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Over the years Dubai has cemented its place in the world as the ultimate destination for luxury, shopping and entertainment. Now, with the UAE government’s foresight and vision, Dubai has gained a spot as one of the world’s most desirable destinations.
Every year the number of foreigners that are investing in Dubai is increasing. The rise in foreign investment has given birth to multiple business opportunities and further increased number of business setup in Dubai.
Following are some of the reasons that will emphasize and explain to you why investing in Dubai in 2020 is a sensible move for you:
1) A Flourishing Economy:
Dubai has completely transformed itself. The journey from an economy that was totally dependent on oil to an economy that is now the hub of international business is an awe-inspiring tale.
Thanks to the UAE government’s policies, the region is now primarily focused on its non-oil sector. Dubai’s business sector has attracted over 21.6 billion dollars in foreign investments alone.
That has boosted its GDP positively at the moment it is 2.9% and is predicted to grow dramatically in the upcoming years. Hence, Making it a safe haven for investors to start a business in Dubai with minimal chances of failure.
2) Numerous Business Opportunities:
Because of the high influx of investment that is pouring in from all sides in Dubai. The city offers immense business opportunities to anyone looking to start a business.
From freelancers to an entrepreneur to small business owners, all are welcome to transform their business ideas into a reality.
Even seasoned business owners will find a business opportunity too lucrative to pass up. UAE has slowly transformed itself into land suitable for investment. It currently offers multiple industries ranging from retail, tourism, media etc. for entrepreneurs to establish business setups in Dubai.
3) Various Locations:
The UAE, including Dubai, offers several attractive locations to set up a business. These locations comprise of Mainland, Free Zones and Offshore. Moreover, all of these locations have specific characteristics that make them suitable for a certain type of investors and less suitable for others. Therefore, business owners need to be clear about the business idea before starting a business in Dubai.
4) Incentives Launched by the Government:
The government of the UAE launches numerous incentives every year firstly, to capture and seize the attention of foreign investors to continue investing in Dubai.
Secondly, to boost and uplift its economy. The government has executed its vision 2020 with absolute success as it has carved out business opportunities in both the private and government sectors. Furthermore, the Smart Dubai project has led to immense capital investment in Dubai.
Dubai government is said to launch 130 initiatives in the coming six months to entice foreigners in setting up a business in Dubai.
5) Hundred percent Return on Invested Capital Ensured:
Every business owners worst nightmare is the failure of the business. What follows is the tedious and painful process of liquidation and reclaiming of property etc.
For that reason, the Dubai government has made this process easier and quicker for investors by allowing complete freedom. The government is providing 100% repatriation on the invested capital, and total profit earned. This move is drawing more business owners to invest in Dubai.
6) Minimal or No Personal Tax:
While launching a business in a foreign country, the thing that most concerns the business owners and entrepreneurs alike is taxes.
Business professionals tend to shy away from a region that has rigid and expensive taxation policies. The Dubai government to gain the interest of international investors to come and invest in Dubai has lowered its taxes. The business setups in Dubai don’t have to pay any personal taxes
7) Access and Exposure of the International Market:
Most beneficial manoeuvre for any company is easy to access to a global market. By choosing to start a company in Dubai, you can give your company a head start and provide it with exposure and access to the worldwide market.
This easy access will only help in growth and your business. And it can also aid with its expansion in other emirates in the future.
You can open a branch office in Dubai to expand your business further.
8) Dubai Expo 2020:
With the Forthcoming Expo 2020, the world has its eyes on Dubai and is very interested in investing here. The Expo 2020 is dubbed to be a game-changer that is expected to attract more than twenty-five million global visitors.
Multiple investment opportunities involving multinational partnerships are expected to happen due to this event. The Expo mainly focuses on uplifting sole proprietors, SMEs, budding entrepreneurs, and start-ups functioning in Dubai.
In conclusion the Expo 2020 brings business opportunities that are worth investing in.
So in a nutshell, we have elaborated the main reasons as to why you should invest in Dubai in 2020. If you are seeking a promising investment platform for your business setup, With the Forthcoming Expo 2020, the world has its eyes on Dubai and is very interested in investing here.
The Expo 2020 is dubbed to be a game-changer that is expected to attract more than twenty-five million global visitors. Multiple investment opportunities involving multinational partnerships are expected to happen due to this event.
