The Middle East has realised only eight per cent of its overall digital potential, compared with 15pc in Western Europe and 18pc in the US, a top Bahrain government official has said.
According to Information and eGovernment Authority (iGA) chief executive Mohammed Ali Al Qaed there is a lot of room for digital growth in the Middle East and North Africa (Mena) region, where just 8pc of small and medium enterprises (SMEs) have an Internet presence, 10 times less than in the US.
“Only 1.5pc of retail sales in Mena are online, which is five times less than the US. Digital comprises 4.1pc of the Middle East economy and its contribution to GDP is half that of the US,” he said.
The official was speaking during the BBK Digital Economy Forum and Expo 2020 at the Four Seasons Hotel Bahrain Bay.
Highlighting the Bahrain government’s vision for digital transformation, Mr Al Qaed said the kingdom’s internationally acknowledged successes in attracting investment to its information and communications technology (ICT) industry is built on the back of robust legislation and infrastructure that it has spent years building.
This landscape has allowed for the application of modern technologies in a range of areas and for the development of skills required to implement them.
“Dynamic, competitive markets and an innovative private sector are what drive digital economies,” he said.
“Our goal is for the private sector to take the lead in researching and developing emerging technologies; identifying and supplying innovative solutions; and creating opportunities to improve export revenues. We also welcome their contributions in helping us create even more digital-friendly economic policies.”
The drive to digitalisation is led by the vision of His Majesty King Hamad to make ICT investment a pillar for socioeconomic growth in the kingdom.
The official asserted that the government has helped to encourage innovation and stimulate economic growth through the formation of an artificial intelligence (AI) and emerging technologies governance committee and the passing of laws protecting personal data and electronic transactions.
This is in addition to providing an open data portal and formulating a comprehensive AI strategy in 2020 to enhance government performance and productivity.
Highlighting the importance of digital tools in improving living standards, fighting poverty, protecting the environment, and enhancing the quality of health and education, he said digitalisation also has a key role in creating job opportunities, as each digital job can potentially have the trickle-down effect of creating two to four further jobs in other areas.
Mr Al Qaed also presented key findings from the United Nations Digital Economy Report, which showed that the digital economy now makes up between 4.5pc and 15.5pc of the gross world product (GWP).
The report also found that the US and China contribute 75pc of all patents related to blockchain technology, 50pc of the world’s expenditure on the Internet of Things (IoT), and more than 75pc of the world market’s public cloud computing.
source: zawya
The Arab world region, rich in natural resources; with enormous oil and natural gas reserves (32 percent of the world's known natural gas reserves are in the region) and phosphate (Morocco alone has more than half of the world's reserves). It is still lagging in terms of international trade.
The Arab world has also huge human resources, with a very young population. Suffering from unemployment and socio-economic problems, they are the main factor of change of this region, once was the beacon of a flourishing civilization. (read also Emerging Arab world and business opportunities in spite of the political turmoil)
Despite the distorted image reflected by the media, this region is witnessing a new reality imposed by enthusiastic and thirsty young people for the entrepreneurship. These people, constitute the pillar of a new generation of entrepreneurs who have succeeded in carrying out remarkable projects as described by an American entrepreneur, Christopher Schroeder in his book «Startup rising, the entrepreneurial revolution remarking the Middle East ».
Digital economy
While the Arab world is the scene of a popular uprising, the world economy is undergoing major changes towards digitalization and the fourth industrial revolution. Companies that are mainly based on internet and software, such as Google, Facebook, Twitter, Airbnb, Uber, Amazon, Alibaba…etc, have enabled unprecedented connectivity and access to information, thus opening up new horizons for economic models that did not exist before.
The Swiss economic model
On the other side, north of the Mediterranean Sea, behind the Alps, a small country in the heart of Europe, sits on the throne of global economic competitiveness. Switzerland, an industrial country, with export based economy and occupies a privileged place for world trade, thus serving as a trade hub.
RoAW: Rest of Arab World, GCC: Gulf Cooperation Council.
Bilateral trade relations
Trade between Switzerland and the Arab world increased in volume (exports + imports) from nearly 10 billion in 2010 to more than 23 billion in 2017 (most of it are exports) (figure 2) and this despite of the political on-going turmoil.
