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The Digital Economy: Accelerating the UAE’s digital transformation
Whether it is e-commerce, banking, or government services, the digital economy is set to grow at a scorching pace
Tuesday 24 September 2019
As Dubai strides ahead towards becoming the world’s smartest city, with the government already providing 1,000 e-services, digital transformation is on its way to power the UAE’s digital economy. Whether it is e-commerce, banking, or government services, the digital economy is set to grow at a scorching pace due to high demand in a country that boasts an extremely high penetration of smart devices.
The UAE recognizes the importance of smart governance and is implementing digital initiatives across sectors. One Million Arab Coders, which aims to train one million people in computer programming to empower and equip them with the technological tools and expertise, is one such step.
Globally, growth in the online economy is set to outpace growth in the offline economy. The UAE has been one of the early adopters of electronic transformation, with the transition from traditional government to electronic government beginning in 2000. In 2013, the shift from e-government to smart government was announced to establish the foundations of a smart city.
Defined as an economy that functions primarily by means of digital technology, especially electronic transactions made using the internet, the digital economy “enables and executes the trade of goods and services through electronic commerce on the internet”, according to an OECD working paper. It is described by a World Bank discussion document as “the single most important driver of innovation, competitiveness and growth in the world.” Adoption of open data and initiatives promoting the robotics and artificial intelligence (AI) sectors will feed the digital revolution.
In the Middle East and North Africa (MENA) region, the number of technology investors is growing steadily, with a compound annual growth rate of 31 percent between 2012 and 2017, according to data collated by the ArabNet State of Digital Investments Report released in May 2018.
Annually, 40 new funds have been added in 2015 and 2016. In 2017-2018 (until May 2018), 30 more funds have been added, of which 10 are based in the UAE, the report says.
Dubai’s free zones remain integral to its digital geography, even as rules related to establishing foreign businesses at onshore locations are relaxed. The UAE Cabinet’s approval for 10-year visas for international investors and talented professionals will strengthen Dubai’s position in the global battle for the talent required for digital growth.
According to the 2018 report ‘Exploring Digital Clusters, The Dubai Experience’ by property consultancy JLL, “On several measures of the digital economy, Dubai sits within reach of global tech-rich ‘Innovator’ cities such as Berlin, Austin, and Denver. The city ranks 9th globally in terms of tech start-ups per GDP and 23rd on the presence of large technology companies (unicorns) per head of population, thanks in part to its major regional role and ability to leverage funding and support.”
“Smart Dubai adopted an integrated strategy that is built on the three pillars of government efficiency, industry creation, and international leadership… Numerous implementations, ranging from massive internet of things (IoT) systems, data analytics, Blockchain, Hyperloop projects, innovative 3D printing, autonomous vehicles and drones, robotics and artificial intelligence applications, were all developed and trialed as part of our Smart Dubai initiative.”
-- H.E. Dr. Aisha bin Bishr, Director-General
“Today, more than 400 Oracle Cloud sales professionals are helping several SMBs in the UAE and the wider Middle East drive digital transformation.”
-- Abdul Rahman Al Thehaiban, Senior Vice President-Tech, Middle East and Africa
The UAE has invested in high quality ICT infrastructure in order to benefit
consumers, businesses, and governments, taking the digital economy beyond e-commerce and e-business to areas such as ease of doing business,
communications, and providing services across all sectors including transport, financial services, manufacturing, education, health care, retail, and business.
The UAE digital economy initiatives go beyond the ICT sector to focus on digitalization of processes and supply chains across all sectors of the economy, including procurement, production, coordination across networks of operating units, outbound logistics and customer relations.
The UAE government at both federal and emirate level has been proactive in the digital economy and digital media sectors, encouraging computer and internet use with structured programs. The UAE Vision 2021 aims to transition the country into a “knowledge based, highly productive and competitive economy”.
The 2017 Global Connectivity Index says: “Reduction or optimization of costs, agility, and decreased risks are fueling the adoption of cloud computing in the UAE. It has already moved from hype to the mainstream as businesses and governments are moving farther and faster.”
The country is taking firm strides with ICT infrastructure 2.0. In May 2018, for instance, telecom provider Etisalat announced the launch of the first commercial 5G wireless network in the UAE to provide gigabit internet services to its customers, to power digital transformation, IoT, smart cities, and the fourth industrial revolution.
Smart Dubai Global Network, launched in April 2018, connects smart cities over the world and shares Dubai’s knowledge and expertise in digital transformation.
Dubai Airport Free Zone Authority’s (DAFZA) Digital Intelligence Plan
2018-2020, developed and launched in December 2017, in line with digital
transformation initiatives such as the Dubai Internet of Things Strategy and
the UAE Strategy for Artificial Intelligence, is a major initiative within the UAE Centennial 2071 project.