The Expo mainly focuses on uplifting sole proprietors, SMEs, budding entrepreneurs, and start-ups functioning in Dubai. Then you should look no further as Dubai is a land filled with business opportunities. The best option for optimum growth of your business setup is in Dubai.
To capitalize on the ultimate benefits presented by Dubai, it is advised that you hire business setup consultants who are well-versed in the business setup process.
KWS Middle East is the premier example of business setup consultants in Dubai.
They have helped countless clients in incorporating their businesses in Dubai and the rest of the UAE.
Our business consultants are talented and well-skilled to guide you through the treacherous path of company formation.
source: kwsme
Increase in Business licenses in Dubai reflects the emirate's attractiveness despite regional challenges
30 Jan 2020Nearly 38,400 new business licences were issued in Dubai in 2019, a record growth of 90 percent compared to the previous year (20,129), Dubai Economy has announced,
Dubai Economy said a total of 184,437 jobs were created, adding that the figures confirmed that the emirate’s economic competitiveness and its ability to attract investors to grow and expand their businesses has been further strengthened in 2019, as reported by Arabian Business.
According to a recent report by the Business Registration and Licensing sector at Dubai Economy, 38,377 new licences were issued in 2019 while the past year also saw a decrease in the number of licences cancelled, from 5,037 to 4,949.
Dubai Economy said that the recent Foreign Direct Investment Law contributed to attracting and encouraging foreign direct investment to Dubai’s economic sectors and targeted activities.
Dubai Economy added that it has opened new horizons for businesses in Dubai by restructuring economic activities, with 50 commercial activities and 35 light industrial activities converted into professional activities.
"This, in turn, allowed investors to acquire 100 per cent ownership, and motivated new investors to choose professional licenses and Dubai as a destination for investment in the region.
The introduction of the Instant Licence and the DED Trader licence were also part of the enhancements to attract new businesses," it added, according to Khaleej Times.
The preparations and countdown to Expo 2020 Dubai have also contributed to attracting a large number of hospitality companies, restaurants, hotels and supply companies to invest in the city, it said in a statement.
Companies in Dubai were more upbeat around future output predictions, with the level of sentiment improving to a four-month high.
Panelists in the survey often noted hopes of an improvement in economic conditions in 2020;
Overall, 324,773 business registration and licencing transactions were recorded in 2019, while the rental value of units leased to companies in Dubai amounted to AED26.2 billion, it added.
According to its report, new business licences last year created a total of 184,437 jobs.
"It allowed for an increase in the number of investors, which has led to more companies now setting up business in the emirate.
The FDI Law also provides the framework for attracting foreign investment in various strategic sectors to build a globally competitive economy based on knowledge and innovation," according to the statement.
source: ameinfo
For the second year in a row, Egypt has topped the European Bank for Reconstruction and Development’s (EBRD’s) annual investments with new commitments of €1.2 billion in 26 projects in 2019 after €1.1 billion in the previous year.
Continuing its support for the southern and eastern Mediterranean (SEMED) region in 2019, the Bank made €1.8 billion of new investments in 53 projects of which 72 per cent were in the private sector, while 40 per cent were in the green economy. This builds on €2 billion of investments in 50 projects in the previous year.
In Jordan, the Bank invested €87 million in nine projects which included the remediation of a contaminated lagoon east of Russaifa, a landmark project that will help clean up the lagoon and restore the link between the original watercourse upstream of the Wadi Marka catchment area and its downstream locations.
In Lebanon, the EBRD continued to support the competitiveness of the private sector with the investment of €164 million in three projects.
2019 also saw the opening of a third EBRD office in Morocco in Agadir, which confirmed the Bank’s commitment to developing the economy and promoting regional integration.
Investments in the country reached €204 million in 14 projects last year.
In Tunisia, the Bank invested €177 million through 11 projects in 2019 including a €45 million loan to Société des Transports de Tunis (Transtu) to enhance suburban train services between Tunis and La Marsa.
In the West Bank and Gaza, the Bank financed the first Palestinian employment-development impact bond to address high levels of youth unemployment providing professional training for more than 1,000 young Palestinians.
The Bank financed an unprecedented 452 individual projects, compared with 395 a year earlier.Financing exceeded €10 billion for the first time, rising to €10.1 billion from €9.5 billion.
