IT growth spurt expected in UAE

Dubai: The UAE is poised to become the regional information technology hub fuelled by Government initiatives and the high rate of internet usage, a Dubai Chamber of Commerce and Industry (DCCI) analysis said. It is based on a report by research firm Business Monitor International.

The report said the value of IT market in the UAE is expected to witness an exponential growth of about 47.47 per cent to $4.65 billion (Dh17.10 billion) in 2013 compared to $3.15 billion in 2009 (Figure 1).

Fundamental drivers for this market include local and federal government initiatives and development of the non-oil sectors, which include real estate and tourism. Government spending and investment will provide support to the IT market. Positive growth due to these drivers should prevent stagnation of the UAE IT market due to the downturn.

 Spending strong

Despite a fall in oil prices, exports from Dubai to Gulf countries were still rising. It states that, "Spending should continue to be strong in traditional sectors such as government and verticals, while other sectors such as health care, retail and education should also offer opportunities."

Local governments account for around 20 per cent of all IT services spending, and with Dubai expected to spend between $1.6 million and $2.2 million per year implementing its plan to get 90 per cent of government services online, there remains a market for high-quality ICT products and services.

"The Chamber is one of the leading organisations in providing most of its important services electronically," says Hamad Bu Amim, director general of the Dubai Chamber.

This includes the registration and modification of membership data, registration of the certificate of origin, endorsing signatures, and providing legal advice to businesses, among others.

"Encouraged by the response to our electronic services, the Chamber is continually striving to develop its services in accordance with latest innovations in the technological field. The total number of electronic transactions by our members on the Chamber's website in 2008 touched 720,000, while the figures at the end of September 2009 was more than 500,000 which shows a distinct rise in the services enjoyed by traders and businessmen," Bu Amim said.

He said with the help of government initiatives, especially in Dubai, the UAE IT market has grown and is now ready for the next phase of development. This could see the UAE become a regional IT hub. The UAE's strategic location, growth in the UAE economy and demand from the government is likely to maintain high growth in this market.

Payments

"The majority of UAE e-commerce users make their payments through credit cards. The booming economy, its burgeoning population and wide adoption of internet, provide an ideal context for a thriving e-commerce scene. Our survey revealed a massive size for B2C e-commerce in the country. This presents opportunities for global and regional e-commerce players to tap into this growing market," Jawad Abbassi, general manager of Arab Advisors Group, said.

According to Muhannad Mohammad Ebwini, general manager, OneCard, e-commerce in the UAE will account for more than $36 billion in 2010 while the present volume of e-commerce in the Gulf touched $100 billion.

He said a quarter of UAE residents used the internet for commercial transactions. Studies also indicate that global e-commerce will touch $13 trillion in 2012.

The report said that in order to increase growth further, the government should focus more on e-government development to create more awareness about IT amongst the population. Catering to the needs of IT companies in the region could help develop the UAE as a regional IT hub.