The Arab business world's ICT opportunity

The WEF defines competitiveness as the set of factors, policies, and institutions that determine a country's level of productivity. Competitiveness, in this sense, is graded according to nine pillars: institutions, infrastructure, macro-economy, health and primary education, higher ed and training, market efficiency, technological readiness, business sophistication and innovation. All these factors need to be in place in order for developing countries to rise to the next level of global competitiveness.

In the past decade, the Arab world has attracted the interest of a global audience by kick-starting a never-before-seen development drive across all these pillars. The concerted effort of local governments and local entrepreneurship, coupled with support from multinational corporations is propelling this region to the front of the pack.

The term ‘reverse globalisation' is becoming more common as established local corporations, such as DP World, Emaar and Emirates Airline are investing in more established foreign markets. Yet, observers sometimes forget how quickly these changes came about.

Challenges still exist but work is being done to address them. Attention now needs to be focused on innovation and business sophistication. Additional investment from public and private entities is required to boost education, health and continued innovation across all sectors. In business, investment needs to nurture local companies and young entrepreneurs that will then reinforce the ecosystem and support local champions. Innovation centres and research and development (R&D) labs should be encouraged directly by the government and backed with investment throughout the region. Recording the highest growth rate of internet usage access over the past six years is an encouraging sign that the Middle East is tackling this challenge effectively and with more dedication. Internet bandwidth increased by two and a half times from 2003 to 2004, and while the UAE has the highest internet bandwidth capacity across the Middle East, there is scope for much more.

 

The average ICT spend in the region, as a percentage of GDP, is more than two and a half times lower than the average global spend of 6%. In addition, less than 0.5% of the region's GDP is spent on research, development and innovation in comparison to developed countries' average of about 2.5% of GDP. The US$10bn pledged by HH Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE and Ruler of Dubai, towards a knowledge society is the latest example of a commitment that is strong and clear. This however, needs to be matched by multinational companies operating in the region. PC penetration is significantly below the world average; however, government and IT firms have been working together to set up government-assisted purchase programmes and changes are starting to become visible.

The foundations are there and the future looks bright as long as the visionaries that built it up are followed and nurtured. Investment in education is required to provide enhanced training and attract new students to ICT careers; measures should be considered to support and encourage Arabic software development and localised Arabic digital content; more ICT-related financial incentives should be put in place by various governments to promote R&D and innovation centres; and cross-regional knowledge exchange should be encouraged to facilitate the flow of information, allowing countries to learn from their peers and reduce the brain drain.

When all these measures are implemented, no one will be able stop the Arab business world's rise to the limelight.

Ferhad Patel is regional business manager, Gulf Countries at Intel.