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. It combines investments with policy dialogue and, through activities like its Community Initiative, also reaches out to support local societies and knowledge about EBRD countries.
source: euneighbours
Unless you’ve been living under a rock, you are sure to have heard of artificial intelligence (AI) and machine learning (ML): it is the current buzzword, and every technology company worth its salt talks about how AI is going to transform everything.
The strange thing is that most business leaders, especially in consumer businesses, claim to be excited about AI, but they will be hard-pressed to give a tangible example of how AI has been used in their business, or what difference it has made to business performance.
So, is this all just hype, or is there some real impact that AI is going to have on businesses? If you think about your everyday life, it is almost certain that AI-based technologies are an integral part of your everyday experience.
See content and posts that you like on social media? Powered by AI algorithms.
Talk to your smartphone assistant to search for answers, or set a reminder? AI again. Order food on a food aggregator app, and chat with customer support? You’re likely talking to a machine for the first few minutes.
If you watched the latest Google I/O, you’d have seen the new Duplex AI, where it can have whole conversations with real humans, and do things like book appointments for you.
AI is slowly but surely transforming the way consumers experience the world by allowing for personalized and easy experiences.
The algorithms are able to gobble up the vast amounts of data created every second, and use it to predict and take decisions on what is most likely to be relevant and appeal to different people.
This is leading to consumers increasingly living in an “easyverse,” an easy universe of connected and seamless experiences.
What’s more, AI and ML gets better at its job as it learns from data and interactions.
For any business to survive, being able to be part of this easyverse, and provide consumers with the experience they have come to expect is critical. To be able to compete, deploying AI is going to be mission critical.
So, what are the areas where AI is likely to have maximal impact in the short-term? While there are several long-term bets being made, from self-driving cars to cyborg technology or robots as friends, here are a few of the tangible competitive advantages consumer businesses should be looking for immediately.
1. Quicker, better insights
Say a business wants to know why sales are down the previous week. The traditional way would have taken a team of analysts a few days to come up with answers, and the accuracy of these answers would be limited by what questions have been asked. With AI, tens of thousands of questions can be processed, and the impact of these factors on the business can be assessed in mere seconds.
It can throw up surprising insights on what action is likely to have most impact on the business. This can be an incredible advantage in a fast moving and evolving environment.
2. Personalized and connected experiences
AI can learn from your consumer’s behavior, and make predictions of what they may like.
This allows for the most relevant products and recommendations to be served up.
In various studies, it has been proven that personalization improves conversion by as much as 30%-50%. Think big marketplaces like Amazon, where each customer sees a different set of products and recommendations based on what is most relevant.
This is now easily possible on your brand website!
3. Better, 24x7 customer service
Deploying AI as chatbots and using natural language processing algorithms as call agents means that they can do a credible job of handling and resolving the vast majority of routine queries that typically hit customer service centers. This allows for quicker resolution, 24x7 service, lower cost and, of course, happier customers!
4. Automation, personalization of campaigns, and marketing ROI
Marketing is typically an area with a lot of spend and where it is difficult to keep track of return on investment (ROI).
As American marketer John Wanamaker famously said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” With AI tools, it is now possible to manage campaigns on an individual level, with each consumer being put on their personalized lifecycle, with messaging that is almost unique, tailored to their unique behavior and needs.
It is also possible to track thousands of signals across the marketing lifecycle, both in traditional and digital media to continually optimize the marketing mix and improve sales performance and marketing ROI. Indeed, the holy grail for any marketer!
5. New powerful streams of data from offline stores
The past decade has been a story of online marketplaces and e-commerce stealing consumers away from offline retail.
While convenience and easy experiences are an important factor, with the advent of omni-channel retail, offline retailers are able to hold their own and, in fact, have an edge in providing consumers with a great experience.
A big gap however, continues to be the amount of data available, and how it can be used to create personalized experiences, and to optimize the business. In the online world, you know who is visiting the mobile site or app, what they are looking at, how much time they are spending, and so on and so forth. This was typically information that was just not available offline.
Now with AI tools including computer vision and natural language processing, it is possible to anonymize and track visitors to store, generate style profiles, track trends, identify hot zones and in effect create an offline clickstream.
This data can have profound impact on the consumer experience and business results- with sales impact of upwards of 10%!
These are just a few of the key areas where every consumer business should be looking to deploy AI-powered solutions so as to be able to win with their consumers.
