UAE is the most digital-friendly country in the Middle East

The country offers an impressive trade infrastructure coupled with a supportive business environment

United Arab Emirates, June 5, 2018

The UAE is the most digital friendly country in the Middle East and also the best country where digital companies can thrive, according to a new study.

Ranked 24th worldwide and the best performer in the region, the UAE offers an impressive trade infrastructure coupled with a supportive business environment. Bahrain was ranked second in the GCC and 38th globally, according to Euler Hermes' report titled 'The enabling digitilisation index: Which countries are digital friendly'?

While Qatar ranked 33rd, Saudi Arabia 50th, Oman at 53rd, Jordan at 64th, Kuwait at 65th and Egypt 80th, globally.

'The UAE is the best performer, thanks to an impressive trade infrastructure coupled with a supportive business environment,' said Mahamoud Islam, senior economist for Asia, Euler Hermes.

Among sub-indexes, the UAE scored 88 points on infrastructure, 86 on regulations, 69.5 on knowledge, 63.7 for connectivity. Overall score totalled 61.8, surpassing countries like Spain, Italy, Malaysia, India and Russia, among others.

A recent McKinsey's analysis indicates that a unified digital market across the Middle East will have 160 million potential digital users by 2025 which could contribute up to 3.8 per cent annually in GDP, amounting to approximately Dh348.65 billion.

Jyoti Lalchandani, group vice-president and regional managing director, Middle East, Turkey, Africa at IDC, said there are several reasons why the UAE is undoubtedly the best country in the region for digital companies to thrive because it provides a compelling value proposition, given it's strategic location, political security and stability, social and cultural openness, and world-class infrastructure.

'Digital transformation is not just about making government paperless, but also about leveraging the power of digital technology to innovate processes so they are more integrated with the front end, more efficient, and more agile in their response to change,' he said.

Likewise, simply putting services online is no longer sufficient, he said, adding that the government must leverage data to optimise service value streams across government programs.

'In line with this, improvements in cross-departmental collaboration will enable governments to offer a personalised experience to citizens. All these investments will further encourage foreign companies to invest in the UAE,' said Lalchandani.

By 2020, the number of companies who have deployed a digital platform will have more than doubled to 60 per cent of organisations, he predicted.

Saurabh Verma, associate director, digital transformation practice at Frost & Sullivan, noted that the UAE government's vision to drive other industries and reduce dependency on oil revenues in parallel, the overall ecosystem for the development of industries is highly conducive, the policies are very supportive, the speed of execution to complete legalities, paperwork, processes, licence issue is very fast, dozens of dedicated free zones offering attractive benefits for companies to set up is another good reason are some of the reasons that make UAE the best country for the digital companies to thrive here.

He said digital companies typically start small, and run lean operations; and free zones are a perfect fit for them.

'The demographic mix of the UAE has also contributed to the growth of digital companies significantly. UAE is a highly cosmopolitan place with expats from more than 50 countries, all with varied demands and consumption patterns. The market is ripe and quickly evolving from a digital services consumption perspective,' he said.

He advised that a lot has already been done in the form of creating a conducive ecosystem for the development of digital companies in the UAE, but, the country needs a better start-up ecosystem, with government policies and incentives being only one pillar for that.

'The other pillars such as strong accelerator and incubator circle, availability of angel investors, seed funds, VC's, are extremely critical, which are relatively weaker and need to be further worked upon,' he concluded.

IDC's Lalchandani said the UAE must continue to recognise the value of information technology as a useful tool for enabling social and economic development.

'Technology has now caught up, and the transition to the third platform - mobile computing, social media, cloud computing, and Big Data - is digitally transforming nearly every aspect of individuals' and enterprises' lives. This is all leading to a new wave of technology breakthroughs - robotics, natural interfaces, 3D printing, internet of Things (IoT), cognitive systems, and next-generation security -poised to bring further disruption.

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