Qatar urged to build 'hidden champions' beyond oil, gas

Qatar should cultivate "hidden champions" — small, specialized firms that lead niche global markets — to diversify its economy beyond oil and gas, according to leading economist Prof Ha-Joon Chang. These firms can generate high global market share in specific products or technologies without the massive production volumes typical of industries like automobiles.

Prof Chang, a board member of Qatar Foundation and research professor at SOAS University of London, argues that such economic diversification is crucial for Qatar due to its heavy reliance on oil and gas revenues. He describes hidden champions as small to medium-sized companies employing a few hundred to a few thousand people, with annual revenues ranging from $1bn to $2bn.

Such companies, he explains, can dominate a particular component or technology without the scale required in larger industries. For Qatar, possible diversification paths include petrochemicals and other sectors leveraging existing capabilities, as well as developing companies in pharmaceuticals, plastics, advanced materials, and plastic electronics.

The economist also suggests Qatar could build on its energy sector expertise, such as oil-platform construction and drilling technologies, to create new industries like solar and wind power. Prof Chang urges Qatar to avoid narrow-minded diversification efforts, citing Finland's Nokia as a cautionary tale of over-reliance on a single successful company.

He emphasizes the importance of Qatar's energy expertise as a foundation for building a broader, more resilient economic base through specialized capabilities.