Businesses around the world are navigating an increasingly complex environment - reshaped by geopolitical uncertainties, shifting trade dynamics, rising tariffs and intensifying competition. But in addition to these, there are also the two powerful megatrends of artificial intelligence and climate change at play that are fundamentally transforming how we live, work and create long-term value. While AI holds the promise to supercharge growth, physical climate risks such as flooding, drought, heat stress and wildfires are already disrupting economies around us.
So, what does this mean for businesses and organisations? The message is clear: survival will depend on reinvention - companies will have to change the way they create, deliver and capture value. In our 28th Annual CEO Survey, 60% of CEOs in the Middle East think their businesses will not be viable within 10 years or less without adaptation.
But when it comes to reinvention – it is rarely straightforward. Is success about choosing the right business model, getting the timing right or executing with discipline? History offers a cautionary tale. Companies that moved too early - or too late - have seen their values being eroded. In fact, 89% of the Fortune 500 companies listed in 1955 are no longer on the list today.
PwC’s analysis shows that for almost 80% of traditional sectors the pressure to reinvent is at or near a 25-year high. Our economists have identified US$7.1trn in revenues globally that’s up for grabs globally from business model reinvention (BMR) in 2025 alone.
So, what does this mean for businesses in the region?
The Middle East holds a powerful strategic advantage: access the lowest-cost renewable energy in the world and its position as an emerging global hub for artificial intelligence, backed by forward-thinking governments driving a tech-enabled future. This foundation gives regional businesses and organisations a clear edge. Trust in AI is particularly high in the Middle East - half of GCC CEOs express strong confidence in its use. There’s also a notable appetite for calculated risk and innovation - over half of regional business leaders have introduced new products or services in the past five years, while 53% have expanded into new customer segments to grow their market reach.
In our latest report, ‘Value in Motion - The Middle East’s time to lead is now’ our research indicates that the forces of AI and climate change are already reconfiguring traditional – and often siloed - industries into new domains of growth: zones of economic activity and value creation, where companies collaborate in imaginative ways to meet fundamental human needs, such as how we move, fuel, feed, build, make and care for ourselves Within and across these domains, trillions of dollars of value will be in motion - creating unprecedented opportunities for those ready to act.
To stand the test of time, and capture this value in motion, businesses will need to move into these domains of growth, where industry lines are already blurring and cross-sector partnerships forming. In the region we are already observing this shift; companies are transforming agriculture with technology, leading plant-based innovation to support local food security; transport and retail companies have expanded into fintech with digital wallets and peer-to-peer transfer services; and healthcare is transforming its services and operating models through AI-driven tools.
Our research also outlines three distinct future scenarios for the Middle East by 2035- trust-based, tense transition and turbulent - each with different outcomes. At stake is US$232 billion - the gap between the region’s most constrained and most optimistic futures. In the most favourable scenario, widescale AI adoption and decisive climate action could lift the region’s GDP to US$4.68 trillion by 2035, with AI alone driving an 8.3% productivity gain.
To reach that future, business leaders must act now. Amid rising geopolitical risk, oil price volatilities and tariff changes, building strategic alliances and resilient supply chains will be key to unlock innovation across borders and sectors. Opportunities can emerge from shifting customer demographics and demands, breakthrough technologies and transitioning to a low-carbon economy. Success will depend on agility: developing sustainable future-focussed products and services, fuelled by a renewable energy infrastructure and supercharged through AI innovation.
In the decade ahead, businesses leaders must anticipate where value will emerge and build organisations that can evolve continuously to capture it. The future belongs to those who can outthink, outpace and outperform. Value no longer resides in single-sector excellence or legacy operating models. It now flows to those who can reimagine business architecture across ecosystems, embedding technology, trust, and purpose at the heart of decision-making. Strengthening leadership around these priorities won’t just unlock competitive advantage - it will help define the region’s place in the next chapter of global leadership.
This first appeared on CNN Business.
