While still heavily reliant on oil and gas production and exports, countries in the Middle East are making a massive effort to diversify their economies — namely in new technologies and digital transformation. In fact, countries in the Gulf Cooperation Council (GCC) are investing heavily in digital technologies across government and private sectors. The recent Al Amal (Hope) Mars mission, undertaken by the UAE, helped raise the profile of technology skills in the GCC, but the region’s governments and firms have more down-to-earth plans for technology development and education that will benefit all of the region’s inhabitants.
Due to climate change, the rise of renewable energies, and increased global competition, this initiative was already well underway, but declining oil prices in the wake of the COVID-19 pandemic are kicking digitization efforts into overdrive in the region. Let’s dig into current technology trends in GCC, how these are impacting non-oil industries, and how you can prepare your workforce to tackle the digital economy.
GCC Overview
In 1981, Bahrain, Kuwait, Oman, Saudi Arabia, Qatar, and the United Arab Emirates (UAE) entered into an economic agreement forming what is now known as the GCC. The goals of this union have been wide-ranging from commonality in culture, regulations, currency, technological and scientific innovation, and much more. Most recently, members of the GCC are focusing largely on diversifying their economies from hydrocarbons to digital technologies. They are making progress, albeit somewhat slow. That said, S&P Global predicts that non-oil GDP in Gulf countries will reach nearly 37 percent by 2022. That is up from 29.2 percent in 2012.
Now, let us understand the recent technology trends.
What’s Driving Recent Technology Trends in GCC Countries?
GCC countries are faced with implementing new business models to accommodate digital transformation in industries and changing social and political conditions. More women are now entering the workforce, as well as Gen Z. On top of that, there is a growing population of ultra-wealthy people. In UAE alone, it is expected that the millionaire class will grow by 60 percent from 2019 to 2030. This is forcing businesses and governments alike to provide more personalized products and services that cater to these specific demographics. In addition, the lack of local high-tech talent is spurring investment in upskilling in the region.
What are GCC Member Countries Investing In?
To meet the demands of the digital age, organizations in GCC countries are spending more on technology as part of the digital transformation occurring in the region. Several technologies are critical in this effort.
5G
Saudi Arabia, UAE, Bahrain, and Qatar have made huge investments in 5G mobile networks in recent years. This next-generation wireless network promises faster speeds, reduced network latency, and the capacity to connect more devices without performance degradation. The main objective is to boost the gaming industry, customer services, automating operations in the oil and gas, healthcare, and automotive industries — and enabling smart, connected cities.
Internet of Things (IoT)
Another one of the major technology trends in GCC is the implementation of IoT technologies in the retail sector. Large retailers are leveraging sensors and beacons to personalize the shopping experience for consumers through smartphones, provide cross-selling suggestions and notifications about product availability based on consumers’ purchasing histories and product preferences, and much more.
Cloud Computing
While security concerns kept many companies wary of migrating infrastructure and applications to the cloud, those have been largely overcome. Companies of all sizes in the region are now adopting cloud technology and services readily. In fact, 77 percent of CIOs surveyed in the UAE claim that they are investing in cloud technology, while 44 percent claim that they are doing so aggressively.
Data and Analytics
Again, there is a big push to leverage big data analytics in the retail and ecommerce sector. Large companies in GCC countries are using analytics to track consumer behavior, monitor website traffic, forecast demand, adjust pricing, and much more. By gathering data from IoT-connected devices, payment systems, augmented reality applications, and more, companies can optimize product positioning, the consumer experience, and, ultimately, the bottom line.
AI and Machine Learning
One of the biggest technology trends in GCC countries is the adoption of AI and machine learning, particularly in the UAE and Saudi Arabia. To illustrate, in recent years, Saudi Arabia has invested over $135 billion in AI. According to a report by the consultancy Oliver Wyman, the GCC could save $7 billion per year by automating routine tasks with AI and machine learning. This is especially true in the government sector, where AI can automate common tasks associated with licensing and registration, tax filings, and more.
Augmented Reality (AR) and Virtual Reality (VR)
While AR and VR have many uses across all industries, the COVID-19 pandemic is spurring even more investment in these technologies, particularly in the healthcare and real estate sectors. Virtual doctor visits, chatbots, and diagnostics create a safe alternative to in-person health consultations during lockdowns. In real estate, these technologies are being used to conduct virtual tours of properties.
Cybersecurity
The aggressive push for digital transformation in GCC countries increases the need to implement measures to protect against corresponding cyberthreats. And all countries in the GCC have created cybersecurity organizations to prepare for potential breaches, especially after the Shamoon cyberattack that hit RasGas in Qatar and Saudi Aramco in Saudi Arabia. Countries are also investing heavily in educational programs, as well, with a significant uptake by female students.
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Industry Impacts: FinTech, Retail, and eLearning
GCC countries are undertaking digital transformation across all industries, including oil and gas, but notable investments are being made in FinTech, retail, and eLearning.
FinTech
While the GCC has been later to the FinTech game than other regions in the world, countries in the Council have been investing heavily in the sector since 2017. The FinTech industry is now growing at a 30 percent compounded annual growth rate and is receiving unprecedented levels of VC funding. Further, initiatives in this rapidly growing sector are expected to increase by 50 percent over the next five years.
Retail
Physical stores still dominate in this sector, but B2B marketplaces and ecommerce are growing significantly in the region. Expected to grow to $405 billion in the next five years, and with Saudi Arabia and UAE leading the way, the retail market in the GCC accounts for 77 percent of total sales. This phenomenon is being driven in large part by Generation Z, the rising affluence of citizens, and more women entering the market.
eLearning
Driven by a lack of digital talent in the region, GCC countries are also investing heavily in eLearning to bridge the gap. Expected to grow by $492.66 million between 2020 and 2024, the eLearning market is being driven by the need for skill-based training. Other drivers in this market include creating a more sustainable, native workforce and reducing economic and educational inequality.
Wrapping Up
One factor that can hold back the region’s digital transformation is a lack of access to skilled professionals. Part of the solution to this challenge is upskilling and reskilling through online bootcamps like Simplilearn. Gulf Business Machines is one organization that has partnered with Simplilearn to upskill its employees. Simplilearn offers a comprehensive Enterprise Skilling Program and supports the development of a technology workforce in the GCC and all over the world. Contact us today to learn how you can ensure that your business is ready to embrace the technology trends in GCC to thrive in today’s digital economy.