In view of these developments, partners of all kinds from both sides are looking to cross the walls in order to build bridges and increase their sales. However, the geographic, linguistic, cultural, regulatory and information asymmetry constitute obstacles to achieving the maximum potential of exchanges between the two parties.
Swiss Arab Entrepreneurs Platform
The Swiss Arab Entrepreneurs platform (SAE) was born from the experience of its founder, Ayman Abualkhair, having spent several years in the service of Arab-Swiss economic relations. Its mission is to reflect the tremendous investment opportunities in the Arab world, diffuse reliable information, promote business opportunities on both sides, and facilitate commercial links at the lowest cost, thanks to digital and innovative entrepreneurship models. Swiss Arab Entrepreneurs is the driving force for connecting entrepreneurs and businesses, in order to enable efficient exchange via an online platform.
The transformation towards the digital economy in Bahrain is conducive to economic growth, higher GDP, and higher GDP per capita for Bahrainis, says Bahraini businessman Yacoub Al-Awadhi.
He stressed that digital transformation may have a positive impact on financial and social inclusion and increase access to quality health care and education services.
Al Awadi, CEO of NGN, a global information systems company, stressed the importance of increasing “venture capital” to finance startups in Bahrain.
This, he said, would enhance the presence of Bahraini cadres in jobs and digital industries, as well as increase the number of patent applications in Bahrain, while enhancing infrastructure development to improve the supply of ICT products and services.
He said that Bahrain possesses all the elements of the knowledge economy, namely the existence of a supportive community infrastructure, broadband connectivity, Internet access, a learning society, knowledge workers and knowledge makers with the ability to question and connect, and an effective research and development system.
Al-Awadhi stressed that all Bahrainis are in one way or another connected to the national plan for the transformation to the digital economy. In Bahrain, the use of smartphones exceeds 170%, and most Bahrainis have an account on one or more social media; these rates exceed even those in the United States.
In addition most Bahrainis display a readiness to embrace new digital products.
On the other hand, Al-Awadhi considered that Bahrain's early transformation towards the digital economy makes it better able to face the challenges of this type of economy. These challenges inevitably come, including the control of multinational companies on global production, open markets and the removal of barriers will facilitate the control of large companies with their networks.
"When we look at American or Chinese technology companies such as Facebook, Google and Alibaba, they are profitable from everywhere in the world, and this has led to an increase in the unimpeded displacement of funds to the United States and China.
"Hence the importance of accelerating the transformation towards the digital economy in Bahrain and achieving a balance between exports and imports of digital goods."
In this regard, Al Awadi stressed the importance of accelerating the development of the education system in Bahrain in order to ensure the qualification of graduates to fill the jobs arising from this transformation to the digital economy, saying that the digital economy will provide new job opportunities, but will abolish many of the traditional jobs that we see in existence today.
These could well include the job of a school-teacher, bus driver, customer service officer, auditor or bank teller.
source: tradearabia
In this member spotlight, see how Bahrain’s young startup ecosystem is coming to life in the Fintech sub-sector.
Bahrain took the spotlight in the startup world earlier this year when it hosted the Global Entrepreneurship Congress 2019 in April.
The event gave the country a chance to show off its emerging startup economy to a much broader audience.
Bahrain is well known for being a world leader in getting its citizens connected to the internet.
The latest Global Competitiveness Report published by the World Economic Forum ranked Bahrain third globally for the percentage of internet users by (98%), fifth globally in mobile broadband penetration rate (147.3%), and 10th globally for mobile penetration (158.4%). This naturally has helped encourage startup creation.
Another attractive aspect for startups is that Bahrain offers 0% corporate and personal tax, making it the most liberal tax regime in the Gulf.
These government efforts have attracted entrepreneurs from other countries, with more than a quarter of Bahraini founders moving to the country from somewhere else.
When it comes to specific startup sub-sectors, Fintech is on top and showing momentum.
This is partly due to Bahrain ranking first globally in Islamic finance regulation in the Global Islamic Finance Report.
Another factor is that the Bahrain government reduced capital startup requirements from $50,000 to $100 for some businesses and introduced a regulation-exempt “sandbox” for Fintech startups, meaning it would be easier for startups to experiment and grow quickly.