There are several reasons as to why, a lot of businesses are not able to make meaningful progress in driving digital transformation that delivers results, let alone deploying AI within the business; but that is a conversation for another time!
source: entrepreneur
Several ways in which innovation in AI and machine learning (ML) will change our lives in the next five years.
If there is one technology that has become the buzzword of this decade, it would be artificial intelligence (AI).
In the beginning of 2010s, consumer natural-language processing (NLP) allowed us to talk to our phones and control smart home appliances reliably. At the time, a lot of people expected NLP to explode in other domains, but it never really materialized, either because of poor implementations or a focus on other types of development.
However, over the next decade, we can expect to see NLP put to use in complex software to lower the barrier to entry. For example, customer relationship management (CRM) software, which is crucial for any business, is finding higher adoption among salespeople thanks to conversational AI.
The application of AI in different softwares also helps in identifying repetitive tasks and automating them, thereby improving employee productivity.
With AI, business applications will be able to answer questions, or help users navigate interfaces, and cloud vendors will need less support personnel to manage their load.
An emphasis on diversity in development will create a landscape where NLP is better at understanding different accents and speaking styles.
When more businesses yield the benefits of NLP-powered analytics and conversational interfaces, the demand for single-vendor solutions will increase. Once C-level executives realize they can ask AI assistants to generate reports for them on the fly, they will want this functionality to work across their business, not just in one department where they've rolled out new technology.
The organizations that will be most successful using AI over the next decade are the ones implementing single-vendor technology platforms today. If data is scattered in applications using different data models, it's going to be difficult to work with.
But when all data is on a single platform, it's much easier to feed it into a machine-learning algorithm. The more data that's available, the more useful the predictions and machine-learning models are going to be.
There exists a vast scope of innovation in AI and machine learning (ML), which we can hope to see in the next five years, in the following ways:
Hyperpersonalization Hyperpersonalization will increase productivity for business software users. This decade saw the rise of algorithmic (rather than chronological) social media timelines, which increased usage.
For business software, there is a huge opportunity to create interfaces that intelligently direct the user's attention.
Imagine a CRM that learns from an organization's sales history, and guides reps to work more productively based on their work habits.
Ubiquitous AI data cleansing A lot more areas will implement AI data cleansing. Smaller organizations will begin to expect AI functionality in things like spreadsheets, where they'll be able to parse information out of addresses, or clean up inconsistencies. Larger organizations will benefit from AI that makes their data more consumable for analytics or preps it for migration from one application to another.
Auto-tagging to become the norm Today, smartphones can recognize and tag objects in photos, making the personal photo library much more searchable. Soon, we will start to see business applications auto-tag information to make it much more accessible.
Today, business owners can find their top customers in a CRM by running a report, and sorting by revenue. In the next five years, they will be able to search "top customers," and the CRM will know what they are looking for.
source: entrepreneurntrepreneur
Recipients also include UAE-based Venture Capital firm Global Ventures
The Abu Dhabi Investment Office (ADIO) has invested 60 million UAE dirhams ($16.3 million) in a new batch of startups and fund managers through its Ventures Fund.
The recipients, according to ADIO, include: Securrency, TruKKer, Sarwa, YACOB and Okadoc. These startups are innovation-focused companies that are either based in Abu Dhabi or expanding into the emirate.
ADIO also signed its first investment in a Venture Capital (VC) firm, UAE-based Global Ventures, it said in the statement.
The VC firm received funding through the Ventures Fund’s New Fund Manager Programme, which matches every dirham raised by the VC in the private market.
The company is a growth-focused VC investing in revenue-generating enterprise technology companies that can scale and create impact in emerging markets.
Tariq Bin Hendi, Director General of ADIO, said: “The Ventures Fund was created to deepen Abu Dhabi’s innovation ecosystem and ensure big thinking is not constrained by limited capital.
Once a startup is operational, Abu Dhabi is safe ground for innovation and a place where entrepreneurs can confidently take commercial and creative risks. ADIO is passionate about supporting entrepreneurs, we want to give startups the opportunity to become the next regional, or perhaps even global, tech success story.”
Ventures Fund opened in May 2019 as an initiative of the Abu Dhabi Government’s Ghadan 21 accelerator programme.
The fund is supporting the growth of Abu Dhabi’s startup and venture capital ecosystem by increasing access to capital and stimulating the number of high skilled jobs in the UAE capital’s growing technology sector.
source: zawya
As any startup will attest, agility and quick response to market demand is key to survival. The same can be applied to other stakeholders in the startup ecosystem.
