Dubai: Saudi Arabia has become a “tipping country” in the Arab world as the country has the region’s largest stock market, owns the Middle East’s largest TV stations, while its citizens post more tweets than any other Arab country, an industry expert said.
“With head-spinning sums in play, the stakes couldn’t be higher. The future markets of tech companies in EMEA reside in emerging markets like Saudi Arabia, while Western tech markets have become increasingly hostile to tech companies, they are welcomed in Saudi Arabia where it is clear who is in charge,” said Sam Blatteis, CEO of regional public policy advisory and research firm The Mena Catalysts and ex-Google Head of Government Affairs and Public Policy for Gulf Countries.
With Saudi Arabia opening up its tech industry, industry experts said that there is no doubt that digital transformation will be instrumental in driving socioeconomic growth across the region.
In the digitised economy of the future, Abdul Rahman Al Thehaiban, senior vice-president for technology at Oracle Middle East and Africa said that the entire region stands to benefit from the digital revolution.
Reports show that Saudi Arabia’s internet penetration has soared from single-digits in the year 2000 to 64.7 per cent in 2016. Out of a population of 32.3 million, 20.81 million are internet users. Saudi Arabia’s $3.5 billion (Dh12.8 billion) e-commerce market is on track to jump 250 per cent to $8.35 billion in 2020, the highest growth forecast of Amazon’s Payfort for a Gulf state, in part because Saudi Arabia has the region’s largest average revenue spend per user.
Saudi Arabia’s ICT spend expanded 6 per cent last year to over $36 billion while industry veterans predict that it will expand another 8 per cent in 2018 to nearly $40 billion.
The Saudi government matters
According to Statista stats, the most popular social network was mobile messenger WhatsApp with a 73 per cent penetration rate, followed by YouTube at 71 per cent penetration rate, Facebook has a 66 per cent penetration rate while Instagram has 54 per cent and Twitter 52 per cent penetration rate as of third quarter of last year.
“I think tech companies are waking up to the fact that the Saudi Government matters a lot. Governments are second only to customers in their ability to affect company’ business revenues. Ultimately, policy problems matter to multi-nationals because there is a dollar value assigned to them. Many tech companies from Amazon to Facebook hiring public policy heads to engage the Saudi government. And other tech companies must catch up fast,” Blatteis said.
The value at stake from the Saudi Government and its ICT laws are huge, he said and added that companies approaching them in a disciplined and inclusive way capture more of it.
“The Saudi Arabia of today has become a different country,” he said.
Prashant Kolleri, managing director for Saudi Arabia and Pakistan for market research and analysis services provider Kantar Insights, said that with several transformation initiatives happening across economic and social sectors, it opens up lots of opportunities for innovation and applications, talent development, local creativity etc.
“Tech is so integrated into all economic and social sectors today; the pace of change happening in the kingdom does make it a high opportunity market,” he said.