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Unlocking The Potential Competitive Value Of The MENA Digital Economy

Written by: Salim Sheikh, Executive Contributor, in collaboration with Fatima Al Husseiny.

Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.

 

In this article Salim Sheikh, Executive Contributor, teams up with guest author Fatima Al Husseiny, to advocate topics relating to “Tech for Social Good”, and “AI for Society”. Their joint goal is to help raise awareness about AI & Emerging Technologies for all people and cultures. The Middle East and North Africa (MENA) region is becoming more and more affected by the generational change that is encouraging youth (namely, Generation Z), to work in more diverse areas of technology.

MENA’s digital economy to reach $100 billion by 2023 (source: GCC News, Jul 2021)


In this article, we posit our thoughts on the following question:


How can the tech ecosystem motivate the present and upcoming generations to do so? And in doing so, unlock the potential competitive value of the digital economy for the wider MENA region.


Setting the Scene


The Middle East and North Africa (MENA) region, as well as the larger MEA region, has a varied history. Regarding the former, the Gulf Cooperation Council (GCC), which is made up of Saudi Arabia, Qatar, Oman, the United Arab Emirates (UAE), Bahrain, and Kuwait, has one of the best standards of living and overall high gross domestic products in the world (GDPs).


Based on a recent World Bank publication, ¹ the Middle East and North Africa (MENA) region's economies are predicted to develop by 5.4% in 2022, the fastest rate since 2016. This prediction is made in this issue of the World Bank's MENA Economic Update. Uncertainty persists, nevertheless, due to the unpredictable nature of the Ukrainian conflict with Russia and the lack of consensus among scientists regarding the COVID-19 virus's evolutionary route. Due to the fact that regional averages conceal significant national disparities, the economic recovery may be unequal. While weak nations lag, oil producers may profit from rising energy costs and higher COVID-19 immunization rates. Due to the poor performance of most nations in 2020–2021, per capita GDP, which is a more true indicator of people's standard of life that barely surpasses pre-pandemic levels. Moreover, 11 of the 17 MENA economies may not reach their pre-pandemic levels by the end of 2022 if these projections come true.


While the Middle East and North Africa (MENA) area is lagging behind in terms of digital infrastructure, governance, and skills, digitalization is the potential key that may help to increase youth employment in the region. Only with governmental, political, social and financial reforms will the MENA area be able to benefit from the latest technological advances.


The remainder of this article focuses mainly on youth ‒ namely, Generation Z ‒ as per the infographic depicted below courtesy of Pew Research. ² This age group represents the future generation who stand to benefit most from the potential competitive value of the MENA digital economy.

(Source: Pew Research, 2019)


Aiming to advance AI, the governments of the UAE, Saudi Arabia, Qatar, and Egypt have unveiled comprehensive plans. However, in the early months of the COVID-19 outbreak, much of their impetus was lost as people's focus shifted to addressing the developing health problem, the general economic downturn, and the crash in oil prices.


Despite the short-term setback, the epidemic has highlighted the need for economic diversification, and a number of MENA countries have expedited investment in non-hydrocarbon industries where AI might play a significant role.


In this sense, MENA countries are investing heavily in AI education, training, and research due to their huge youth populations. According to a recent report released by Google, artificial intelligence (AI) has the potential to have a significant financial impact on the MENA region's economic growth with the power of AI adoption, with the region expected to generate $320 billion in value by 2030, according to Arabian Business. ³


Notably, many nations in the larger MENA and MEA region, including the wealthy GCC nations, are implementing extensive national economic development and diversification strategies (such as Saudi Arabia's Vision 2030), with the goal of making their economies less dependent on oil while also promoting innovation, talent, and diversity.


Additionally, growing digitization can greatly improve youth’s economic chances. Highly qualified youth can access gig jobs worldwide with the aid of digital platforms like “Upwork”. It is a global marketplace for freelancers, employees, and employers designed to connect people with work opportunities and build their portfolios.


Key Barriers & Challenges


As per Gabbani and Nader, breakout successes are scarce in the area, though. Most youth who want to participate in and gain from the digital economy find it difficult to compete with their highly skilled, financially supported peers in other areas of the world.


Digital technology opens up new possibilities, but it also makes things more competitive. Furthermore, because they have access to broadband networks, have developed their talents, and have the guidance and support they require to succeed, some youth are significantly better prepared than their elders to take advantage of these opportunities. Digital technology can thereby worsen existing disparities by favoring connected urban centers, and educated youngsters who can successfully navigate the digital landscape, and a privileged few with access to networks of affluent, connected, and educated friends and family.


Significantly, youth in the MENA region are unable to fully take advantage of the advantages and opportunities brought on by digital technologies due to three key barriers.


Firstly, entrepreneurs in the MENA area are discouraged from pursuing truly disruptive ideas that might unleash economic growth and provide meaningful work for others because existing rules, regulations, and bureaucratic controls are burdensome and serve to protect vested interests. Daza Jaller and Molinuevo also discovered that the MENA area "is falling behind in developing a contemporary governance framework for the digital economy" due to its reliance on regulations that were not created for the digital era. These contemporary governance frameworks cover electronic signatures and paperwork, online consumer protection, data governance, cybersecurity, and rules governing intermediary liability.


