Gulf countries are showing significant progress in the growth of the digital economy.
Both the government and private sectors are taking impressive measures to promote digitization.
Consequently, Middle Eastern countries are well-poised to become the world’s leading digital economies.
With several contributors to this journey, some high-impact technologies like AI, automation, 5G, etc., are shaping this economic transformation. With the digital economy, the overall assets of the companies are growing too.
More and more Gulf based companies are becoming asset-intensive companies. And that’s the reason why they’re also seeking asset management solutions.
Let’s find out what’s making their economy and assets grow like never before.
5 Elements Of Digital Economy Development In The Gulf
Here are the top five determinants that reflect the development of the digital economy in the Gulf.
Element #1: AI and Automation
Vendors are expanding the market for their products by using technology and automation.
For instance, small-scale business owners are actively deploying and leveraging the benefits of artificial intelligence on eCommerce platforms. With AI and machine learning models, they can:
- gain insights on consumer behavior,
- study their likes and dislikes, and
- track purchasing history.
Such data helps these vendors strategize their sales and marketing efforts effectively.
It indicates that the benefits of a digital economy usually associated with large corporate organizations are penetrating down to the lowest common denominator in the Gulf region today.
AI, as a strong determinant of digital economic growth, is going to have an impact of US$320 billion on the Middle East by 2030.
Element #2: 5G Rollout
Currently, the economic policies of almost all countries in the Gulf region are centered around reducing dependency on oil-based ventures.
They are trying to promote a knowledge-based service economy, which has a high dependence on the internet and data in the present age.
Consequently, governments in the Middle East have already put the 5G rollout on high priority.
Countries like the UAE are planning to establish integrated smart cities using the 5G technology, which would give their digital economy a major boost.
In fact, UAE authorities declared their plan to push for an 80% coverage currently and a target for complete 5G coverage by 2025.
Element #3: Enterprise Asset Management
Digital economies are heavily dependent on data. And management and analysis of such data have already become big in Gulf countries.
Today, along with the creation of niche products or quality services, companies in the Middle East are trying to establish mechanisms to manage data effectively.
The use of enterprise asset management (EAM) software in large-scale organizations is one such mechanism. This software helps organizations track all their assets regularly to analyze their performance from different economic prisms.
Having a good product or service and dynamically changing its experience for end-users is a great combination. And enterprise asset management enables just the same for companies.
In a post-pandemic world, remote asset management in the Middle Eastern countries is already getting recognition.
MarketsandMarkets included data from Saudi Arabia and the UAE in computing the global growth forecast for the EAM market. It is forecasted to reach 5.5 billion by 2026.
Element #4: Evolving Forms of Money
There was a lot of buzz for blockchain technology and the whole cryptocurrency bubble lately in the Gulf region.
Moving a step ahead, the global digital economy is now seeing newer forms of money emerging, such as Non Fungible Tokens or NFT.
NFTs are only one example of where a new measure to quantify, buy, or sell art was developed.
Also, as these newer currencies emerge, the likes of Bitcoin are still growing steadily in the Middle East, contributing to improved access to modern financial services in its own way.
There are a few similar instances like:
- the increase in card payments in Saudi Arabia alone by 70% from 2019 to 2020, and
- a startling 9% growth in cashless transactions in the UAE between 2014 and 2019.
These are great examples of the growing trust in digital money.
Element #5: Strengthening Privacy Aspects
A data-heavy economy should necessarily have ways to ensure data security and consumer privacy.
Studying consumer data to enhance the experience is justified, but preventing unauthorized use is a responsibility that companies should own.
Cybersecurity measures are increasingly becoming standardized and strengthened in the Middle East.
Strong legislation is in place for the same, considering how crucial the digital exchange of money, ideas, etc., will become soon.
The Final Argument
The Gulf countries are drifting away from being heavily dependent on oil trade to an economy with several exciting avenues.
The opening up of these new doors is possible only with increasing levels of digitization. AI, 5G, Enterprise Asset Management, etc., are all the pillars of this growing Arabic digital economy.
It will be appealing to see how the region advances from here on and what’s in store for the future.