Recently, the Middle East and North Africa’s capital cities have scrambled to establish entrepreneurship hubs and so the competition has intensified, particularly for the smaller nations whose budgets do not match the deep pockets of some of their neighbour’s.
In the midst of decrees and announcements, Bahrain has managed to establish a business environment that the Milken Institute believes will position the country as a “major hub for finance, technology and innovation”.
Since 2015, foreign direct investment (FDI) has increased from 0.2 per cent of gross domestic product (GDP) to 4 per cent in 2018.
The number of firms in the private sector has increased by 50 per cent alongside a 30 per cent rise in the number of jobs in the private sector according to data from the Labour Market Regulatory Authority.
According to Milken’s report, micro, small and medium-sized enterprises account for 30 per cent of GDP.
Fuelling this growth has been Bahrain's geographic position and its proximity to Saudi Arabia, providing easy access to the region's largest market.
But now that the Kingdom has embraced entrepreneurship and has pushed through several agendas and government initiatives to encourage foreign investment, Bahrain risks losing its competitive edge.
We spoke with Pakiza Abdulrahman, manager of startups at the Bahrain Economic Development Board (EDB), a government agency tasked with attracting investment and supporting private sector growth.
EDB’s Startup Bahrain initiative has been instrumental in encouraging entrepreneurship, but how much involvement should the government have?
Governments should play an enabling role and not lead the innovation agenda. We want to enable the ecosystem to sit together and collaborate and bring to the table the most important matters that we as regulators should fix and improve.
Bahrain is strategically positioning itself as a gateway to the global market, particularly for Egyptian and Mena-based startups.
We have very close proximity to the largest market in the Middle East [Saudi Arabia]. Our mandate is to diversify the economy, attract FDI and create jobs that are in line with the knowledge economy and Bahrain’s 2030 Vision.
Saudi is a huge market to navigate, it is easier to come in as a GCC-based operation. What we try to do in Bahrain, is to focus on incentives and benefits that are provided to startups setting up in the country.
We don’t have a freezone area, the whole country is open to 100 per cent foreign ownership.
As our strategic position with the East and West, we’re positioning ourselves for different niches.
What are these niches?
Fintech, IOT [internet of things], e-commerce, logistics. Game development and publishing has been something really big for Bahrain recently. The calibre [of talent] in the country is high, they’re bilingual, tech savvy, they know the culture of Saudi and the Middle Eastern market and we have high mobile penetration.
Where are the startups that set up in Bahrain from?
The majority of startups are coming from the UK, South East Asia, India, Singapore and the Middle East, from Lebanon, Jordan and Egypt. Companies from Saudi Arabia and Kuwait are also coming. It is 30-40 per cent cheaper to set up here than in the UAE. It is a 50:50 ratio split of Bahraini and resident founders of startups and foreign companies.
Amazon chose Bahrain to launch its Amazon Web Services (AWS), what impact has that had?
The Amazon impact has been huge, it gives testament to the strong ICT infrastructure in Bahrain, the connectiveness with other data centres globally, it gives testament of the eagerness of the government to move to the cloud.
We have a cloud-first policy, all government entities have to be on the cloud, that created huge hype in the country and pushed the private sector banks that were reluctant to go on the cloud.
It has also opened up a huge opportunity for local talent to be upskilled.
Saudi Arabia is embracing entrepreneurship, how can Bahrain maintain its advantage as a gateway to the country?
We’re a small market, we need to be very creative and strategic in the way we tackle this challenge. We have been doing so by opening up to global markets, empowering education among different sections in the ecosystem, whether it's youngsters or early retirees from government programmes with ideas and skills they need to be directed.
This is what we do at Startup Bahrain – we keep the momentum and rooting back to the single platform that gives you all of this – it is community driven we back it up and it grows as the community grows. We do a lot of roundtables to listen to the startups and try to shape up the market and shape up the regulation as they need.
Markets in KSA and UAE are huge and saturated as well, sometimes for South Korean companies and Asian and Arab-based companies, they find it hard to navigate.
At EDB, we handhold startups and accelerators throughout the whole process of registration, ensuring they come out of it with meaningful relationships and introduce them to key decision makers.
source: wamda
Technology startups incubated by the Badir Program for Technology Incubators and Accelerators, one of the leading initiatives of King Abdulaziz City for Science and Technology (KACST), closed 2019 on a high note, raising a record SR236 million ($62.93 million) led by venture capital firms, individual investors, private companies, and governmental institutions.
