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ICT Sector in GCC Flourishes on Back of Heavy Investment & Aggressive Strategies for Growth

Internet of Everything, ICT sector in GCC

GCC nations are steadily rising up global ICT rankings that indicate how well each country’s economy is positioned to grow and benefit from the oncoming wave of the knowledge economy, ‘Smart City’ initiatives and tech innovations.

Qatar (23), UAE (25) and Bahrain (29) are ranked inside the top 30 of the World Economic Forum’s 2013 Network Readiness Index (NRI). Saudi Arabia lies 31st, Oman 40th, while Kuwait lags further behind in 62nd place.

Conducted on an annual basis, Qatar and the UAE have improved their NRI rankings most among the GCC nations, moving up from 28th and 30th place in 2012, respectively.

The World Economic Forum’s NRI rankings are a globally recognised assessment which measures a country’s ICT infrastructure, and the usage of ICT among major stakeholders, including individuals, business, and government.

The steady trajectory of GCC countries up NRI global rankings is tremendously encouraging for not only tech companies operating in, or seeking expansion into, the region’s strengthening ICT sector, but all industries which rely on advanced technology to create, connect and achieve greater efficiencies. Consider these two paragraphs taken from the World Economic Forum’s NRI study, which contextualise the strategic importance of NRI trends:

“As the world transitions into what we call the Internet of Everything (IoE) – the intelligent connection of people, processes, data, and things – only the networked readiness of countries will dictate where the IoE will take hold and who will reap its benefits.

The IoE and intelligent networking will impact all sectors, creating opportunities for people, businesses, and countries. An intelligent network will be the driver of the next round of innovation, productivity enhancement, and employment.”

 

Heavy investment by GCC governments in the ICT sector is set to continue, enhancing an already world-class platform of infrastructure, incubation of tech innovations and manufacturing of hardware that will spur further growth in telecoms, media and information technology.

Let’s look at some figures coming out of research and analysis into the Gulf’s ICT market.

“The ICT sector in the Middle East represented 5.9 percent of regional GDP and a $81billion value in 2010; with a coordinated effort from stakeholders, it has the potential to reach $173billion and 7.5 percent of GDP by 2015.”
Booz and Company, 2011

“During 2003-2010, ICT spending in the UAE has grown at a CAGR of almost 19 percent to reach a value of $12billion. We forecast ICT spending in the GCC will reach $318billion over the next five years (2011–2015). About 50 percent of this amount will be accounted for by Saudi Arabia, followed by the UAE and Qatar. ICT spending for the period 2013-2015 is expected to be about $40billion in the UAE.”
Kuwait Financial Centre (Markaz)

“The ICT market in the GCC is expected to grow at a rate of approximately 8.6 percent from 2010 to 2015. Software is expected to grow at 10.3 percent over the next five years, while hardware is expected to grow at 7.1 per cent.”
Business Monitor International 2013

“ICT spending in the Middle East will top $96billion in 2014. The region’s spending will place it as one of the top three fastest-growing IT markets in the world. Public sector investments to improve government services, education and health care will be the main drivers for growth. The numerous Smart City projects in the GCC in particular will increase machine-to-machine connections by 19 per cent to reach $224million.”
International Data Corporation, 2013

“Dubai’s Smart City initiative will leverage the Internet of Everything to become one of the world’s most connected and sustainable Smart Cities – in time for Expo 2020. Dubai joins a growing global Smart City movement, with Frost & Sullivan estimating a global Smart City market potential of $3.3trillion by 2025.”
Cisco, 2013

ICT Developments Powering Growth in Abu Dhabi, Dubai and Qatar

 

Global Chipmaking Industry in Abu Dhabi

Abu Dhabi has made significant recent investments as part of its vision to become a major player in a $20billion global chipmaking industry. State-owned Advanced Technology Investment Company (Atic) is building an advanced technology cluster to manufacture semiconductors and attract other semiconductor companies into the region. In 2009, Atic invested $1.4billion in partnership with US company Advanced Micro Devices to create a manufacturing division, Globalfoundries. In 2010, Atic paid $1.8billion for a majority stake in Chartered Semiconductor of Singapore, which elevated Globalfoundries to the third-largest contract chipmaker in the world.
FT

Dubai’s ICT Outsourcing Drive

Dubai is seeking to become a leading ICT services outsourcing centre, reaching far beyond the simple answering of phones and helpdesk support for companies, but also encompassing IT operations and infrastructure management, server consolidation and Internet services. Dubai Outsource Zone (DOZ) began operations in 2006, and now hosts more than 100 firms that employ some 7000 staff. DOZ offers tax-exempt status, allows for full ownership of their business and 100% repatriation of capital. It also has the advantage of being integrated with Dubai Internet City (DIC) and other state-backed developments aimed at supporting the ICT industry at all levels.
Competitiveness of the ICT Sector in the Arab Region, United Nations 2013

Qatari Investment Sows Seeds for Growth

In Qatar, the government’s goal is to create a competitive knowledge-based economy through its five-year National ICT Plan, which aims to double the ICT workforce and the ICT sector’s contribution to the GDP; the government will invest more than $1.7billion to advance this digital agenda by 2015. The booming technology sector has grown at an average rate of 17 percent a year for the last five years, to a total value of approximately QAR 15.5 billion in 2011, which represents around 1.6 percent of total GDP in Qatar, up from 1.2 percent in 2008, and includes more than $300million in investments from global firms such as ExxonMobil, GE, and Microsoft.
Competitiveness of the ICT Sector in the Arab Region, United Nations 2013

Arabian Gateway is an event designed to assist international ICT companies to expand into the MENA region, using the UAE as their gateway. Backed by Dubai FDI and Dubai Chamber of Commerce, and with local regional delegates actively looking for partnership also present, the event offers a high level of privileged networking and introductions. Learn more about Arabian Gateway and its comprehensive program agenda here.

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