Arab Private Sector Forum Beirut 16 January 2019 DIGITAL ECONOMY IN THE ARAB WORLD: STATUS & THE WAY FORWARD Eng. Atef Helmy Former Minister of ICT , Egypt
Why do we need to embrace the digital economy?
Socioeconomic impact of digitization Enhancing digitization and creating digital markets can result in considerable economic and social benefits to societies and communities, through its potential to increase productivity, accelerate growth, facilitate job creation, and enhance the quality of life for society in general Macroeconomic impact Sectoral impact Economic Growth Job Creation Education Public Sector Healthcare Promote Innovation Social Welfare Manufacturing Trade Financial & Competition 3
Sectoral impact of digitization E-Healthcare E-Education Digital Manufacturing Fintech $80 $107 $3.7 $57 billion billion trillion billion E-Health industry was E-learning industry The application of During the first half of worth $80bn globally in reached $107 billion in “Digital Manufacturing” 2018, global fintech 2017 2017 (estimate by is expected to create investment reached a “Global Industry $3.7 trillion of value record high of $57bn Analyst”) worldwide by 2025 4
Global impact of digitization $1.16 €4.4 4.7 x trillion trillion The digital economy in The digital economy in Digitization impacts Asia Pacific will be the EU will be worth €4.4 economic growth 4.7 worth $1.16tn by 2021 trillion by 2020 times more than accounting for 60% of broadband rollout GDP 5
Digital Economy contributes to the achievement of SDGs Technology has great potential to help deliver the SDGs… We need to harness the benefits of advanced technologies for all. – Antonio Guterres, UN Secretary-General Food & Housing Participation & Security Smart Agriculture E-government Smart Building Smart Police Real-time disaster warning ICT Health & Learning Work & Business Generic description E-Health of the 6 factors E-Banking E-Learning E-Commerce Smart Manufacturing Infrastructure & Environment Mobility Connectivity Smart Water Mgmt Connected Private Transportation Smart Energy Smart Conversation Smart Logistics 6
Status of the Digital Economy in the Arab World The digital revolution is transforming the Middle East whereby digital technologies are disrupting every aspect of individuals’ lives, business, and governments.
Digital Consumer Adoption is high in the Middle East Smartphone penetration in MENA region ranks 2 nd MENA region has the 50% of ME population is UAE & Bahrain is 100% vs. worldwide in number of fastest growing video below the age of 24, 80% in USA (will reach 60% YouTube video views. consumers on Facebook therefore there is a lot of across ME in 2020) potential for digital adoption. Middle East Digital Consumers avg.: SMEs with online presence 15% Individuals participating in social media 46% Social media users who use Arabic 45% People watching online videos daily 47% Households with Internet access 50% Individuals who are regular Internet users 61% Users that go online daily 88% Facebook subscribers accessing daily 89% 3G network coverage 97% 8
Digital business adoption is low in the Middle East, however has high potential for growth SME Online Presence: 18% 15% 7% UAE Saudi Arabia Egypt Successful examples of digitized business services in Middle East: Souq is the Middle East’s leading e- Careem is able to compete regionally Etisalat and Du in the United Arab commerce marketplace; facilitating with Uber using a localized strategy Emirates and STC in Saudi Arabia have connection of 75,000 Middle Eastern launched several smart cities and IoT businesses with customers. Acquired by services Amazon for $580m 9
Digital government adoption is very low in the Middle East (6%) E-government adoption by Country: 18% 16% 15% 15% 14% 12% 8% 9% 8% 8% 7% 5% A huge variance exists among Middle East countries, yet some good examples are paving the way for the rest: UAE is a world role model for e-government services Saudi Arabia & Bahrain have achieved very good progress Egypt has started a very aggressive e-government digital transformation plan 10
Middle East is capturing only a fraction of its digital potential Digital contributes to only 4.1% of GDP Share of digital contribution to GDP by country: 8% 8% 6% 5% 4% 4% 4% 4% 1% 0.4% 11
The Way Forward: Digital Economy Strategy
Arab countries are pursuing various digitalization strategies In UAE ’s 2021, Digital Saudi Arabia ’s National Egypt ’s Vision 2030 technology is identified as Transformation Program envisions a competitive, one of the top seven 2020 has prioritized balanced, and diversified primary national sectors digital transformation as economy, dependent on one of the top four innovation & knowledge Common National Goals 13
The Arab Digital Economy Strategy was launched during the Digital Economy Conference in Abu Dhabi (16-17 Dec 2018) Under the patronage of: Together with: Endorsed by: Supported by: Developed by: Cairo University
Digital Strategy Development Three dimensions Stakeholders dimension Applications Devices Infrastructure Tools Geographic dimension dimension 15
Digital Strategy Development Geographic Dimension We clustered the Arab countries into three groups: › Achiever Group: these nations are mainly Applications developed economies. They continually boost user experience and use big data and IoT to develop a Devices smarter and more efficient society. Infrastructure › Promising Group: Nations in this cluster experience the biggest GDP growth from ICT Infrastructure. Their focus is on increasing ICT demand to facilitate industry digitization and high- quality economic growth. › Beginner Group: these nations are in the early stage of ICT infrastructure build-out. Their focus is on increasing ICT supply to give more people access to the digital economy. 16
Digital Strategy Development Tool Dimension The “Tool Dimension” is divided into three groups: › Infrastructure: It is essential to set up a common Applications networking infrastructure, which can act as a base for integration and interoperability. The infrastructure Devices allows agencies to be connected in a dedicated Infrastructure network to facilitate secured electronic delivery of information and services for inter and intra agency communications. › Devices: The component that enables the users to perform a wide range of functions through common, convenient and one-stop access channels to Government related services and information. Such access channels can be mobile devices, telephone, fax, counter services and Internet › Applications: These provide end-to-end services to citizens and businesses and require many agencies to interact and coordinate with each other. 17
Digital Strategy Development Stakeholders Dimension The “Stakeholders Dimension” consists of: › Government: This layer aims to show the digital Applications transformation in sectorial level and how the digitization disturbed the traditional business model Devices and created new economy parallel to the old one Infrastructure › Business: Creating the right environment of innovation that allow the ICT companies/start-ups to develop new technologies and applications in different sector – this requires developing our own “Silicon Valley” for all the Arab countries › Individual: The digital ecosystem should be citizen/user centric . This is important as one of the main features which differentiates this from the industrial revolution is the mass customization 18
The Union of Arab Chambers (UAC) aims to unlock intra-Arab trade by harnessing the power of the digital economy UAC is seeking to launch a state-of- the-art digital marketplace through public-private partnership . The project is the cornerstone of the Arab Common Market and is a trading platform that leverages technologies such as AI , IoT , and blockchain to simplify and facilitate cross-border trade and exports from the region. 19
The private sector has an important role to play The private sector’s role is vital to the success of digital transformation, as it introduces new digital services, creates user awareness & demand for digital transformation, supports with knowhow and investments, and is the driver of public-private partnerships. Robust Strategy Successful Digital Private Sector & Roadmap Transformation 20
“The Digital Economy is the road to Arab Unity & Prosperity” Thank you
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