EDB Bahrain believes Fintech will continue to attract attention for the years to come, with an “increasing rise of challenger banks, digital-only banks, and non-traditional, algorithm-powered lenders” coming on to the startup scene. It expects Gulf-based FinTech startups “to attract $2 billion in private funding over the next 10 years, compared to $150 million over the previous decade.”
Other Bahrain startup ecosystem highlights from the 2019 Global Startup Ecosystem Report include:
- Top 15 Global Ecosystem for Affordable Talent.
- Average early-stage funding per startup totals $159,000.
- Ecosystem valued at $594 million.
- Output Growth Index of 9 out of 10, showing there is meaningful growth in total startup creation, calculated in an annualized growth rate.
Our local member in Bahrain is Tamkeen, a public authority established in August 2006 with the goal of supporting Bahrain’s private sector and playing a positive role in Bahrain’s Economic Vision 2030. Tamkeen has two primary objectives: 1) foster the development and growth of enterprises and 2) provide support to enhance the productivity and training of the national workforce.
In fact, Tamkeen says it has created more than 330 different initiatives that have served more than 230,000 Bahraini individuals and businesses to date.
“One of Bahrain’s key competitive advantages in the region is its educated, economically active young population,” Dr. Ebrahim Mohammed Janahi, CEO at Tamkeen, told us. “We have redoubled our efforts to support globally recognized training solutions to broaden and deepen our pool of tech-savvy professionals.”
source: startupgenome
The sector is the second largest in terms of market capitalisation on the Dubai and Abu Dhabi stock markets and is the third largest on the Saudi market
A mature telecom sector in the UAE and Saudi Arabia faces different challenges and growth opportunities in both countries.
A slowdown in the UAE markets has weighed on telecoms, but analysts told Zawya that they are optimistic about the second half of 2019, as the government increases spending ahead of Expo 2020.
In the Kingdom, market saturation could dent growth, but government initiatives and a decline in the number of expats leaving the country are positives for the sector.
The sector is the second largest in terms of market capitalisation on the Dubai and Abu Dhabi stock markets and is the third largest on the Saudi market.
Earlier in August, the UAE has been ranked first in the Arab region in Government Electronic and Mobile Services (GEMS) Maturity Index, according to a report issued by the United Nations Economic and Social Commission for Western Asia (ESCWA). (Read more here).
Here we take a look at how the leading telecoms in the UAE and Saudi Arabia performed in the last two quarters and the pointers that could prompt growth for the rest of the year.
UAE
Du and Etisalat are the two listed telecom companies in the UAE. A slowdown in the economy has affected the performance of both the companies.
“The local market has been very challenging due to a slowdown in the economy and a telecom sector that is already matured, seeing population growth and high demand drivers in the last couple of years,” Omar Maher, vice president of equity research at EFG Hermes told Zawya during a phone interview.
“However, in the past 6 months demand has been slowing,” he added.
Dubai’s Du posted a 5.4 percent drop in net profit after Royalty payments for the first half (H1) of 2019.
The company’s revenue fell 5.3 percent during the period.
Abu Dhabi-based Etisalat, the UAE’s biggest telecom operator, posted a 3.1 percent increase in consolidated net profit for H1 2019 and a 1.27 percent drop in revenue.
“Du has been more affected than Etisalat. Etisalat managed to protect its subscriber base better and has been more proactive on the commercial side in the last couple of years,” Maher said.
Etisalat Group’s subscriber base reached 143 million at the end of June 2019, a year-on-year (y-o-y) increase of 2 percent compared to H1 2018.
Du’s mobile subscriber base dropped 8.9 percent to 7.22 million at the end of June 2019, compared to 7.92 million at the end of H1 2018.
The company’s fixed line subscribers reached 773 thousands at the end of H1 2019, a 2.38 percent increase from H1 2018’s subscribers number.
“Etisalat has core operations in the UAE, Morocco, Egypt, Pakistan and KSA.
Performance in Egypt has been better and Maroc Telecom (owned by Etisalat) as a group has done much better in the past six months.
Also Saudi Mobily (owned by Etisalat) is doing much better due to a recovery in demand in Saudi Arabia as well as support from the regulator and the government,” Maher noted.
“We might see an uptick for both UAE telecom players in the second half of 2019 because of the additional spending by the government ahead of the expo 2020,” he ended.
