What a difference a year makes in Saudi Arabia

High-profile IT executive visits demonstrate a global commitment to KSA’s growing ICT sector as the quest for inward investment continues.

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By  Stuart Wilson Published  April 9, 2007

|~|exitpageksa200.gif|~|The underlying conditions and macroeconomic factors are all in place to drive the future growth of the Saudi ICT sector.|~|What do Microsoft’s Bill Gates and Cisco’s John Chambers have in common? Agreed, they’re both not short of a few Riyals. However, on a more serious note, they have both paid a visit to Saudi Arabia during the last year, and have pledged significant investment to continue building up operations in the Kingdom. This level of commitment from A-brand vendors highlights the growing importance of the Saudi Arabian market, not just in the context of the Middle East, but also on the global ICT stage. IDC reckons that 2007 will be a year of ‘hyperdisruption’ in the worldwide IT market as IT vendors embrace new business models to open up pockets of growth. With global IT spending expected to climb a modest 6.6% in 2007, IDC also believes that IT vendors will adopt new technologies and cross traditional market boundaries. The analysts at IDC also contend that with moderate IT spending growth on a global level, 2007 will witness a sustained focus on fast growing emerging markets. While BRIC (Brazil, Russia, India, China) markets will continue to drive global growth, IDC reckons that a new group of ‘beyond BRIC’ regions will show their potential as the next hot markets. These ‘beyond BRIC’ opportunities will be greatest in the emerging Asia countries, Latin America’s southern cone, the Middle East and North, East and West Africa. Saudi Arabia currently sits at the very heart of the ‘beyond BRIC’ opportunity in the Middle East, and the market has now reached a tipping point that bodes well for the long-term development of its ICT sector. Organisations such as the Saudi Arabian General Investment Authority (SAGIA) are working flat out to dismantle the barriers to inward investment that previously existed in the Kingdom. In total, Saudi Arabia wants to attract some US$80 billion from external investors and is establishing four economic cities to achieve this goal. SAGIA has a strategy that will position the Kingdom among the top ten countries in the world in terms of competitiveness by 2010. Trade shows such as GITEX Saudi Arabia play a pivotal role in allowing the Kingdom to fulfil its massive growth potential. The event provides a unique opportunity for indigenous Saudi Arabian companies to form business relationships with international vendors and service providers looking to tap into the Kingdom’s ICT sector. Saudi Arabia is entering its own ‘perfect storm’ as far as the development of the ICT sector is concerned. The underlying conditions and macroeconomic factors are all in place to drive the future growth of the sector. The spending power exists, the appetite for change is now in place, and there is a young population willing and ready to develop the necessary skills required to drive ICT development forward. For too long, Saudi Arabia has occupied a position on the periphery of regional ICT development in the Middle East, seemingly destined to act as a consumer of IT rather than developing its own indigenous skills and technologies. That now looks set to change and international vendors and service providers need to sit up and start taking note. There is still some way to go in terms of streamlining the ease of doing business in Saudi Arabia, but positive steps are now being taken. The recent changes to IT import rules will reinvigorate the role of in-country partners within Saudi Arabia and lessen the importance of external players that sit outside Saudi Arabia’s national boundaries and attempt to push products and services into the Kingdom. Saudi Arabia has undergone significant change in the last year and this process will accelerate even further during 2007. The Saudi Arabian ICT market is now too significant for any serious company to ignore and GITEX KSA 2007 will reinforce this fact. ||**||

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