As the world eagerly awaits one of the most sought-after events in the Middle Eastern region, the IDC Middle East CIO Summit 2022, we caught up with Mr. Jyoti Lalchandani, IDC’s Group VP and Regional MD for Middle East, Turkey, and Africa to get his insights into the recovering GCC region and major trends which will govern the regional marketplace in the short-term.
With the scars of COVID-19 still reminiscent in the marketplace, how do you assess the situation in the Middle East Region now? Is the region recovering? And what is the fastest path to recovery?
Yes, the region is certainly on its way to recovery. the overall ICT spending, including telecommunications and IT, across the Middle East (including Egypt and Iran, excluding Israel) is expected to recover from a contraction of 3.2 percent in 2020 to grow at 6.2 percent in 2021.
The key driver of this growth is the expected recovery of the regional economy and the return of consumer confidence and spending, especially in the Gulf. Global demand has also been improving, which is supporting the recovery of the region’s economies. Oil prices have recovered well in 2021 to top $80 a barrel, shoring up revenues for many governments in the Gulf region, most of which have provided significant stimulus packages.
Vaccination drives have been proceeding aggressively in the Gulf countries and the spread of the pandemic has been well contained. However, much of the rest of the Middle East is lagging behind in terms of vaccination rates. Travel has now begun to gradually open up in the Gulf region, and property prices in the Gulf have risen significantly. Mega events like Dubai’s ongoing Expo 2020 and Qatar’s FIFA World Cup next year will further boost tourism and investment.
One of the major markets that will drive growth in the region is Saudi Arabia, which is jumpstarting its economy with a $3.2 trillion domestic investment plan aimed at driving growth over the next decade to help achieve the goals of Saudi Vision 2030. This massive economic package and the many giga projects to be launched by Saudi Arabia, such as NEOM, the Red Sea Project, and Al Ula, will infuse investment and growth in the country and drive a significant expansion of its digital infrastructure.
On the back of these factors, the key economies in the region are all expected to recover from the contractions seen last year and continue on that trajectory in 2022. However, uncertainty about the economic recovery does remain in the air, with the continuing spread of the Delta variant in the U.S. and other parts of the world, as well as global power shortages and an economic slowdown in China.
What will be some of the key trends shaping markets in 2022?
The pandemic has led to an expansion in the depth and breadth of the “digital consumer”. Many consumers across the region have significantly increased their rate of online purchases using digital services such as digital banking and government services, telemedicine, and digital payments. These changing consumer habits are shaping the responses of governments and businesses alike, forcing them to accelerate their digital transformation plans.
Newborn digital native players, Direct2Consumer players, FinTechs, and learning apps armed with advanced artificial intelligence (AI) algorithms are disrupting most industries, or at least nibbling away at their edges. In response, governments and traditional businesses across the region are increasingly embracing a “digital-first” approach. Indeed, IDC research shows that nearly 50 percent of organizations across the Middle East have brought forward their digital roadmaps by about a year – and 14 percent by two years or more.
Investments in advanced tech such as AI, machine learning, and the Internet of Things have accelerated to enable the rise of new digital use cases. At the same time, the cloud is increasingly becoming the foundational technology platform for digital transformation.
Governments are rapidly developing new regulations for cloud, data privacy, AI, and others to create an environment that encourages the safe use of new technologies and fosters innovation. The tech-enabled start-up ecosystem has blossomed in the past few years, leading to the emergence of regional unicorns and prominent FinTechs.
With the thrust from governments and growing funding, this ecosystem is expected to scale even further. Foreign investments in the technology industry will accelerate. Investments in in-region datacenters by hyperscale cloud providers are set to increase, as our investments in innovation centers and competency centers in key countries such as Saudi Arabia and Egypt by global and regional tech firms.
Looking forward, as we come out of the pandemic in 2022, the recovery could be bumpy and uneven across different countries, industries, and segments. As such, organizations will need to consider developing “digital resiliency” – that is the capability to not only be resilient to future disruptions but also to be able to capitalize on the changed conditions by leveraging digital competencies.
The IDC Middle East CIO Summit’s 15th edition has been announced. What will be the main areas of discussion?
The annual IDC Middle East CIO Summit is the place to come for thought-provoking, in-depth discussions about cutting-edge tech solutions, emerging use cases, and proven strategies for driving success. For 15 straight years, it has served as the ICT world’s premium source of learning about the industry’s latest developments.
The 2022 IDC Middle East CIO Summit will run under the theme ‘Accelerating Your Journey to a Digital-First World’, with an in-person event taking place at the Ritz Carlton DIFC, Dubai on February 22-23, to be followed by a one-day digital installment, hosting more than 500 CIOs and influential business leaders from across the region on February 24th.
The event will feature a series of presentations, panel discussions, real-life use cases, and individual technology tracks.