UAE Press: Middle East's digital economy boom will stretch far beyond the Gulf

ABU DHABI, 31st August, 2023 (WAM) -- A local newspaper has said that the Middle East has shifted its focus towards harnessing the power of data. Overcoming initial challenges of low internet adoption and limited smartphone usage, the region has embraced a digital revolution that is propelling it into a new era of economic growth and innovation.

The National, in an editorial on Thursday, said, "The growth of the Middle East’s digital economy is advancing with breath-taking speed, according to new research by the Swiss bank UBS. By 2030, it will have grown to $780 billion – a four-fold increase from last year’s figure of $180bn, suggesting a growth rate of about double that of the rest of the world.

“Analysts at the bank say the Middle East is currently at a digital inflection point comparable to where China was 10 to 15 years ago – a remarkable milestone, considering the scale of digitalisation of Chinese consumer life over the past decade.”

Despite the dizzying growth figures, however, there remain extraordinary challenges in realising the vision of a digital Middle East. While the Gulf countries and in particular the UAE embraced digitisation and set a robust infrastructure years ago, many of the region’s countries remain weak, unstable and underdeveloped.

“Nonetheless, there are many reasons to be hopeful. Even when one excludes the advancements of Gulf countries, islands of connectivity where internet penetration and usage rates are some of the highest in the world, structural factors in the region make it ripe for a digital boom. A growing with large numbers of internet-hungry young people even in places where internet penetration is low suggest the growth upside is huge,” the editorial continued.

Perhaps the best example of this potential lies in Egypt, where 31 million of the country’s 107 million people lack internet access. But Egyptians’ level of digital adoption – a measure of how many consumers interact with major industries like banking or grocery retailers through digital means – rivals developed markets in Europe and North America, according to McKinsey, a consulting firm.

As more places in the Middle East come online, they could become prime markets for “everything apps” – social media-based platforms that branch out into retail and the provision of services. Such platforms are already common in China and thought to be a model for Elon Musk’s plans to transition Twitter into X.

In the more established digital markets in the Gulf, government foresight and strong public policy have attracted investment and boosted consumer confidence in technology. The UAE and Saudi Arabia, the Arab world’s largest economies, have undertaken several initiatives in recent years to promote the use of technology in daily life.

According to the International Data Corporation, a US research firm, the two countries are likely to spend nearly $35bn and $20bn, respectively, on digital economic transformation this year.

As the Middle East harnesses data and technology, it's poised to reshape its economic landscape, ushering in an era where innovation propels the region's global economic role, concluded the Abu Dhabi-based daily.