Industry Thought Leadership

How the Middle East Can Lead the Evolution of the Digital Economy

October, 2021
Steven Yi
President for the Middle East


While many organizations in the region are now advancing the digital transformation agenda, it is an opportune time to reflect on what this journey means when performed at scale. Analysts have predicted that more than 65% of global GDP could be digitalized as soon as 2022. On both a national and international level, the fruits of digitization benefit everyone, and the Middle East is actively contributing to this thriving and global digital economy.

Indeed, much has been achieved in recent decades when cultivating advanced ICT infrastructure in the Middle East. Countries in the region were among the first in the world to embrace 5G, as just one example. Many are now also at the forefront of domains such as AI and cloud computing, as well as smart city development. The COVID-19 pandemic was a spark that triggered a full-on digitization process in every corner of the region. In collaboration with our industry partners, we have found that the combined application of innovations in 5G, AI, cloud computing, and IoT are already producing significant gains in helping nations to rebound from the pandemic.

These technologies will soon underpin all business sectors in the Middle East because of their ability to enhance productivity, increase sustainability, and create new value in both existing and future industries.

Let us look at just a few scenarios where this is taking place currently. As a result of a new generation of ICT technologies, regional telecom operators have seen faster revenue growth and have been able to open up new revenue streams within other verticals. In the O&G and power generation sector, drones and robotic patrol machines are substantially improving maintenance and inspection productivity. In ports, crane operators are increasingly moving to office environments, and can now oversee multiple cranes simultaneously in real-time with full data visibility, reducing operational expenses. Today’s ICT solutions are also enabling health organizations to better share data across hospitals, government departments, and even among countries.

Perhaps most importantly, evidence shows that digital innovation of this kind has the net effect of creating more jobs. Huawei commissioned a team at the London School of Economics and Political Science to study this precise topic in recent years. While some jobs will undoubtedly be lost with widespread automation, for example, the study found that the situation should be manageable for the economy to absorb these workers into other employment. The study also found that the countries with some of the highest use of automation through robots—countries like South Korea, Germany, and Japan—often have comparatively low unemployment rates.

To realize the potential of this digital economy moving forward, it must by default be an open and transparent ecosystem. Our experiences over the last year in particular have made nations realize more clearly that we are interdependent as a global community. Global integration and economies of scale can make the whole world more efficient. To achieve these gains, we must work together openly and share both the risks and value. That means applying unified technology standards, as well as developing shared protocols for emerging technologies and applications. This is the only route to shared progress and prosperity.

Nations must also develop value-creation paths that align with their most suitable archetypes. These paths must recognize nations’ inherent strengths while still being anchored by their economic and technological realities. By 2023, it has been predicted that 75% of organizations globally will have comprehensive digital transformation implementation roadmaps, up from just 27% in 2020. The cultivation of a larger, more inclusive ICT talent ecosystem will be pivotal in the Middle East in particular to support these value-creation paths.

Ultimately, the principle of creating an open, cooperative, and standards-based technology ecosystem within the Middle East is speeding up the gains that both industries and nations are able to reap. We are encouraged to see almost all national development frameworks now prioritize this joint-innovation mindset. Through deeper cooperation, the technology sector can create lasting value for all nations, empowering people, enriching home life, and supping nations in the realization of the national development visions.