Technology

GCC technology market growing substantially

September 24, 2020

he MENA technology market is expected to witness a significant upgrade in the coming years. The artificial intelligence market in the region is projected to grow at a compounded annual growth rate (CAGR) of more than 30% between 2020 and 2025. The most use cases are reflected in utilities, retail, banking, fraud analysis, automated threat intelligence, land department, transportation, and public sector services. Some of the major trends and key driving factors are:

  • Increasing spending on technology
  • Growing demand for automation and increasing focus on digital business ecosystems
  • Introduction of stringent data protection laws and encouraging regulatory framework and new policies
  • Growing investments in ICT infrastructure
  • Government Initiatives and tech-related promotion activities
  • Increasing opportunities for blockchain in critical sectors, such as telecom, banking, and retail
  • Fourth Industrial Revolution
  • Government focus on AI-based technologies and increasing investments in related R&D activities

The Covid-19 pandemic has triggered a severe economic contraction in the MENA region. The upheaval has dislocated economies and ecosystems and has hindered supply chains, owing to a lack of transparency, visibility, and traceability on goods being moved worldwide. Blockchain technologies are going to play a crucial role in the economic recovery post the Covid-19 disruption. There has been a resurging interest in blockchain, particularly in the supply chain, food traceability, health records, immunity passports, and medical supplies.

Blockchain, artificial intelligence (AI), and machine learning (ML) are being applied in different use cases, right from climate change modeling and autonomous vehicles to medical research, risk assessments in finance, and food supply chain logistics. Similarly, they are being used in a wide range of sectors, such as the public transport system, to identify communicable diseases, screen the temperature of passengers, and provide transit operators across different modes of transportation with real-time information and healthcare system to help individuals discover their potential exposure to the virus.

Shoppers greeted by a robotic automated mobile vending machine in Dubai

For example, Bahrain has tested such a network through an application called “BeAware” that uses location data to inform individuals if they approach someone currently infected with COVID-19. Similarly, across major parts of the United Arab Emirates (UAE), telemedicine has replaced face-to-face consultations with doctors, schooling is continuing at home through remote learning, and even Dubai’s real estate developers have taken their sales force to the virtual world to discuss investment options on-demand. In Saudi Arabia, the Danubemodern trade chain is using AI to minimize delivery time, and UAE-based healthcare startup Nabta Health is using AI to provide risk and symptom assessments for Covid-19.

On similar grounds, UAE is promoting blockchain in almost every sector, from energy to shipping and media, where the paperless strategy by Dubai is going to allow everyone to adopt blockchain. The nation has come up with many initiatives during 2017 through the “National Program for Artificial Intelligence,” like the formation of the UAE AI Council, the UAE Blockchain Strategy 2021, and the development of the region’s first AI camp. Interestingly, UAE and Saudi Arabia are cooperating on the creation of a cryptocurrency through the “Aber” project, which aims at better understanding the implications of blockchain technology for facilitating cross border payments.

In the GCC region, Saudi Arabia and the UAE are leaders in spending on artificial intelligence, machine learning, and blockchain. In the UAE, spending on emerging technologies such as cloud computing, cognitive AI, IoT, and robotics will exceed USD 2 Billion by end of 2020. By 2030, AI is anticipated to account for around 13% of the GDP of KSA and UAE. According to the Ministry of State for Artificial Intelligence, UAE has emerged as a significant hub for innovative ideas. The country is building itself into an incubator for future technologies. UAE was one of the first countries to embrace blockchain to improve the work of the government, and other sectors, such as logistics and financial services. For example:

  • The Abu Dhabi port has locally built SILSAL, the first blockchain-based solution in the ports industry, to improve tracking and visibility
  • The Abu Dhabi Global Market created one of the industry’s first Know Your Customer (KYC) utility projects built on a blockchain
  • The Abu Dhabi Securities Exchange became the first financial market in the MENA region to use blockchain technology in its services
  • Telecom provider Etisalat partnered with leading blockchain solution providers SettleMint and Tradefin to innovate blockchain business-to-business solutions
  • Dubai Land Department (DLD) is using blockchain to improve service and collaborate with other parties involved within the real estate market

Saudi Arabia is advancing toward becoming the technology hub for the region. As part of its vision 2030, Saudi Arabia has formulated and launched a nation-wide policy on AI, which aims to add up to USD 133 billion to the GDP by 2030. The policy formulation is being developed by Saudi Data and Artificial Intelligence Authority (SDAIA), which is working towards implementing a cloud platform, intending to build one of the most prominent cloud frameworks in the Middle East by connecting 83 data centers controlled by over 40 government bodies. In addition to that, SDAIA plans to launch the Saudi National Artificial Intelligence Strategy in the Global AI Summit in October 2020. In addition, Saudi Arabia has been working on the models of smart cities, which are an essential part of the infrastructure plan and vision 2030. Saudi Arabia is also in the process of developing a USD 500 billion megacity called Neom, spread over 26,000 sq km with state-of-the-art technologies based on AI, IoT, and blockchain. In addition to that, the government is also planning to make educational reforms more aligned with AI and digital skills to match Saudi Arabia’s ambitious plan towards artificial intelligence.

Many countries in the MENA region are racing to grow their technology industry and build attractive eco-systems to become tech hubs in the region. The influx of investments and the development of initiatives to build confidence in the impact of different technologies like AI, robotics, blockchain, IoT, among others, will be a major driving force to boost business performance, optimize resource utilization and improve customer experience across other industries.

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