The total funding for startups increased to SR508 million ($135.47 million) from 2010 until the end of December 2019 across 184 deals, according to a statistical report compiled by the Business Incubators and Accelerators Company (BIAC), which manages and operates the Badir Program.
The report revealed that venture capital firms were the most active in terms of funding size, investing SR 203 million into startups, equivalent to 40% of the total amount of funding and investment, while private sector companies provided SR 168 million, 33% of the total funding.
BIAC report further disclosed that the total financing by individual investors amounted to SR 104 million, 20% of the total amount of funding, followed by government institutions who invested SR 35 million, 7% of the total investment volume.
The increase in investments reflects the maturing startup environment in the Kingdom of Saudi Arabia and the continued and growing interest of local and international investors.
Furthermore, the number of startups incubated in the Badir Program rose to 655 companies since inception until the end of the third quarter of 2019.
The Badir Program offers one of the most important national and innovative environments in the field of entrepreneurship.
The Program was established in 2007 by the King Abdulaziz City for Science and Technology, to support and provide opportunities for technology- and innovation-based business enterprises.
Nawaf Al Sahhaf, the Chief Executive Officer of BIAC, said: “As the startup environment is thriving in Saudi Arabia, we have seen more of the startups succeed in receiving significant investments from several investors.
The success of startups provides an incentive for encouraging and enhancing the entrepreneurship environment in the market."
When the Badir Program incubates a technological startup company, it facilitates funding by providing a platform by connecting investors and entrepreneurs through its annually-held "Projects Presentation Day" program.
A state-owned subsidiary of the Saudi Technology Development and Investment Company (TAQNIA) – owned by the Public Investment Fund (PIF) – BIAC operates and manages entrepreneurship support platforms, innovation and technology transfer programs.
It also offers project management and business support with specialized consultancy and training services.
Offering an array of services in over nine different cities in the Kingdom, BIAC operates and manages 10 incubators and 8 accelerators in various fields, most notably the Badir Program's 8 incubators in 7 regions.
In addition, BIAC manages and operates the Saudi Innovation Center for Water Technology Program; the Fast Track to Innovation Program; the Innovation Center for Industry 4.0; the KAMIN Program for raising industrial capabilities and enhancing the capabilities of small- and medium-sized industrial enterprises; the Industrial Establishments Accelerator; Haramein Technology Accelerator; Badir Accelerator, and the Inventions Transfer Accelerator.
source: saudigazette
Unencumbered by heavily customized legacy systems, Middel East enterprises may have a clearer path toward leveraging IT to overhaul how they do businesses than companies on other regions.
Is the Middle East lagging behind in digital transformation? To a large degree, it depends on which metrics are used to measure digital transformation, and your perspective on how far along enterprises in the rest of the world are on the path to fundamentally change how they use technology, human resources and business processes to improve their performance and value to customers.
Overall, investment in IT in the Middle East and North Africa (MENA) is growing, with spending in the region having been projected by Gartner to rise 1.8 percent to reach US$160 billion in 2019. Spending on areas of enterprise IT often associated with digital transformation is rising significantly, with sales of software as a service expected to jump by 25 percent during the course of last year.
Spending is expected to jump by 19 percent to reach nearly US$3 billion for CRM, and to increase by 12 percent to hit $1.2 billion for BI, analytics, and advanced analytics (including AI).
Despite the growth of SaaS in the region, MENA still falls below the global average for cloud spending as a percentage of the total enterprise IT budget. "They are six to seven years behind U.S. spending on cloud – some of that is lack of availability of hyperscale cloud providers, and we are also facing in this region a preference for on-prem," said John Lovelock, a research vice president at Gartner.
Cloud ERP, for example is still in the $300 million range for the region.
"It's a decent growth rate but not what we see in the rest of the world -- at a certain point we're going to need to see 100 percent to 200 percent growth rates to get cloud into the range of the rest of the world," Lovelock said.
Cloud spending is not a direct indicator of digital transformation, but the cloud does form part of the fabric that allows digital transformation to take place.
In the 2019 IMD Digital Competitiveness Ranking, only the UAE, Qatar and Saudi Arabia really featured, with the UAE placing 12th overall.
