Digital economy

The ICT sector is a key economic sector in the modern digital age, as it plays a vital role in development and innovation. Research shows that encouraging investment in ICT sector companies is crucial in driving digital development and innovation. The growth of this vital sector can be stimulated by increasing the support of financial institutions and their contribution to the venture capital of ICT sector companies, which enhances employment, supports innovation and contributes to enhancing economic competitiveness at national and international levels.

ICT is one of the most advanced fields of technology in the modern world, as many ICT innovations contribute not only to the development of the sector itself, but also to that of all other sectors. Such developments would not have been possible without significant investments in research and development (R&D) in ICT technologies. Government investment in R&D is one of the areas with the highest returns in economic terms, and in development in general. The global average return on government investment in R&D over the past decade was around 20 per cent, greater than the returns on investments in asset classes such as stocks, bonds or others. This investment is important since this return is distributed over various types of economic activities, and is not limited to the sector itself.

ICT is one of the most important levers of economic and social development, so up-to-date data on the ICT sector and its contribution to the national economy is of paramount importance. The few available statistics provided by the World Bank for Arab countries are old and outdated, and thus difficult to rely on in strategic planning. Arab countries also lack diverse data sources on the contribution of ICT to the national economy, as they rely heavily on telecommunications revenues, thus ignoring other important data such as sector expenditures, trade in ICT goods and services, and percentages of purchases made online. There is therefore a need to include the measurement of the sector’s economic contribution within the goals of the Strategy.

Promoting the ICT sector in the Arab region is essential to enhancing economic and social development in Arab countries and strengthening global competitiveness. In this context, it is important to increase the number of companies specialized in emerging technologies in ICT fields by encouraging entrepreneurship and providing support. Foreign direct investment (FDI) attracted by ICT sector companies should also be increased by creating an attractive investment environment and providing incentives and benefits to investors. The share of the ICT sector’s contribution to GDP must be raised by improving digital infrastructure and developing human skills, which would achieve sustainable growth in the sector and enhance its role as a key lever for economic growth in the region.

Arab countries have not taken full advantage of ICTs to adequately increase their industrial efficiency. Thus, it would be useful for countries to develop relevant strategies, which extend beyond the industrial sector to include all productive areas whose efficiency could be increased using digital technologies.

The lack of significant progress in ICT’s contribution to Arab economies is likely to deepen the existing problem: Is there still an opportunity for Arab countries to catch up with the innovation race in the field of ICT, especially since innovation efforts are increasingly concentrated in a limited number of countries, while the rest of the countries are turning into mere markets for consuming services through local agents? It is worth noting that we live in an era of giant companies that transcend national borders and seek to expand their markets continuously and to acquire initiatives and small businesses to prevent any chance of competition.

Promoting exports of ICT goods and services in the Arab region is vital to enabling economic development. This process requires effective strategies, including marketing programmes and initiatives to support the sector’s exports. Programmes can include global promotional campaigns and active participation in international exhibitions to familiarize global markets with the quality and diversity of goods and services. Incentives should also be provided to exporting companies to stimulate production and innovation, with a focus on improving the quality of goods and services through increased awareness and training on international standards. Such incentives should include tax concessions, financial support and facilitation of customs procedures. Despite the challenges related to international competitiveness and the geographical dimension, there are promising opportunities for Arab countries to enhance ICT goods and services, which is an important step towards achieving sustainable economic development and enhancing the competitiveness of their products in global markets.

The subcluster on e-business encompasses topics related to the availability of e-business services in Arab countries, in particular online banking and e-commerce. It also deals with the maturity of applications associated with these services, such as business-to-business (B2B) and business-to-consumer (B2C) e-commerce, as well as measuring the availability and use of e-commerce standards (e.g. electronic payment systems and digital currencies) in various economic activities.

The development of e-business, especially e-commerce, has a promising future in the Arab region. Arab digital strategies (both national and regional) should align with these aspirations shared by both producers and consumers in developing new forms of economic relations, and leveraging them to transform the economy into a modern and attractive style for investments.

Expanding the e-commerce market in Arab countries and facilitating access for regional and international consumers is of paramount importance in fostering economic growth and enhancing the e-commerce shopping experience through the provision of a wide range of products and services online.

To achieve this, efforts should be made to increase the volume of commercial transactions using e-commerce mechanisms. The completion of comprehensive legislative and regulatory frameworks governing e-commerce and e-payment in Arab countries is essential to ensure a safe and efficient trading environment, thereby enhancing trust between producers and consumers, and making e-commerce a suitable and reliable means of conducting commercial transactions in the region. This enables Arab countries to realize significant economic and social benefits and open up new avenues for investment and innovation.

ICT sector employment plays a crucial role in supporting economic growth, developing technology and improving services. It provides numerous job opportunities for individuals and leads to increased productivity and improved economic performance. Dedicated human resources should be made available to develop and improve the sector. This encourages skill development and continuous learning through the pursuit of technological courses and the development of capacities to keep pace with new technologies.

E-employment relies on the use of ICT as a means of searching and finding work (online, SMS, advertising, social and professional networks).

While there have been many initiatives to maximize jobs and direct employment opportunities generated by the ICT sector, empirical evidence on employment growth in this area in Arab countries and detailed information on youth employment, particularly young women, are scarce. The lack of relevant statistics complicates assessing the balance between jobs generated by the sector and those eliminated due to automation in industrial, commercial and service processes. Despite the spread of e-employment mechanisms in many countries, “remote work” remains limited and is more concentrated in youth employment, while initiatives for remote work targeting women or persons with disabilities remain rare.

Developing the capacities of employees in ICT is a strategic investment that can help companies improve their productivity and foster growth. Corporate and employee training programmes in ICT should be tailored to specific economic sectors.

ICT sector employment plays a crucial role in supporting economic growth, developing technology and improving services. It provides numerous job opportunities for individuals and leads to increased productivity and improved economic performance. Dedicated human resources should be made available to develop and improve the sector. This encourages skill development and continuous learning through the pursuit of technological courses and the enhancement of capacities to keep pace with new technologies.