Digital economy in the GCC region: Moving beyond Oil and Gas
Wednesday 10/July/2019 11:17 AM
By: Times News Service
As telecom providers in most countries of the GCC region trial 5G networks, we find ourselves in a new era of economic development. One that is experiencing declining GDP contributions from traditional economic sectors that have long been the pillars of national economies. Meanwhile, emerging sectors, such as digital economy, are gaining importance and leading to initiatives and activations that were unheard of before the Fourth Industrial Revolution.
5G networks make it possible to quickly transfer huge amounts of data, enabling cutting-edge technologies – like self-driving cars that require more than 100 GB of data per second to operate, or virtual reality that needs a high-speed broadband with reduced response time – to enter the mainstream. They help hone internet of things (IoT) solutions, allow users to broadcast high-definition videos, and power a whole new generation of video games and content.
With the imminent commercial launch of 5G networks, smartphone owners will be able to enjoy a significant boost in internet upload speeds. They can also look forward to an improved mobile app user experience in terms of downloading map content, software, games, virtual and augmented reality technologies, and other solutions that simplify people’s lives and enhance business performance. Meanwhile, tech companies will be able to utilize state-of-the-art technologies such as self-driving vehicles and AI applications that have the potential to create multibillion-dollar investment opportunities in the GCC region.
The GSM Association estimates that 5G networks will add US$565 billion to the global GDP by 2034 – an amount that equals the entire GDP of Sweden.
Countries of the GCC region have started deploying infrastructure and laying down legislative frameworks in response to these momentous tech developments in order to attract foreign investments in the rising digital sector. Their strategic plans – Oman Vision 2040, Saudi Vision 2030, UAE Vision 2021, Bahrain Economic Vision 2030, Qatar National Vision 2030, and Kuwait Vision 2035 – prioritize digital economy as a key driver of sustainable development. Decision- and policy-makers are now convinced that in the future, ideas will replace oil and gas in boosting economic growth. In a nutshell, innovative digital technologies are poised to change the way we live and do business.
The digital transformation in the GCC region is rapidly stepping up with the surge in the use of smart applications in government services and with the increasing implementation of the smart city concept. To keep the momentum going, we must adopt wide-ranging, bold reforms that will create an economy led by the private sector and governed by regulations that encourage innovation and promote investment in digital infrastructure.
Governments believe that upskilling individuals to keep up with the latest advancements in digital economy is the best investment for the future and the most beneficial way to leverage the capabilities of our youth in the post-oil era. This requires revamping our education systems with a focus on coding and technology.
According to the latest World Bank MENA Economic Update report, the foundations for a complete digital transformation in the GGC region already exist. Countries here boast some of the highest smartphone penetration rates globally. However, residents are more likely to use their devices to access social media than to start new projects. Nevertheless, the report mentions several rebound indicators related to the digital economy, including the rise of the Careem ride-hailing app from a startup to a billion-dollar company that has created thousands of jobs. Interestingly, in the labor-intensive GCC region that is a magnet for professionals from around the world, new digital platforms are now connecting employers to job seekers, offering professional training, and hosting startup incubators.
It is evident that the GCC region is ready to embrace its digital future. Our task now is to provide optimal conditions for digital growth. We need to equip our youth with the necessary skills for the new economy and remove any barriers to innovation. This will help millions of young people find gainful employment and, ultimately, drive sustainable economic growth in the region.