Digital transformation is a global struggle
While these statistics paint a picture of more work to be done, they also do not fully represent the global realities.
There is an assumption that enterprises in the rest of the world are well on the road to digital transformation, said Ahmed Hasan, global head of Customer Engagement Marketing at Spark44, a provider of content and community management, CRM, data planning and marketing services for businesses. "But in our experience, this is very much not the case.
Many other regions are struggling with synthesising digital transformation into meaningful valuable customer experiences or even into an operational efficiency."
Hasan adds that it is therefore in some respects an advantage to be a laggard in the area of digital transformation. He believes that "slow to adopt" regions can actually benefit from the experiences and realities faced elsewhere to identify transformation projects that are more likely to have a greater chance of sustained success.
The Middle East is better positioned for digital transformation than many other regions because it is not over-encumbered with complex legacy IT systems that have been heavily customised over time, according to Alan Pelz-Sharpe, founder of research and analysis consultancy Deep Analysis and author of bestseller "Practical Artificial Intelligence - An Enterprise Playbook."
"It is easier to leapfrog innovation when you have a fairly basic starting point tech-wise. Clearly Dubai is leading the charge in the Middle East; its Smart Dubai initiative, though very ambitious, has set the tone for others to follow."
Smart Dubai, the government entity entrusted with driving Dubai's digital transformation projects, already has for example a mature blockchain strategy, launched in early 2016, which has made the city a global leader in blockchain in government, with some signature projects such as DubaiPay, an online payment portal.
The Middle East is at various stages of the digital transformation journey, said Shady Fathalla, business Development Manager at Ciklum, a custom software development company headquartered in London with an office in Dubai. Fathalla explains that the Gulf Cooperation Council countries of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, are under pressure to diversify their oil-based economies and have announced several initiatives and directives to transform the societies and the governments.
Governments help drive digital transformation
Digital transformation is at the heart of many of the forward-looking initiatives put in place by the governments of the region, such as the Saudi Vision 2030, the New Kuwait 2035 Vision, the Qatar National Vision 2030 and the UAE's 2021 vision.
Fathalla believes that countries like the UAE and Bahrain are leading in terms of digital transformation, especially in the e-government and financial sectors, but Saudi Arabia, Qatar, Kuwait, Oman and Egypt are also taking remarkable steps forward.
"The Dubai Government – which is a pioneer in Government digitalisation – has announced its last paper transaction to be in 2021. What's more, the citizens themselves are also playing a big part of the Middle East's digitisation journey," Fathalla said. "As measured by digital consumer adoption, the UAE, Qatar, and Bahrain are among the top countries in the world when it comes to digital readiness, with more than 100 percent smartphone penetration and more than 70 percent social media adoption," Fathallla said.
Fathalla adds that the oil and gas industry in the GCC is looking at digital transformation as a priority to increase efficiency and create competitive advantage in the oil and gas market. The CEO of Abu Dhabi's National Oil Company (ADNOC), Sultan Ahmed Al Jaber announced last year that "Industry 4.0" will be at the heart of ADNOC business.
"For us Industry 4.0 is utilising data and technology to really transform our business, to make it more efficient, and to empower our people," explained Abdul Nasser Al Mughairbi, senior vice president, digital function, at Abu Dhabi National Oil Company (ADNOC), in an interview with CIO Middle East.
The Middle East, though, is still at a stage where it needs to import the skills required to make digital transformation possible from other places, with countries like the UAE, Saudi Arabia and Qatar being the major investors in digital transformation infrastructure and expertise, according to Bernado Jun, managing director of Spark44 Middle East and North Africa.
Culture can hold back transformation
"The Middle East is a diverse and geopolitically volatile region, with some markets lacking the infrastructure for digital transformation and other markets with the infrastructure but without the stability to have digital transformation at speed and at scale," Jun said.
"So, the region as a whole is lagging behind, although some countries are investing heavily with the ambition to be leading countries in digital transformation in the near future," he added.
One challenge holding back digital transformation is the way trust and honour function as cultural concepts in the Middle East, said Annalisa Nash Fernandez, an intercultural strategist at BecauseCulture, a consultancy focusing on cultural elements in technology and business strategy. "Trust is deeply rooted in long-term social relationships, like in Asian cultures, which is why influencer marketing has proven so successful in the region," Fernandez said. "Influencers have replicated values of trust and personal relationships in a digital context" in the Middle East, Fernandez said, adding that once enterprise leaders do the same, digital transformation in the Middle East will catch up to, and likely surpass other regions.
