According to a research by Strategy& Middle East, part of the PwC network, Gulf Cooperation Council (GCC) countries must build ‘tech champions’ to compete with the United States and China.
With the right policies and by developing tech champions, the region can reach the level of advanced digital economies, adding $255 billion (AED936 billion) to regional GDP by 2030, said the report.
“The digital economy of the GCC region is expanding rapidly. However, the region’s focus remains tilted toward traditional IT, and the maturity of its tech market lags behind other parts of the world.
“The emergence of GCC tech champions can play a significant role in closing this gap. Tech champions provide the economies of scale and scope necessary for innovation, talent attraction, job creation, large-scale investment, and exports,” stated Strategy&.
Globally, the digital economy is growing six times as fast as its traditional counterpart. The superpowers of China and the US are presently in a commanding position within the digital economy because of their tech champions.
They account for 90 percent of the market capitalization of the world’s 70 largest digital companies.
Strategy& Middle East partner Chady Smayra, said: “While the GCC digital economy is growing rapidly, that alone will not make the region internationally competitive.
“Investment in research and development (R&D) and in startups remains limited, while foreign companies are still responsible for the bulk of its product development and service delivery,” Smayra added.
With the help of tech champions, regional GDP could jump by a cumulative 5 percent by 2030, creating some 600,000 technology jobs, according to Strategy& Middle East research.
Digital solutions, including emerging technologies, will fuel most of this growth, added Tarek El Zein, partner with Strategy& Middle East.
The Strategy& report shows that technology champions develop in three key stages: creating an anchor portfolio and value propositions, scaling up and expanding geographically and diversifying and monetizing at scale.
“Gulf countries must create and promote tech champions to build a strong digital economy and facilitate national resilience.
“At present, they are largely buyers and adopters — an unsustainable position. Instead, they should become tech disruptors by enabling the development of their own tech champions, with the government acting as a facilitator,” concluded Wissam Abdel Samad, partner with Strategy& Middle East.
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