- 26 November 2023
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GCC Saga of Eight Digital Trends from AI to Metaverse
While the journey of progress in GCC nations might have kicked off a bit late, now it’s picking up speed. The Arab world is in the midst of a significant digital transformation, and the global market is expected to reach a staggering $3,145 billion by 2030 and $695.5 billion by 2023.
GCC nations are investing heavily in resources to establish their presence in the digital arena. They’re setting the stage for a strong economy for the next generation, not just to keep up with the rest of the world but to lead the way.
In the past year, the GCC countries have witnessed a surge in internet and mobile users, online shopping, and e-government services, as well as a host of innovative and ambitious digital initiatives and projects.
The GCC governments and businesses are making these changes with a clear vision and strong commitment. They aim to broaden their economies, improve public services, and tackle the challenges posed by the pandemic and beyond.
In this article, I will explore the eight digital trends that are shaping the future of the GCC and how they are impacting various sectors and industries. These trends are based on a new report by global management consulting firm Oliver Wyman, as well as the insights and experiences of key regional events and stakeholders, such as the LEAP22 conference in Riyadh and the Smart City Expo in Doha.
As a seasoned chartered accountant and entrepreneur with 17 years of diversified experience, I will also share my own perspective and analysis on these trends and how they can create new opportunities and challenges for GCC businesses and consumers.
01 GCC Digital Progress: An Evolution
Future-Ready Strategies in Action
Digital transformation means using smart technology to make things better. And GCC countries are on it, weaving digital advancements into their Vision 2030 plans for a brighter future. The global digital transformation market is booming, with a projected compound annual growth rate (CAGR) of 24%, from $695.5 billion in 2023 to $3,145 billion in 2030 (MarketsAndMarkets). The world is spending big on digital transformation, with an expected amount of 3.4 trillion U.S. dollars by 2026 (Statista). And the payoff is huge, with $100 trillion added to the global economy through digital transformation by 2025 (World Economic Forum).
Investing in Tomorrow’s Tech
Think of GCC countries as big players investing in cool tech like e-government, smart cities, and cutting-edge stuff like cloud computing and artificial intelligence. It’s about turning their countries into tech-savvy hubs!
Dollars in Digital Dreams
By 2025, almost half of all the money the GCC countries spend on tech will go into turning these cool ideas into reality. It’s not just talk; it’s a serious commitment to making digital dreams come true.
Tech Benefits for Everyone
Why all the excitement? Because this tech shift brings real perks—getting things done faster, making people happier, and staying ahead in the game. It’s not just about gadgets; it’s about making life better with smart tech moves.
02 Elevating Lives: GCC Nations Focus on Citizen-Centric Digital Services
Redefining Public Services for Everyone
Online platforms that offer easy, accessible, and personalized services to the public are called citizen-centric digital services. They include services like health, education, transport, and social security.
These services are becoming more popular and important, as the statistics show:
- More consumers prefer self-service over in-person services. 40% of them chose this option. (SuperOffice)
- Most customers prefer to use a company’s website instead of using social media, SMS, and live chat for support. 73% of them do this.
- Most government agencies want to become digital organizations. 81% of them have this goal. (CGI)
- In the next five years, most cities globally will use a digital platform to address multiple citizen needs through one personalized interface. 70% of them plan to do this. (Deloitte)
GCC’s Mission for Better Living
In the GCC, the spotlight is on bringing you digital services that make life smoother. The goal? To boost your quality of life, build trust, get you involved, and trim down on hassles and bureaucracy.
Digital Services in Action
Ever heard of UAE’s SmartPass? It’s like a magic key for accessing over 5,000 government services with just one login. Then there’s Saudi Arabia’s Absher, your go-to for tasks like renewing passports or booking appointments. Bahrain’s BeAware steps up in the health game, helping out with COVID-19 tracking and health alerts.
And Qatar’s TASMU? It’s a smart city program that makes key sectors like health, transportation, environment, and logistics work better for you
Tech that Speaks Your Language
These digital services aren’t just tech jargon—they’re tools crafted to make your life simpler and better. Whether it’s renewing documents, staying healthy, or improving city life, the GCC is using tech to speak your language.
