Arab Private Sector Forum Beirut 16 January 2019 DIGITAL ECONOMY - - PowerPoint PPT Presentation

DIGITAL ECONOMY IN THE ARAB WORLD: STATUS & THE WAY FORWARD

• Eng. Atef Helmy

Former Minister of ICT , Egypt

Arab Private Sector Forum

Beirut 16 January 2019

Why do we need to embrace the digital economy?

Socioeconomic impact of digitization

Enhancing digitization and creating digital markets can result in considerable economic and social benefits to societies and communities, through its potential to increase productivity, accelerate growth, facilitate job creation, and enhance the quality of life for society in general

Economic Growth Social Welfare Promote Innovation & Competition Job Creation Public Sector Manufacturing Education Healthcare Financial Trade

Macroeconomic impact Sectoral impact

3

Sectoral impact of digitization

$80

billion

$57

billion

$3.7

trillion

$107

billion

E-Health industry was worth $80bn globally in 2017 E-learning industry reached $107 billion in 2017 (estimate by “Global Industry Analyst”) The application of “Digital Manufacturing” is expected to create $3.7 trillion of value worldwide by 2025 During the first half of 2018, global fintech investment reached a record high of $57bn

E-Healthcare E-Education Digital Manufacturing Fintech

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Global impact of digitization

$1.16

trillion

4.7x €4.4

trillion

The digital economy in Asia Pacific will be worth $1.16tn by 2021 accounting for 60% of GDP The digital economy in the EU will be worth €4.4 trillion by 2020 Digitization impacts economic growth 4.7 times more than broadband rollout

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Digital Economy contributes to the achievement of SDGs

Technology has great potential to help deliver the SDGs… We need to harness the benefits of advanced technologies for all.

– Antonio Guterres, UN Secretary-General

Work & Business Generic description

• f the 6 factors

Mobility Participation & Security Health & Learning Infrastructure & Environment Food & Housing

 Smart Agriculture  Smart Building  E-Health  E-Learning  Connectivity  Smart Energy  Smart Water Mgmt  Smart Conversation  Connected Private Transportation  Smart Logistics  E-Banking  E-Commerce  Smart Manufacturing  E-government  Smart Police  Real-time disaster warning

ICT

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Status of the Digital Economy in the Arab World

The digital revolution is transforming the Middle East whereby digital technologies are disrupting every aspect of individuals’ lives, business, and governments.

Digital Consumer Adoption is high in the Middle East

Middle East Digital Consumers avg.:

15% 46% 45% 47% 50% 61% 88% 89% 97%

SMEs with online presence Individuals participating in social media Social media users who use Arabic People watching online videos daily Households with Internet access Individuals who are regular Internet users Users that go online daily Facebook subscribers accessing daily 3G network coverage

Smartphone penetration in UAE & Bahrain is 100% vs. 80% in USA (will reach 60% across ME in 2020) MENA region ranks 2nd worldwide in number of YouTube video views. MENA region has the fastest growing video consumers on Facebook 50% of ME population is below the age of 24, therefore there is a lot of potential for digital adoption.

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Digital business adoption is low in the Middle East, however has high potential for growth

18% 15% 7% UAE Saudi Arabia Egypt

SME Online Presence: Successful examples of digitized business services in Middle East:

Souq is the Middle East’s leading e- commerce marketplace; facilitating connection of 75,000 Middle Eastern businesses with customers. Acquired by Amazon for $580m Careem is able to compete regionally with Uber using a localized strategy Etisalat and Du in the United Arab Emirates and STC in Saudi Arabia have launched several smart cities and IoT services

9

Digital government adoption is very low in the Middle East (6%)

18% 15% 8% 16% 15% 14% 12% 9% 8% 8% 7% 5%

E-government adoption by Country: A huge variance exists among Middle East countries, yet some good examples are paving the way for the rest:

• UAE is a world role model for e-government services
• Saudi Arabia & Bahrain have achieved very good progress
• Egypt has started a very aggressive e-government digital transformation plan

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Middle East is capturing only a fraction of its digital potential

Digital contributes to only 4.1% of GDP

8% 6% 4% 8% 5% 4% 4% 4% 1% 0.4%

Share of digital contribution to GDP by country:

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The Way Forward:

Digital Economy Strategy

In UAE’s 2021, Digital technology is identified as

• ne of the top seven

primary national sectors

Arab countries are pursuing various digitalization strategies

Saudi Arabia’s National Transformation Program 2020 has prioritized digital transformation as

• ne of the top four

Common National Goals Egypt’s Vision 2030 envisions a competitive, balanced, and diversified economy, dependent on innovation & knowledge

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The Arab Digital Economy Strategy was launched during the Digital Economy Conference in Abu Dhabi (16-17 Dec 2018)

Under the patronage of: Together with: Endorsed by: Supported by: Developed by:

Cairo University

Digital Strategy Development

Three dimensions

Geographic dimension Stakeholders dimension Tools dimension

Infrastructure Devices Applications

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Digital Strategy Development

Geographic Dimension

We clustered the Arab countries into three groups:

› Achiever Group: these nations are mainly

developed economies. They continually boost user experience and use big data and IoT to develop a smarter and more efficient society.

› Promising Group: Nations in this cluster

experience the biggest GDP growth from ICT

• Infrastructure. Their focus is on increasing ICT

demand to facilitate industry digitization and high- quality economic growth.

› Beginner Group: these nations are in the early

stage of ICT infrastructure build-out. Their focus is

• n increasing ICT supply to give more people

access to the digital economy.

Infrastructure Devices Applications

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Digital Strategy Development

Tool Dimension

The “Tool Dimension” is divided into three groups:

› Infrastructure: It is essential to set up a common

networking infrastructure, which can act as a base for integration and interoperability. The infrastructure allows agencies to be connected in a dedicated network to facilitate secured electronic delivery of information and services for inter and intra agency communications.

› Devices: The component that enables the users to

perform a wide range of functions through common, convenient and one-stop access channels to Government related services and information. Such access channels can be mobile devices, telephone, fax, counter services and Internet

› Applications: These provide end-to-end services to

citizens and businesses and require many agencies to interact and coordinate with each other.

Infrastructure Devices Applications

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Digital Strategy Development

Stakeholders Dimension

The “Stakeholders Dimension” consists of:

› Government: This layer aims to show the digital

transformation in sectorial level and how the digitization disturbed the traditional business model and created new economy parallel to the old one

› Business: Creating the right environment of

innovation that allow the ICT companies/start-ups to develop new technologies and applications in different sector – this requires developing our own “Silicon Valley” for all the Arab countries

› Individual: The digital ecosystem should be

citizen/user centric. This is important as one of the main features which differentiates this from the industrial revolution is the mass customization

Infrastructure Devices Applications

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• UAC is seeking to launch a state-of-

the-art digital marketplace through public-private partnership.

• The project is the cornerstone of the

Arab Common Market and is a trading platform that leverages technologies such as AI, IoT, and blockchain to simplify and facilitate cross-border trade and exports from the region.

The Union of Arab Chambers (UAC) aims to unlock intra-Arab trade by harnessing the power of the digital economy

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The private sector’s role is vital to the success of digital transformation, as it introduces new digital services, creates user awareness & demand for digital transformation, supports with knowhow and investments, and is the driver of public-private partnerships.

The private sector has an important role to play

Private Sector Robust Strategy & Roadmap Successful Digital Transformation

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“The Digital Economy is the road to Arab Unity & Prosperity”

Thank you