GCC countries have the potential to add $255 billion to the regional gross domestic product (GDP) and create 600,000 technology jobs by 2030, according to the latest report by Strategy& Middle East.
The GDP windfall, which will include $119 billion from Saudi Arabia alone, can be realized by instituting the right policies and by developing “tech champions”.
The consulting firm noted that digital economies in the region are indeed on a rapid growth path, expanding six times as fast as their traditional peers. However, it said the maturity of the Gulf tech markets continue to lag behind other parts of the world, as the focus remains “tilted” toward traditional IT.
According to Chady Smayra, Partner at Strategy& Middle East, investment in research and development (R&D) and in start-ups remains limited, while foreign companies are still responsible for the bulk of its product development and service delivery.
“While the GCC digital economy is growing rapidly, that alone will not make the region internationally competitive,” Smayra said.
To close the gap, GCC countries can tap into the so-called “tech champions”, which provide the economies of scale and scope necessary for innovation, as well as boosting exports, creating jobs and attracting talent and large-scale investments.
With the help of tech champions, regional GDP could jump by a cumulative five percent by 2030, creating some 600,000 jobs within the technology sector alone, Smayra said. The growth will be fuelled by digital solutions and emerging technologies, according to Tarek El Zein, Partner with Strategy&.
“As the regional economy transitions to being led by digital disruptors, the digital economy could increase its contribution to regional GDP potentially by $30 billion over the next five years, from $169 billion to $204 billion,” Smayra said.
The growth is possible with the help of regulatory and policy support from the governments. “Gulf countries must create and promote tech champions to build a strong digital economy and facilitate national resilience,” said Wissam Abdel Samad, Partner with Strategy& Middle East.
Last April, the UAE cabinet adopted the country’s Digital Economy Strategy, which seeks to increase the GDP contribution of the sector by 20 percent over the next ten years.
(Reporting by Cleofe Maceda; editing by Seban Scaria)