03 Unlocking Potential: The ‘Cloud-First’ Revolution in GCC Nations
Computing Beyond Boundaries
Cloud computing is like having all your tech needs—servers, storage, software, you name it—delivered over the internet rather than being stored on your own devices.
GCC’s Smart Move – Embracing ‘Cloud-First’
The GCC is adopting a ‘cloud-first’ mentality, which means preferring cloud services over other alternatives, whenever possible. This is not just a trend; it’s a smart decision. The cloud applications market is valued at more than $150 billion. By 2025, 200 ZB of data will be stored in the cloud. The cloud holds 60% of the world’s corporate data. Cloud infrastructure services generate $178 billion per year in revenue.
The Perks of Cloud Power
Why the shift? Because cloud computing brings some serious perks—think scalability, flexibility, cost savings, top-notch security, and a playground for innovation—
Mastering the Art of Multi-Cloud
But the GCC countries aren’t stopping there. They’re into multi-cloud strategies, using different cloud providers to meet various needs and
goals. It’s like having options to tailor-make their tech solutions.
Cloud Initiatives in Action
UAE’s Cloud First Policy is pushing federal entities to migrate a chunk of their IT systems to the cloud by 2022. Saudi Arabia’s got its Cloud Computing Regulatory Framework, setting the rules for cloud service providers and users. Oman’s rocking the Oman Government Cloud, a national platform hosting government applications and data.
Kuwait is doing a similar dance with its Kuwait Government Cloud, aiming to offer secure and reliable cloud services to the public sector. It’s not just tech jargon; it’s a cloud revolution in action.
04 Fortifying Defenses: Pursuit of Cyber Resilience by GCC Nations
Battling the Cyber Storm
Cyber resilience is like having a superhero shield against cyberattacks. It’s not just about preventing attacks but also being ready to bounce back if the bad guys strike.
GCC’s Digital Dilemma – Rising Cyber Threats
Since facing cyberattacks in the early 2010s, GCC countries are working to boost their cybersecurity. According to the Portulans Institute’s 2022 Index, Saudi Arabia is second globally, and the UAE is eighth in cybersecurity. Despite these rankings, the region’s average cost per cyberattack is $6.93 million, higher than the global average of $4.24m, as stated by Mohamed Al Kuwaiti, MD of the National Data Centre under the UAE’s Supreme Council for National Security. It’s the flip side of being more connected and dependent on digital tech.
Armor Up – Investing in Cyber Resilience
GCC countries are putting their money where it matters—into beefing up their cyber resilience. They’re crafting solid cybersecurity policies, frameworks, and standards. Plus, they’re building up their cyber skills and capabilities. It’s like giving their digital defenses a serious upgrade.
GCC Cyber Resilience Champions
Look at the UAE with its National Cybersecurity Strategy, which lays out the game plan to shield the country’s digital assets. Saudi Arabia’s got its National Cybersecurity Authority, the top dog overseeing cybersecurity. Bahrain’s rocking the National Cybersecurity Centre, a special unit dishing out cybersecurity advice to the government and critical infrastructure.
And Qatar’s got its National Cybersecurity Strategy, making sure everyone knows their role in keeping the country’s digital front strong and ready. It’s not just a plan; it’s the GCC gearing up for the cyber battle.
05 Safeguarding Tomorrow: GCC’s Vision for Data Governance
Navigating the Data Landscape
Data governance is like the captain steering the ship of data—ensuring it’s available, usable, top-notch in quality, and super secure. All of this, of course, is in line with the rules and regs of the organization.
GCC’s Data Awakening
GCC nations have strengthened their data security. Spending on data security in the MENA region is projected to rise by 22.6% annually, going from $70 million in 2020 to $129 million in 2023.
In the GCC, data isn’t just numbers and codes; it’s seen as a game-changer, a key player in driving innovation and growth. And to make sure they’re playing the data game right, GCC countries are crafting and putting into action data governance strategies.
Smart Data Moves – Governance in Action
This isn’t just about having data; it’s about using it wisely. The GCC nations are on a mission to ensure data is used effectively and responsibly. That means respecting privacy, ensuring protection, and staying on the right side of the law.
