Simply no escaping a digital transformation
As we emerge from the economic tsunami that has swept the world over the last two years, spending on information and communications technology in the Middle East is expected to grow 6.2 per cent this year – a significant and welcome reversal of the 3.2 per cent contraction in 2020.
The key driver has been the recovery of the regional economy and the return of consumer confidence, especially in the Gulf. Global demand has also been recovering, and this is supporting the recovery of economies across the Middle East. At the same time, economic stimuli from governments have also been significant and oil prices have recovered to top $80 a barrel, shoring up revenues for many governments in the Gulf.
Mega-events like the ongoing Expo 2020 in Dubai and next year’s Fifa World Cup in Qatar will further boost tourism and investment, while it is impossible to ignore the huge transformation in Saudi Arabia. The Kingdom is jumpstarting its economy with a $3.2 trillion domestic investment plan.
The massive economic package and ‘giga projects’ by Saudi Arabia will infuse investment and drive a significant expansion of its digital infrastructure. In the
UAE, property prices are rising significantly, consumer confidence and spending are recovering well, and hospitality is once again thriving.
The UAE’s long-term focus on building its post-pandemic economy based on digital will significantly boost the ICT sector.
In fact, IDC estimates that digital transformation-related ICT spending by enterprises in the UAE will increase at compound annual growth rate (CAGR) of 16.3 per cent across 2019-22.
On the back of these factors, the key economies in the Gulf are expected to recover from the contractions of last year and continue on that trajectory in 2022. The pandemic has led to an expansion in the depth and breadth of the ‘digital consumer’. Many significantly increased their online purchases as Covid-19 took hold and used digital banking and government services, telemedicine, and digital payments for the first time.
Indeed, our research shows that nearly 50 per cent of organisations in the Middle East have brought forward their digital roadmaps by about a year as a result of the pandemic.
Governments not immune
These habits are shaping the responses of governments and businesses alike – and accelerating their digital transformation. Armed with advanced AI algorithms, new-born digital players, direct-to-consumer players, fintechs, learning apps, and so on are disrupting or nibbling away at the edges in most industries.
In response, leading governments and traditional businesses are increasingly adopting a digital-first approach to their operations. Indeed, our research shows that nearly 50 per cent of organisations in the Middle East have brought forward their digital roadmaps by about a year as a result of the pandemic, and 14 per cent by two years or more. In a digital-first world, business outcomes and innovation are tied to the ability to develop and use innovative technologies and services anywhere, as quickly as possible. Cloud is the obvious tool for addressing this need and is rapidly becoming the foundational technology platform for digital transformation.
Potholes and pitfalls lie in wait for those organisations that are not fully prepared. That’s because they need to develop ‘digital resiliency’ as well. This is the ability of an organisation to not only be resilient to future disruptions, but also to be able to capitalize on the changed conditions by leveraging digital competencies.
Organisations need to develop digital resiliency across all dimensions of the business – from leadership and organisation to financials, operations, and the workforce to brand reputation, customers, and ecosystems. Only then can they look to thrive in the post-pandemic, digital-first world.