Saudi Arabia
Saudi Telecom Company (STC), Etihad Etisalat Company (Mobily), Mobile Telecommunications Company Saudi Arabia (Zain) and Etihad Atheeb Telecom constitute the telecom sector on Tadawul, with a total market capitalisation of 12.34 percent in the index.
Al Rajhi Capital that tracks telecoms in the kingdom said market saturation and pricing regulations could dent growth going forward.
“Sector growth may be unlikely to revise upwards because of already high penetration and firm regulatory control over prices,” Pritish Devassy, head of equity research at Al Rajhi Capital told Zawya in an email statement
“Impact of reversal of royalty fee, IFRS 16 impact and high top-line y-o-y growth were the key notables in H1 2019 results,” he added.
At the end of 2018, Zain, STC and Mobily reached an agreement with the Kingdom’s ministries of finance, communications and communication and information technology to reduce the annual royalty fee that each company pays to 10 percent, from 15 percent, retrospectively from January 2018.
The trio also reached a deal with the government to settle all old disputes in connection to royalties up to the end of 2017.
“All the companies reported healthy top-line growth rates coming from a low base with STC up 8.4 percent y-o-y as compared to Mobily’s 13.0 percent and Zain’s 24.2 percent,” Devassy said.
“While the new calculation for royalty fees was expected to deliver a negative set of results for Mobily and a positive set for Zain, it was the other way round with better than expected results for Mobily and a lower gross margin for Zain KSA,” he added.
Zain reported a net profit after zakat and tax of 260 million Saudi Riyals for H1 2019, while Mobily recorded a net profit of 105.02 million riyals for the period and STC saw a net profit of 5,598 million riyals for H1 2019.
According to Al Rajhi’s Devassy, the key drivers for the sector continue to be data pricing and promotional offers.
“Pricing is tightly controlled by the regulator and hence a material increase is not easy in our view,” he said.
“On the positive side of things, rate of decline in expats could decline as already a large chunk of expats have left. Lifting of ban on Voice over Internet Protocol (VoIP), being in existence for more than one and half year could also lower the cannibalization on an annual basis especially now as data contributes to a large part of earnings for companies,” Devassy added.
source:zawya
The worldwide 5G wireless network infrastructure revenue will reach$4.2 billion in 2020, an 89 per cent increase from 2019 revenue of $2.2 billion, said research and advisory firm Gartner in a new report.
Additionally, Gartner forecasts in the report titled “Forecast: Communications Service Provider Operational Technology, Worldwide, 2017-2023, 2Q19 Update” that investments in 5G NRnetwork infrastructure will account for 6 per cent of the total wireless infrastructure revenue of communications service providers (CSPs) in 2019, and that this figure will reach 12 per cent in 2020.
“5G wireless network infrastructure revenue will nearly double between 2019 and 2020,” said Sylvain Fabre, senior research director at Gartner.
“For 5G deployments in 2019, CSPs are using non-stand-alone technology. This enables them to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G core network infrastructure.”
In 2020, CSPs will roll out stand-alone5G technology, which will require 5G NR equipment and a 5G core network. This will lower costs for CSPs and improve performance for users.
5G rollout will accelerate through 2020
5G services will launch in many major cities in 2019 and 2020. Services have already begun in the U.S., South Korea and some European countries, including Switzerland, Finland and the U.K. CSPs in Canada, France, Germany, Hong Kong, Spain, Sweden, Qatar and the United Arab Emirates have announced plans to accelerate 5G network building through 2020.
As a result, Gartner estimates that7 per cent of CSPs worldwide have already deployed 5G infrastructure in their networks.
CSPs will increasingly aim5G services at enterprises
Although consumers represent the main segment driving 5G development, CSPs will increasingly aim 5G services at enterprises. 5G networks are expected to expand the mobile ecosystem to cover new industries, such as the smart factory, autonomous transportation, remote healthcare, agriculture and retail sectors, as well as enable private networks for industrial users.
Equipment vendors view private networks for industrial users as a market segment with significant potential. “It’s still early days for the 5G private-network opportunity, but vendors, regulators and standards bodies have preparations in place,” said Fabre.
Germany has set aside the 3.7GHz band for private networks, and Japan is reserving the 4.5GHz and 28GHz for the same. Ericsson aims to deliver solutions via CSPs in order to build private networks with high levels of reliability and performance and secure communications. Nokia has developed a portfolio to enable large industrial organizations to invest directly in their own private networks.