GCC’s Data Guardians in Action
Look at the UAE with its Data Protection Law, keeping tabs on personal data and laying out rules with penalties for those who don’t play by them. Saudi Arabia’s Data Localization Regulation makes sure certain data stays within the kingdom. Bahrain’s Personal Data Protection Law is not just about rules but also involves an independent authority to enforce them.
And Qatar’s Data Privacy Law isn’t just talk—it requires data big shots to register with the Ministry of Transport and Communications. It’s not just governance; it’s the GCC securing its digital future.
06 The AI Frontier: Drive for Innovation in GCC Nations
Decoding Artificial Intelligence
Artificial intelligence (AI) is like giving machines a slice of human smarts—teaching them to learn, reason, and make decisions. It’s not just tech magic; it’s a game-changer.
GCC’s AI Affair – Transforming Futures
Across the GCC, AI isn’t just a buzzword; it’s a key player in the region’s transformation. According to McKinsey, AI is anticipated to contribute about $150 billion, making up 9% or more of the combined GDP of GCC countries. Despite some successful AI implementations, the overall adoption in the region is moving at a slower pace than anticipated.
Smart Investments – Fueling the AI Wave
To make this happen, GCC countries are putting their money into AI research, development, and innovation. But it’s not just about funds; it’s about nurturing talent, creating AI ecosystems, and forming partnerships.
GCC nations are projected to gain approximately $23.5 billion in economic benefits by 2030, driven by the increasing investments in generative artificial intelligence, as per a recent report.
AI Stars in Action
Look at the UAE, rocking the National AI Strategy 2031. It’s not just about being a global leader; it’s about embedding AI in sectors like health, education, energy, and transport. Saudi Arabia’s got its game plan too—the National Strategy for Data and AI, aiming to be a hub for global data and AI action.
Bahrain’s AI Academy is the real deal, offering training and certification to shape AI experts. And Qatar? It’s diving into the AI game with the National AI Strategy, focusing on sectors like health, education, the environment, and sports. It’s not just innovation; it’s the GCC paving the way for an AI-powered future.
07 Transforming Transactions: GCC’s Dive into Digital Government Currencies
The Digital Currency Game Plan
Digital government currencies are like the online version of the money you use every day. But here’s the twist—they’re not just random digital coins; they’re issued and watched over by the central bank, with the same value and legal status as the cash you can touch.
Currency Evolution in GCC Nations
In the GCC, there’s a shift happening. They’re not just thinking about coins and bills; they’re exploring the idea of digital government currencies. Why? To amp up their money and financial systems and make cross-border payments and remittances a breeze.
United Pursuits – Digital Currency Experiments in GCC Nations
But they’re not going at it alone. The GCC countries are teaming up, not just with each other but also with other nations, to experiment with digital currencies. It’s not just about the tech side; they’re testing the waters on the legal and regulatory fronts too.
Digital Currency Showcases in the GCC
Look at the UAE and Saudi Arabia, teaming up for the Aber project. It’s not just a pilot; it’s a joint effort to create a digital currency for smooth cross-border settlements. Bahrain’s in the game too, joining the m-CBDC Bridge project for prototype cross-border payments with digital currencies.
Oman is getting insights from the Bank for International Settlements on the pros and cons of digital currencies. And Kuwait? They’re doing their homework, studying how digital currencies might shake up their financial world. It’s not just about money; it’s the GCC stepping into the digital currency era.
08 Beyond Reality: GCC’s Exploration of the Metaverse
Unveiling the Virtual Playground
The metaverse is like a digital wonderland where you don’t just watch, but you actually dive in and interact. It’s not just tech jargon; it’s a new space for people to connect and play using cool tech like virtual reality and augmented reality.
GCC’s Curiosity in the Metaverse
The metaverse is anticipated to make significant economic contributions in various global markets. Projections include a range of $402 billion to $760 billion in the US, $284 billion to $536 billion in the EU, and $50.5 billion to $95 billion in the UK.
Across the GCC, there’s a buzz around the metaverse. It’s not just a tech trend; it’s seen as the next big thing in digital innovation and entertainment.