Deep Analysis' Pelz-Sharpe also believes that the biggest factors impacting the region are cultural and people-related, rather than technological.
"The Middle East has access to the same technology as the rest of the world, however there are skills shortages that impact the rate of change that is possible."
Interest in digital transformation grows
Interest in digital transformation in the region, though, has encouraged Ciklum to extend its services to the Middle East, bringing its global delivery model for software services to the region. The approach allows clients to select appropriate talent from its large resources pool for software projects, and is being used by Middle Eastern startups as well as regional incubators and accelerators to increase the scale of digital transformation, Ciklum's Gathalla said.
Cikulm's Fathalla says that while the gap between the Middle East's digital transformation and that of the rest of the world is shrinking -- mainly due to government investments -- the story is a little different when it comes to the private sector.
He explains that investment in digital transformation is not at the required level, and contribution to the overall countries' GDP by digital business is lower compared to those in countries considered as leaders in digitisation and digital economies. "But this will improve over the coming years," he said.
Spark44's Jun cautions that companies in the Middle East needs to find the right balance between importing expertise and growing it internally. He says it is easier to import expertise to show short-term results and to showcase your "transformation credentials" by proudly communicating that one is working with a world-class consultancy. "However, for companies to be competitive in the long term, they need to invest in also nurturing and growing the talent at a local level," he said.
"Transformation by definition is a continuous process and one cannot expect to find the best answer for one's company only from the outside," Jun added, saying that that CIOs needs to be more invested in the company's human capital growth plan, working closely with the HR department to fine-tune recruitment policies and learning and development plans, based on the key skills that the company will need in the longer term.
Digital transformation is being tackled at a governmental and structural level, but more needs to be done to encourage the private sector to embrace this change and to take advantage of the opportunity to leapfrog in terms of innovation through learning from other countries.
source: cio
The Middle East has realised only eight per cent of its overall digital potential, compared with 15pc in Western Europe and 18pc in the US, a top Bahrain government official has said.
According to Information and eGovernment Authority (iGA) chief executive Mohammed Ali Al Qaed there is a lot of room for digital growth in the Middle East and North Africa (Mena) region, where just 8pc of small and medium enterprises (SMEs) have an Internet presence, 10 times less than in the US.
“Only 1.5pc of retail sales in Mena are online, which is five times less than the US. Digital comprises 4.1pc of the Middle East economy and its contribution to GDP is half that of the US,” he said.
The official was speaking during the BBK Digital Economy Forum and Expo 2020 at the Four Seasons Hotel Bahrain Bay.
Highlighting the Bahrain government’s vision for digital transformation, Mr Al Qaed said the kingdom’s internationally acknowledged successes in attracting investment to its information and communications technology (ICT) industry is built on the back of robust legislation and infrastructure that it has spent years building.
This landscape has allowed for the application of modern technologies in a range of areas and for the development of skills required to implement them.
“Dynamic, competitive markets and an innovative private sector are what drive digital economies,” he said.
“Our goal is for the private sector to take the lead in researching and developing emerging technologies; identifying and supplying innovative solutions; and creating opportunities to improve export revenues. We also welcome their contributions in helping us create even more digital-friendly economic policies.”
The drive to digitalisation is led by the vision of His Majesty King Hamad to make ICT investment a pillar for socioeconomic growth in the kingdom.
The official asserted that the government has helped to encourage innovation and stimulate economic growth through the formation of an artificial intelligence (AI) and emerging technologies governance committee and the passing of laws protecting personal data and electronic transactions.
This is in addition to providing an open data portal and formulating a comprehensive AI strategy in 2020 to enhance government performance and productivity.
Highlighting the importance of digital tools in improving living standards, fighting poverty, protecting the environment, and enhancing the quality of health and education, he said digitalisation also has a key role in creating job opportunities, as each digital job can potentially have the trickle-down effect of creating two to four further jobs in other areas.
Mr Al Qaed also presented key findings from the United Nations Digital Economy Report, which showed that the digital economy now makes up between 4.5pc and 15.5pc of the gross world product (GWP).
The report also found that the US and China contribute 75pc of all patents related to blockchain technology, 50pc of the world’s expenditure on the Internet of Things (IoT), and more than 75pc of the world market’s public cloud computing.
source: zawya
