Unlocking potential

There is a lot of potential in the region for progress in ICT believes Gartner Consulting vice president Tony Murphy, but the region needs to address some urgent issues first

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By  Caroline Denslow Published  June 26, 2005

|~|main_gartner_interview.jpg|~|Tony Murphy of Gartner Consulting met with leading companies in the private and public sector to discuss different perspectives of the IT sector in the Arab region.|~|In a recent visit to Abu Dhabi, Tony Murphy, vice president, Gartner Consulting, met with some of the leading companies in the private and public sectors to discuss different perspectives of the IT planning process and IT knowledge transfer in the region. According to Murphy, there are a lot of opportunities for the Arab region in the ICT sector, and these are being driven by factors such as the large-scale Arabisation of software and the fast rate in which the local internet communications technology sector has been growing. However, he also says that there are some urgent issues that the region has to address first before it can realise its hidden potential. In this interview, Murphy lists what he thinks are the specific challenges that the Arab region faces, and the roles that governments and private companies have to play to resolve the problems. How do you find the state of the ICT industry in the Arab region compared to the rest of the world? There’s no doubt that it is lagging a bit behind where it should be. For the most part, the Arab region is not keeping pace with the western world and a lot of the Asian countries as well. The Arab region is well behind in things like ICT-related jobs, creating IT companies, creating innovative IT-related technologies, and in selling IT products and services internationally. That’s almost non-existent in the Arab world. In comparison, in my own country of Ireland we export US$40 billion worth of ICT products and services every year. We are only a population of 3.5 million people and I would say that is literally 20 times what the whole Arab region exports. In that sense, the region is behind where it should be. What do you think is hampering the region’s growth? I think there are a number of problems. One of the issues is that in many Arab countries you’ll find that there’s a structure whereby there isn’t a highly competitive or open economy. A lot of people make a lot of money by being intermediaries. There isn’t the same incentive to invest and to take risks in developing and deploying advanced IT. In the Gulf region it’s too easy for well-connected people to make a lot of money without being innovative or taking risks. That’s one of the key problems. There are favoured people and that tends to undermine the drive to be innovative and competitive because if you feel that you can provide the best and most cost-effective solution and yet you are not going to get the deal, it’s self-evident that you are not going to put in the effort. Part of the problem is culture, there’s no doubt about that. There has to be some sort of cultural change, which I see happening particularly in the UAE. There has to be some cultural change whereby innovation is rewarded and contracts are rewarded purely on value and quality. There has to be more of a focus on IT and training in schools. Innovation and entrepreneurship is very important and I see this happening in Zayed University for instance where they have actually created a faculty of entrepreneurship. This is a very welcome development. What opportunities do you see then for the Arab region? There are a lot of opportunities for the region. However, not too many companies take a pan-Arab approach to things. They tend to be more country-specific. What they should really do is to look at opportunities on a regional basis. For example, there are opportunities in customer support services for Arab countries. Right now the support services are very heavily based externally, especially in terms of call centres. There could be more being done in that. There are a lot of business opportunities with technical help desks or call centres, specifically those for Arabic-speaking customers. There’s an opportunity to leverage the Arabic dimension of it. I think the Arabisation of packages is also another business opportunity. At present most of these are being largely undertaken in Europe. There are a lot of localisation companies there that are working on Arabising software packages. And if you look at the World Wide Web, there’s very little Arabic content out there. If you look at it in terms of the number of Arab-speaking countries in the world, it is in complete disproportion. I think there should be a lot more effort put into developing web content. Again there are a lot of business opportunities there. It all comes back to the fact that there has to be an open economy, there has to be reward for risks, there has to be entrepreneurship, there has to be innovation, and the way most Arab countries and societies are structured now, that is not happening at all to the required degree. What needs to be done? What is needed is a comprehensive strategy and a consistent strategy that is driven from the top and is driven consistently from the top. Another problem I find in the region is that people in leadership positions are very interested in high profile and dramatic initiatives, such as the biggest in the region, the first in the region. Success is actually derived from an awful lot of slow, non-glamorous integrated projects. All too often the latest fad is chased. And when you do that you’ll lose track of the whole thing. I work with a number of governments now in the region and I can see the temptation of people to do that. You are working on a good comprehensive plan and then something comes up, like some new technology, and they work towards chasing that, which isn’t the way to do it. A huge amount of work needed is unglamorous. You’re integrating technologies, you’re training people, and you’re working on integrated education and training programmes. You are putting in measures to bridge the digital divide, you’re putting in things like guarding intellectual property rights, you’re opening your economy to competition, and you’re taking away from favouritism in contracts. You have to work on all these things at the same time. They are all integrated. If you look at Ireland, we invested massively in education in the mid-70s and we focused on two areas: one is computers and electronics, and the other is on pharmaceuticals. We built up a huge reservoir of talent and ability and educated people in that and then there was a consistent focus on developing those sectors within the country. You had the appropriate economic environment where you reduce red tape, you make things tax efficient and you didn’t stigmatise business failure, all of which we did then, and I think this would apply in the Arab world. What we also looked at is our telecommunication infrastructure. We encouraged research and development. We encouraged international marketing. In other words to succeed you need a very comprehensive integrated and consistent strategy. These are the three words I would suggest. Who should initiate the change? I think governments have to initiate the change because governments are very powerful in the Arab region. The governments have to set the stage. If you think about all those things that I was talking about, all those things are dependent on government action, at least initially. If they set the stage where people can innovate, they can be competitive, they can export, they know that they are going to compete for a bid it’s going to be a level-playing field, all of those things they can do that. Yes, government has a huge role, a central role, especially at the beginning, to set the whole process going and to start a level playing field that they require. What’s good about the region is it has very strong governments and strong leadership. In the Arab region there is strong leadership who can say, “This is the way we are going to do it”, which can be seen in the case of Abu Dhabi and Dubai. That way you can actually achieve an awful lot. What they need to do is to have a comprehensive, consistent and integrated strategy. They need to show strong leadership. They need to create a level playing field for competition. E-government can be a tremendous support for all of this because what e-government does is that it deals with companies, and individuals have the opportunity to develop their skills, develop their services, develop their products and a lot of these things can be exported. In Slovenia, for instance, they did some work for e-government and that has been turned into a product by the company and exported successfully to many regions. What can the private sector do? Throughout the region a lot of multinational companies will come in, they’ll put in a big office, they’ll put their sign over the door, but they do comparatively little other than sales and service. That’s useful but it’s not really calculating down or contributing to the economy in terms of creating an awful lot of extra value and in terms of creating an ICT sector. Of course, they are good in terms of implementing it and providing material, but what the region needs is jobs related to ICT where those companies can set up R&D or manufacturing as the case may be.||**||

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