Metaverse technologies hold the promise of injecting a total of $55 billion into the economies of Saudi Arabia and the UAE by 2035, as per a recent study from Meta Platforms, the parent company of Facebook. The report by Deloitte suggests that this innovation could contribute up to $38.1 billion to Saudi Arabia and $16.7 billion to the UAE by the mid-2030s as both nations embrace the metaverse. Even at a minimum, the impact is projected to be $20.2 billion for Saudi Arabia and $8.8 billion for the UAE.
GCC’s Dive into Metaverse Experiments
But they’re not just watching from the sidelines. GCC countries are rolling up their sleeves, creating virtual worlds, hosting events, and trying out metaverse experiences. It’s not just talk; it’s hands-on experimentation with metaverse-related tech and assets.
Metaverse Marvels in the GCC
Saudi Arabia’s NEOM isn’t just a city project; it’s a vision to blend physical and digital realities seamlessly. Bahrain’s rocking a virtual pavilion at Expo 2020 Dubai, showcasing its culture and history.
Oman’s teaming up with Facebook for a metaverse hub, providing training and support for local developers. And Kuwait is making moves, acquiring Sandbox, a platform for creating, playing, and selling virtual worlds. It’s not just a trend; it’s the GCC stepping into the metaverse era.
Nabeel Shaikh’s Insights
Here are my perspectives and analysis on these trends and how they can create new opportunities and challenges for GCC businesses and consumers.
Investment-powered digital transformation
Investment-powered digital transformation can enable GCC businesses to improve their efficiency, productivity, customer satisfaction, innovation, and competitiveness, as well as access new markets and customers.
However, it can also pose challenges such as the need to invest in digital infrastructure, skills, and culture, as well as to cope with the changing customer expectations and preferences, and the increased competition and disruption.
Citizen-centric digital services
Citizen-centric digital services can benefit GCC consumers by providing them with convenient, accessible, and personalized services, such as health, education, transportation, and social security.
However, they can also raise concerns such as the privacy, security, and quality of their personal data, as well as the digital divide and inclusion, and the trust and engagement with the government and the service providers.
The power of ‘cloud-first’
The power of ‘cloud-first’ can offer GCC businesses and consumers the advantages of scalability, flexibility, cost-effectiveness, security, and innovation, as well as the ability to access and use various cloud services and platforms.
However, it can also entail challenges such as compliance with the cloud regulations and standards, the integration and interoperability of the cloud systems and applications, and the reliability and availability of the cloud services and providers.
Cyber resilience
Achieving cyber resilience can help GCC businesses and consumers to protect their digital assets and operations from cyberattacks, as well as to recover and resume their activities in case of a cyber incident.
However, it can also require them to invest in cybersecurity policies, frameworks, and capabilities, as well as to adopt cybersecurity best practices and behaviors, and to collaborate and coordinate with the relevant stakeholders and authorities.
Data governance
Future-proof data governance strategies can enable GCC businesses and consumers to leverage the value and potential of data as a strategic asset and a driver of innovation and growth, as well as to ensure the privacy, protection, and compliance of their data.
However, it can also demand them to implement and follow data governance policies, standards, and regulations, as well as to develop and acquire data skills and literacy, and to create and participate in data ecosystems and partnerships.
AI adoption
Expanded AI adoption and innovation can empower GCC businesses and consumers to enhance their performance and efficiency, as well as to create and apply AI solutions for various sectors and domains, such as health, education, energy, and transport.
However, it can also present challenges such as the ethical, social, and legal implications of AI, as well as the AI skills and talent gap, and the AI trust and transparency issues.
Digital government currencies
A new dawn for digital government currencies can provide GCC businesses and consumers with a new and convenient way to conduct monetary and financial transactions, as well as facilitate cross-border payments and remittances.
However, it can also pose challenges such as the technical and operational aspects, as well as the legal and regulatory implications, of issuing and using digital currencies, as well as the impact and compatibility of digital currencies with the existing financial systems and instruments.
Metaverse
According to recent reports from Meta, the metaverse is anticipated to make significant economic contributions in various global markets. Projections include a range of $402 billion to $760 billion in the US, $284 billion to $536 billion in the EU, and $50.5 billion to $95 billion in the UK.
Entering the metaverse can offer GCC businesses and consumers a new frontier of digital innovation and entertainment, as well as a potential platform for social and economic activities.