“National 5G coverage will not occur as quickly as with past generations of wireless infrastructure,” said Fabre.
“To maintain average performance standards as 5G is built out, CSPs will need to undertake targeted strategic improvements to their 4G legacy layer, by upgrading 4G infrastructure around 5G areas of coverage.
“A less robust 4G legacy layer adjoining 5G cells could lead to real or perceived performance issues as users move from 5G to4G/LTE Advanced Pro. This issue will be most pronounced from 2019 through 2021, a period when 5G coverage will be focused on hot spots and areas of high population density,” he added.
source: zawya
يكمن الهدف الرئيسي من عملية التحول الرقمي التي تم اعدادها في اطار رؤية المملكة لعام 2030 يكمن في نقل الاقتصاد السعودي من حالة النشاط الاقتصادي القائم على الريوع النفطية بشكل اساسي الى حالة النشاط اقتصادي الذي يتسم بالتنوع في مصادر الدخول و الذي يكفل تحقيق التنمية الاقتصادية المستدامة وتقليص التسربات في حركة رؤوس الأموال والخدمات الى الخارج حيث تقدر الأموال المنفقة على الخدمات الطبية التي يدفعها السعوديين في الخارج بحوالي 2 مليار ريال (540) مليون دولار، وفي قطاع التعليم ينفق السعوديين حوالي 15 مليار ريال (4 مليار دولار) في الخارج وفي السياحة الخارجية تصل الى نحو 30.5 مليار ريال (8.1 مليار دولار) ،اما التسربات في رؤوس الأموال المستثمرة فتقدر بحوالي 312 مليار ريال (84 مليار دولار) وذلك في عام 2018 فقط.
إذن تهدف خطة التحول الرقمي الى تمكين تحقيق رؤية عام 2030 عبر الانتقال الى مجتمع رقمي مبني على التفاعل وتبادلات الخبرات والبيات واقتصاد رقمي يخلق البيئة الملائمة لريادة الاعمال ووظائف جديدة وحكومة رقمية مبنية على مشاركة البيانات وتوفير الخدمات الرقمية الشاملة.
استراتيجية التحول
ان استراتيجية التحول الرقمي بنيت على أساس احداث التحول الرقمي الشامل ويتم العمل في هذه المرحلة على أربعة محاور تتركز في أربعة قطاعات وهي التعليم والصحة والتجارة الالكترونية والمدن الذكية وذلك عبر تأسيس الوحدات الرقمية التابعة للوزارات المعنية وتبرز مظاهر التقدم في عملية التحول الرقمي من خلال تحقيق العديد من الإنجازات لعل أهمها هو تجربة المدرسة الافتراضية والفصول الذكية في قطاع التعليم والاستشارات والخدمات الصحية عن بعد في القطاع الصحي والذي يؤمن لجميع المواطنين القدرة على الحصول على الاستشارات الطبية لثلاث مرات في الشهر مجاناً عبر تطبيقات الهواتف الذكية، كما وتم تفعيل عدد كبير من تطبيقات المدن الذكية كمواقف السيارات والاشارات الضوئية وإدارة النفايات الذكية في عدد من المدن السعودية، اما على صعيد التجارة الالكترونية فيتم العمل تطوير البيئة الرقمية والقانونية اللازمة لتوسيع حجم سوق الالكترونية في المملكة، فصدر مؤخرا قانون ينظم عمل التجارة الالكترونية عبر توفير المزيد من الشفافية والموثوقية في التبادلات التجارية الإلكترونية، ولقد لعب تطوير ودعم بيئة عمل التجارة الالكترونية دوراً مهماً في تعزيز نمو هذا القطاع فشهدت المملكة تطوراً ملحوظاً في حجم التجارة الإلكترونية إذ بلغ حجم التجارة الإلكترونية في عام 2018 حوالي 9 مليار دولاراً كما بلغ عدد المتاجر الإلكترونية المسجلة رسمياً في المملكة 25501 متجر إلكتروني، الامر الذي يشير إلى تعاظم أهمية هذا القطاع، الذي يتزامن صعوده مع ارتفاع عدد مستخدمي الانترنت في سعودية الذي وصل الى معدل 88% من اجمالي عدد السكان، ولقد انعكست تطوير البيئة القانونية والرقمية في سعودية في حصولها على ترتيب متقدم في مؤشر الأمم المتحدة للتجارة الإلكترونية والتسوق عبر الإنترنت لاسيما بين الشركات والمستهلكين اذ حصلت على الترتيب 52 من بين 151 دولة ممن شملهم التقرير وهو ما يدل الى حدى ما على نجاعة السياسات المعنية بتطوير هذا القطاع الحيوي والهام.