Secondly, the area is now less accessible to digital technology than it once was. According to the International Telecommunication Union, active mobile-broadband subscriptions were only at 60%, far behind the rest of the world, save for Africa, and are on a downward trajectory in the Arab region, where mobile-cellular telephone subscriptions are expected to fall below 100% in 2020. The delay in implementing technology to provide access to other services is also concerning. For instance, only 34% of youth in MENA had an account at a financial institution or with a mobile-money service provider in 2017, scoring even lower than in sub-Saharan Africa. This statistic comes from the Global Financial Inclusion Database.


Thirdly, using technology effectively demands technical, fundamental, and digital abilities in order to benefit from the potential it presents fully. Offering service on Fiverr or Upwork demands significant technical proficiency, the ability to engage with clients, and the capacity to fulfill deadlines. For instance, providing rides via Uber requires maintaining vehicles in good condition and interacting with consumers to achieve high ratings. Sadly, the majority of youth in MENA do not possess the necessary skills to properly benefit from the opportunities provided by digital technology. The region's educational systems are still mired in the past and prioritize rote memorization over critical thinking, collaboration, communication, and, of course, digital skills.


Concluding Thoughts


This article has outlined the economic potential and innovation opportunities in the MENA region afforded by AI to youth, the Generation Z demographic, who were born between 1997-2012.


Given their large youth populations, many MENA nations are making significant investments in AI education, training and research to ensure that such technologies play a key role in the future economy and workforce. The benefits of AI are multi ‒ and intersectoral. Hence, MENA countries have an opportunity to craft strategies and build AI tailored ecosystems to suit their respective economic and social structures.


While still in the early stages, MENA nations are crafting AI strategies to fit their specific needs. When compared to developed nations (such as the US and Europe), these nations may have a distinct advantage by leveraging local talent to realize innovations underpinned by AI.


With the drive towards affordability, developing markets are gaining a competitive advantage based on their inherent affinity for cost-effective solutions and the possibilities opened up by AI. To realize this competitive advantage and achieve significant improvements in domestic AI capacity, countries in the region will also need to incentivise investment.


This investment must include a robust and scalable digital infrastructure that helps forge a blend of physical human and social experiences with immersive and future-ready digital experiences.


Fatima Al Husseiny, Editor, Copywriter and Tech for Social Good Advocate


Fatima Al Husseiny holds a Master’s degree in Educational Management from the Lebanese

International University and BA in English Language and Literature from the Lebanese University. Her 6 years of teaching experience led her to expand her knowledge on education and enrich her research passion. Her research interests are related to Education, Educational Technology, AI, and Social Media. Fatima’s professional goals are related to developing academic research in her fields of interest. She has been awarded two achievement awards for her contributions to Wikipedia, and various certifications from Google, Coursera, and Udemy.


Fatima enriches her social responsibility through contributing to educational blogs in reputable media outlets (e.g. Annahar Media Group Website) and to content editing in international context such as The International Girls Academy, NJ, USA.


Follow me on LinkedIn, Twitter and visit my website for more info!


 

Salim Sheikh, Executive Contributor Brainz Magazine

Over the past 25 years, Salim has built a career in consulting, working both client ‒ and supplier-side as an interim CIO/CTO and a Business Change / Transformation Consultant. facilitating digital and technology transformations programmes that have included rescue & recovery ("turnaround"), process optimisation & improvement and organisational change – across diverse industries in the UK, Europe, Nordics, Turkey, UAE, US, and Australia.


Salim is an Oxford University alumni who also has strong academic roots in Artificial Intelligence (AI). He is a mentor in the “Responsible Tech Program” managed by “All Tech Is Human” where he advocates “AI for Social Good” and “AI for All”.


He authored "Understanding the Role of Artificial Intelligence and Its Future Social Impact" which is available via IGI Global (https://bit.ly/34cfJVf) and Amazon (https://lnkd.in/gbk-zba).

 

References:

  1. The World Bank, Oct 2022, “MENA Economic Update”, https://www.worldbank.org/en/region/mena/publication/mena-economic-monitor

  2. Dimock, Michael, Jan 2019, Pew Research Center, “Where Millenials End and Generation-Z Begins”, https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/

  3. Arabian Business, Jan 2022, “Gulf to drive AI innovation post-pandemic, survey shows”, https://www.arabianbusiness.com/industries/technology/gulf-to-drive-ai-innovation-post-pandemic-survey-shows

  4. Gabbani, Nader, May 2021, “How will digitalization affect youth employment in MENA?” Brookings Doha Center, Ref: https://www.brookings.edu/opinions/how-will-digitalization-affect-youth-employment-in-mena/

  5. Daza Jaller, Lillyana; Molinuevo, Martin. 2020. “Digital Trade in MENA : Regulatory Readiness Assessment. Policy Research Working Paper; No. 9199. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/33521 License: CC BY 3.0 IGO.

  6. The World Bank, Data Catalog, 2022. https://datacatalog.worldbank.org/dataset/global-financial-inclusion-global-findex-database

  7. Blom, Andreas, Goldin, Nicole, Nusrat, Mariam, July 2020. “Starting line — Where does MENA stand with digital skills?”, Arab Voices. https://blogs.worldbank.org/arabvoices/starting-line-where-does-mena-stand-digital-skills

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