150 years. They began efforts to diversify the UAE economy into clean industries--tourism, technology and renewable energy--and signal that the country was pivoting away from an oil-based economy toward one that would grow and thrive as an environmentally aware, sustainable, low-carbon economy. Masdar City, a UAE marquee initiative designed to be the world's first zero-carbon city, was an important pillar of this economic diversification.

Dr. Al-Jabar, Masdar City founder, envisioned it as a commercially viable "green-tech" cluster including an economic free zone relying on solar energy and other renewable resources that could serve as a model for sustainable urban development regionally and globally. This bold effort was not as straightforward as anticipated and planned. The case documents the wide variety of surprises--technological, financial and environmental challenges--that obstructed the initiative's progress, as well as the invaluable learning that unfolded as the Masdar City initiative evolved. The case provides an opportunity to explore the UAE's business climate, the role of government in economic development, challenges inherent in building an industry cluster, and limitations due to scarce talent resources

This case enables the exploration of several macro topics and application of related analytic frameworks. These include: (1) country attractiveness (Diamond-e model) and the role of government in repositioning the economy (PESTE Framework); (2) industry analysis of the new energy industry (5-Forces model); (3) challenges associated with building an industry cluster, in this case a new energy cluster (Location choice framework); (4) institutional voids in emerging markets, especially technological and human capital voids; (5) resource attraction challenges (Knowledge talent attraction and retention); and (6) overcoming project derailers.


United Arab Emirates
17 pages