الاستثمار في التحول الرقمي
ان عملية التحول الرقمي تستدعي بالضرورة تجهيزات نوعية وبكميات هائلة كما تستلزم استثمارات كبيرة في مشاريع البنية التحتية و أفكار ريادية تساهم في عملية التحول الرقمي عبر الحلول الذكية والمبتكرة ما يفتح الباب واسعاً امام رواد ورجال الاعمال الى تأسيس مشاريعهم الخاصة وتحقيق استثمارات مربحة من خلال مواكبة عملية التحول الرقمي في المملكة، فعلى سبيل المثال تعاقدت الحكومة السعودية، وفي اطار التحول الرقمي، على عقد لتوريد ألواح ذكية مع شركة "تطوير لتقنيات التعليم" بقيمة 1,6 مليار ريال (420 مليون دولار أميركي ) لدعم قطاع التعليم والفصول الذكية، واستبدال الكتب الورقية بأُخرى إلكترونية في المدارس السعودية، ولنا أن نتخيل حجم التجهيزات الإلكترونية والتطبيقات اللازمة لكل المدارس السعودية-ولاحقاً الجامعات- لإجراء عملية التحول الرقمي وهي عملية ليست بقصيرة وتستلزم استثمارات ضخمة، الأمر ذاته ينطبق على مشروعات المدن الذكية وقطاع الصحة في المملكة.
Last month the World Bank released its flagship World Development Report entitled “Digital Dividends”.
The report is appealing because it does more than simply celebrate all the ways that digital technology has made the world a better place.
It also laments and warns against outcomes where the digital economy becomes divisive and exclusionary.
Unlike Professor Pangloss in Voltaire’s Candide, the World Bank does not believe that all is for the best in the best of all possible worlds. While few would argue with the good news, the less good news is often not so well understood.
First the good news. According to the report, more than 40 per cent of humanity has access to the internet.
Internet use has tripled from 1 billion to 3.2 billion people just in the last decade. Mobile phones are owned by more people in the poorest households than those that have running water, electricity and modern sanitation.
The digital economy has connected people, business and governments in multiple ways, creating a host of new production opportunities, expanded consumer choice, and the scope for entrepreneurship and self-employment.
Small enterprises with very few personnel can reach numerous customers in any number of locations through internet platforms.
As the report emphasises, at its best information and communications technology is a source of growth via increased trading opportunities, productivity, competition and employment.
Among the drivers of increased trade are lower transactions and capital costs, improved information flows, and product and process innovations.
Digitisation and the development of algorithms to perform routine tasks increase productivity.
Lower entry costs and more readily available information foster competition, which in turn spurs innovation.
Direct employment in information and communications technology activities does not involve large numbers, but activities enabled by it create many more jobs.
It has been estimated that each information and communications technology job in the United States creates five additional jobs. In China, the e-commerce sector has reputedly generated 10 million jobs in related services, accounting for 1.3 per cent of overall employment.
Dozens of governments have developed e-government platforms, with facilities for interactive communication.
These can be used to transact regulatory obligations, disseminate information, and communicate with citizens for a variety of purposes.
All this suggests that the digital economy is a valuable vehicle for development and one that reduces inequality in a world where inequality is on the increase.
But not necessarily so, according to the World Bank.
While the digital economy can have all the positive benefits enumerated above, the absence of what the World Bank calls an analogue policy foundation means that reality lags behind the promise.
If 40 per cent of the population has access to internet, it follows that 60 per cent does not. They are excluded and further marginalised precisely because of the rich opportunities offered by digital technology. What is needed to address exclusion, argues the World Bank, is a sound business climate, adequate human capital, and good governance.
