Digital technologies key driver in diversifying economies

Digital is now identified as a vital enabler of economic diversification and growth

Gulf News

For countries in the Middle East region, digital technologies are seen as a key driver of efforts to diversify economies and transform communities, according Accenture’s Technology Vision 2016 report.

The report shows digital is already an enormously powerful driver of economic growth, with over 20 per cent of world output now linked to digital skills, capital, good and services. Digital skills and technologies have the potential to generate an extra $2 trillion (Dh7.34 trillion) in global economic output by 2020.

For businesses and governments in the Middle East, digital is now identified as a vital enabler of economic diversification and growth at a time of uncertainty on a global scale, the report shows.

“Research for our Technology Vision 2016 shows that eight out of 10 respondents to our survey expect rapid or unprecedented acceleration in the rate of technology change over the next three years. That said, any coordinated digital strategy remains in its early stages in most countries in the region. Our research highlights significant variation in the take-up of digital by companies. For example, whereas 44 per cent of UAE-based businesses now use customer analytics to drive retail business, just seven per cent of companies in Saudi Arabia report doing the same.”

Targeted investments

The report also show that digital offers huge potential for the region’s citizens. The Accenture Strategy Digital Density index shows a direct link between targeted investments across digital skills, technologies and accelerators (collectively “digital density”) and economic growth. For example, a 10-point increase in Saudi Arabia’s digital density could see a GDP increase of 4.2 per cent by 2020 (equivalent to $31.4 billion). The same increase in digital density in the UAE could add US$13.8 billion to 2020 GDP and in Qatar it could add $7.8 billion.

“We know from our Technology Vision 2016 research that over 60 per cent of Middle East companies are now actively investing in digital technologies in select business units. However, marked discrepancies are evident in the impact executives expect digital to have in their respective countries of operation,” the report said. “In Saudi Arabia, for instance, 21 per cent expect the industrial internet and the Internet of Things to result in a complete transformation of industry. That contrasts with just 6 per cent of executives in UAE-based businesses.”