(MENAFN- Khaleej Times) Despite the accelerating pace of digital transformation across the Middle East, the region has only scratched the surface of its digital potential, experts say.
Estimates by Digital McKinsey show that the Middle East region's economy has realised only eight per cent of its digital potential. By comparison, Western Europe has achieved an estimated 15 per cent of its digital potential, and the US economy has captured 18 per cent. A recent report by Digital McKinsey also revealed that the digital market could add $95 billion per year to the Middle East's annual GDP by 2020.
In addition, a recent report by MicroMarket Monitor highlighted that the Middle East big data, business intelligence, and analytics market size is projected to grow from $5.09 billion in 2015 to $12.38 billion by 2020, at a CAGR of 19.4 per cent from 2015 to 2020. Factors influencing the growth of the Middle East big data, business intelligence, and analytics market include shift in the mode of deployment to IoT and cloud, emergence of mobile BI and domain-specific solutions, and rise in competition that demands simplified and enhanced data visualisation tools. Experts at SAP say that Middle East small and medium sized enterprises (SMEs) will drive the region's $12 billion business intelligence market. While SMEs comprise the majority of Middle East enterprises, they lag in digital technology adoption. Among SMEs in the region, only 18 per cent in the UAE are digital, and only 15 per cent in the Kingdom of Saudi Arabia.
"Small and medium businesses in the Middle East and North Africa need the right channel partner to succeed in the Internet of Things. Partners should have specialised training in new digital business models, especially across artificial intelligence, blockchain, and machine learning innovations," said Zakaria Haltout, head of Global Channels and General Business for the Middle East and North Africa at SAP. Several Middle Eastern countries have developed strategies to drive digitisation in recent years, including the UAE. As part of UAE Vision 2021, the National Innovation Strategy identified digital technology as one of the top seven primary national sectors. The strategy focuses on the development of smart cities, software, and applications including advanced technology in areas of global interest such as artificial intelligence, semiconductors, nanotechnology, and 3D printing, as well as the quick adoption of technology across various industries.
The McKinsey report noted that the future is promising. Consumer enthusiasm for digital suggests strong growth potential in the near future, as consumers are clearly primed and ready to embrace new digital offerings. It will be critical for the region to increase ICT patent applications and enhance infrastructure to improve its ICT supply and innovation performance.
Reports indicate that a unified digital market across the Middle East, and its 160 million potential digital users by 2025, could contribute up to 3.8 per cent annually in GDP. Digital can also have a positive impact on inclusion and poverty reduction, increase access to and quality of healthcare and education, and reduce CO2 emissions.-
Rohma Sadaqat I am a reporter and sub-editor on the Business desk at Khaleej Times. I mainly cover and write articles on the UAE's retail, hospitality, travel, and tourism sectors.Originally from Lahore, I have been living in the UAE for more than 20 years. I graduated with a BA in Mass Communication, with a concentration in Journalism, and a double minor in History and International Studies from the American University of Sharjah.If you see me out and about on assignment in Dubai, feel free to stop me, say hello, and we can chat about the latest kitten videos on YouTube.
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