The economics of the internet suggest a tendency towards monopoly, not so much in the case of hardware, but with software platforms such as Google and Amazon.
The sources of potential monopolistic power reside in incumbency advantages linked to information, economies of scale and lock-in effects linked to complex customised operating environments.
Vested interests, a poor regulatory environment and bad governance can sustain and reinforce these barriers to entry. Labour-saving technology can reduce employment opportunities. Lagging or underfunded education hampers skill development, intensifying the struggle between capacity and technological sophistication.
Technology then further emphasises skill differentials and deepens inequality.
As for e-government, the same exclusions based on digital access and skill levels arise.
Another problem in some jurisdictions is linked to the quality of governance. Instead of serving the citizenry, the personal information requirements needed for digital interaction can be used for control and repression.
Nobody is arguing for arresting the progress of the digital economy or that its huge benefits should be compromised. Rather, the argument is that the benefits fall short because policy failures mean they are poorly shared.
Source: scmp
Global experience shows that entrepreneurship stimulates job creation in the economy. The degree of entrepreneur success depends on the maturity of the underlying ecosystem.
Traditional pathways for job creation and growth, however, are at risk of not producing enough jobs in the future. The Government of Jordan has been encouraging entrepreneurship to shift these forecasts and accelerate the rates of job creation.
Jordan’s ranking in the Global Entrepreneurship Index, which measures both the quality of entrepreneurship and the extent and depth of the supporting entrepreneurial ecosystem in 137 countries, improved by 23 ranks between 2014 and 2018 (going from 72 to 49). According to the Global Entrepreneurship Index 2018, the score of Jordan is equal to the Arab region’s average score of 37%. Jordan outperforms the region in product innovation, technology absorption, competition, startup skills, and cultural support indicators.
On the other hand, Jordan lags in high growth, risk capital, risk acceptance, networking, and human capital indicators.
In 2019, the World Economic Forum (WEF) included 27 Jordanian startups among the top 100 in the Arab World. Jordan’s technology entrepreneurs have shaped the region’s tech scene in the last decade (Maktoob, Souq.com, Arabia Weather, Mawdoo3, and many others). There are thousands of Jordanian technology professionals, who assume senior positions in key technology companies in the Arabian Gulf region and look for good opportunities to work back in Jordan.
According to the survey, 94% of the Jordanian startups key founders hold BA degree or above, 62% have 10 years of experience or above, and 20% have 6-9 years of experience.
The majority of Jordanian entrepreneurs (71%) have previous experience working at middle- or senior- level jobs, and most of them (91%) worked as employees in a private enterprise, including their own, before establishing a business.
Jordanian entrepreneurs also tend to work in groups where co-founders bring in a mixture of diverse but complementary skills to support business operations.
These characteristics show high quality composition that align with the characteristics of WEF’s 2017 top 100 startups from the Arab World.
The World Bank surveyed the top 100 startups back then, studied entrepreneurship trends and policies, and published a chapter on entrepreneurship at the Arab World Competitiveness Report 2018 to inform government policies in the region.
As a step to support entrepreneurs’ aspirations, the Government of Jordan and the World Bank facilitated the participation of 14 leading entrepreneurs from Jordan at the 2019 London Initiative.
The entrepreneurs demonstrated the scale of ambition of Jordan's economic transformation, highlighted the growth potential in digital entrepreneurship, and pitched investment opportunities to global funds. Expansion into the wider regional/global markets is key for the Jordanian entrepreneurs, considering the relatively small size of the local market.
On challenges, Jordanian entrepreneurs perceive taxes as the key barrier facing their business (73%), followed by laws governing investments in startups (62%), excessive government formalities (58%), obstacles related to customs law and regulations (55%), and social security (52%). Focus group discussions provided insights on these challenges and suggested that tech-enabled entrepreneurs are unclear on the economic classification of activities that are tax exempted, burdened by the relatively high tax levy on imported/input services (26%), and troubled by the requirement to file tax on a monthly basis. Startups also expressed concerns about the complicated company restructuring process (increasing/decreasing capital, changing shareholders, etc), difficulty in obtaining work permits for skilled foreign labor, and inconsistent estimation of custom fees on imports. Clearly, there are specific legal and procedural reforms that the Government could implement to support businesses in Jordan. Entrepreneurs expect the Government to enable a friendly business environment, help open local and regional markets, and develop the local entrepreneurial ecosystem, according to World Bank’s survey.
In May 2019, the Government of Jordan introduced a new cabinet Ministry for Digital Economy and Entrepreneurship (MoDEE) to expand the mandate of the former Ministry of Information and Communication Technology and support digital entrepreneurship, electronic payments, and digital skills development. This comes as an organic step to support the growing role of the Government in supporting these digital economy pillars.
The Government has taken key steps in supporting the digital economy by endorsing a PPP model for expanding the national broadband network, supporting digital skills development for hundreds of youth, launching an ambitious plan for government e-payments, and supporting access to growth finance and global markets for entrepreneurs. These efforts will contribute to World Bank’s Moonshot initiative for MENA, which calls for doubling broadband access by 2021 and expanding access to digital payments.
To enable a business-friendly environment in Jordan, entrepreneurship ecosystem representatives (including Intaj, Oasis 500, Endeavor, JEIA, Startup Council, and others) and MoDEE have started a consultative effort, facilitated by the Word Bank and the Jordan Strategy Forum — a leading local think tank, to develop a policy matrix for addressing these challenges. MoDEE will recommend specific regulatory reforms to the Cabinet of Ministers for endorsement and lead the implementation afterwards.
To support the digital economy development in Jordan and the Mashreq region (Jordan, Lebanon, and Iraq), the Government of Jordan will host the first Digital Mashreq Forum in Amman on June 29-30.
The two-day high-level regional event will serve as a platform to discuss the role of digitalization in shaping the region’s future through the lens of government and business leaders. The Forum will provide a business networking opportunity for Jordanian entrepreneurs with regional and global investors. The Forum will also showcase Jordan as a regional hub for technology enabled services. Growing the entrepreneurship ecosystem and digitalizing business activities in Jordan would offer promising growth potential for the economy.
source: worldbank
Siemens scores six major cities, including Dubai, on their readiness for digitisation and their potential to become smart cities
Dubai is making excellent progress in its drive to become a smart city which embraces digitalisation and develops new ways of living, working and interacting, according to Siemens.
Its Atlas of Digitalisation report is based around the interconnected themes of Expo 2020 Dubai – mobility, sustainability and opportunity – and assesses how the fourth industrial revolution has already impacted urban life around the world, and the potential it could have in the future.
Data from 21 indicators has been analyzed by Siemens together with Signal Noise, part of the Economist Group, in Dubai, Los Angeles, London, Buenos Aires, Taipei and Johannesburg to produce a digital readiness score.
Dubai gained scores of six out of 10 for both readiness and potential. This compared to London which scored eight for readiness but only three for potential while Los Angeles scored seven and three respectively, Taipei scored six and three, Buenos Aires scored four and four and Johannesburg scored two and six.
The analysis recognises Dubai’s advanced implementation of digital technologies in areas such as smart metering, online connectivity, mobility and smart government, and initiatives such as Smart Dubai which are supporting its ambition to be the happiest city on Earth.
It also identifies potential for digitalisation to positively impact areas such as renewable energy, which Dubai is already addressing via its clean energy strategy.
The analysis considers areas such as smart electricity and transport systems, internet connections and digital governance services.
The score reveals the current level of maturity of each city’s digital infrastructure, and its preparedness for a connected future.
“Each city must address its own unique mix of challenges and opportunities by embracing digitalization; the key to sustainable, livable future cities,” said Dietmar Siersdorfer, CEO, Siemens Middle East and UAE.
“The Atlas of Digitalization gives us an all-important understanding of the current status of digitalization in cities around the world, and the data tells us Dubai has already made excellent progress in key areas. Dubai is on a successful path thanks to strong ambition and visionary leadership, and we hope the Atlas will inspire new ways of thinking to shape the smart cities of tomorrow, and realize the global potential of City 4.0.”
The analysis also takes into account areas such as innovation, greenhouse gas emissions and time spent in traffic to give the cities a Digital Potential Score, indicating where there is opportunity to grow digital capabilities to transform society and economy.
While each city is unique, they all share one characteristic - their ingenuity in using digital technologies to make infrastructure more efficient and productive, and to address challenges such as air pollution, congestion, population growth and natural hazards, Siemens said.
Source: arabianbusiness