-- Government services: The UAE occupies the first place in government procurement of advanced technology products in the Global Competitiveness Report 2017/18, under the Innovation pillar.
-- Mobile subscriptions: The UAE ranks second in mobile broadband subscriptions per 100 inhabitants.
-- Impact of ICT on service access: The UAE ranks high on the impact of Information and Communication Technology on access to basic services and in the use of ICT from business to commercial transactions.
-- Talent: The UAE attracts the best talent in the field, ranking number three in the availability of scientists and engineers in the Global Competitiveness Report 2017/18.
-- ICT laws: The UAE scores 7 out of 10 on the strength of its ICT laws in the Global Connectivity Index 2017.
-- E-commerce in the Middle East is set to double to more than USD 69 billion by 2020; the UAE’s share of the market in 2017 amounted to USD 27 billion, a report by Payfort said. In the UAE, e-commerce sales doubled between 2015 and 2017, with a projection of further growth at annual rates of above 20 percent through 2021, according Middle East B2C E-Commerce Market 2018 by Research and Markets.
-- Banking: Private sector initiatives in the financial services sector include Liv., Emirates NBD’s mobile-only bank to support the UAE Vision 2021’s strategic objectives of creating a smart innovation-driven economy. It has acquired 100,000 customers within a year of operations, in May 2018. Dubai banks have started their digital transformation journey. In 2016, Commercial Bank of Dubai launched CBD Now, a digital only bank. Emirates NBD has set apart USD 272 million for its digital transformation. Investment firm Dubai Holding has announced plans for a new USD 270 million digital bank to debut in 2019, which will also serve the SMEs and mid-size corporate segment, addressing issues such as transparent reporting, cash management platform linked to receivables, payroll, and payments.
-- Fintech is seeing increasing adoption. According to the State of Fintech report, the number of fintech start-ups is expected to reach 250 by 2020 in the region. In May 2018, in5, an enabling platform for students, start-ups, and entrepreneurs, has entered into an agreement with Oracle to help start-ups in Dubai explore new growth avenues, introduce innovative services, and deliver an exceptional customer experience through driving digital transformation, beginning with more than 120 active start-ups in Dubai.
-- Construction sector is seeing nascent advances. WakeCap Tech, which
makes a safety and tracking device for construction workers, giving firms realtime and cloud-based visibility, won Dubai Chamber’s third Dubai Smartpreneur competition in May 2018.
-- Customer Solutions Center launched by Dell in May 2018 is the first of
its kind in the region and designed to be a technology hub where experts can collaborate with customers to explore, test, and prove IT solutions and share best practices.
-- Trade finance will gain from technology to bridge the USD 1.5 trillion trade finance gap and accelerate SME growth over the next decade, according to a May 2018 report, The Future of Trade, from Dubai Multi Commodities Center.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, called on all Dubai Government entities to embrace disruptive innovation as a fundamental mantra of their operations and to seek ways to incorporate its methodologies in all aspects of their work.
Partnering with the right organizations is included in the mandate for each
X-Unit being set-up in various government entities, which are required to develop processes and methodologies that will allow them to work with disruptive companies and start-ups that radically offer better services or allow Dubai’s residents to lead a happier life.
In addition, the 10X announcement states that “regulatory obstacles facing
such disruptive companies should be removed to allow for their uninterrupted operations,” thus facilitating the entry of the key investors in these sectors.
Using disruptive innovation, as opposed to incremental innovation, all Dubai government entities will seek to deliver new or existing services in radically different ways using two specific foundations: customer centricity and design-led thinking. Each department has been asked to find ways to disrupt its own practices and develop moonshot solutions in partnership with the private sector using available and emerging technologies.
Some key initiatives include:
-- Dubai Health Authority’s Genome project envisions creating a genomic database of the entire population of citizens and residents to provide personalized medicine and enhance detection using AI and machine learning.
-- Dubai Police has proposed the ‘Police without Policemen’ project using technology to keep neighborhoods safe using Dubai Eyes, a Wi-Fi enabled, 360-degree CCTV camera that can transmit images directly to the house owner or to the police operations room. Added to this are an airborne surveillance blimp that oversees open spaces and projects under construction, along with a smart police station.
-- Dubai Water and Electricity Authority’s Digital DEWA project is the world’s first automated renewable energy digital utility powered by artificial intelligence. It hinges on four pillars – solar power, energy storage, autonomous services, and a data hub.
-- Dubai Vehicle Chain, to be launched in 2020 by the Roads and Transport Authority, is a vehicle lifecycle management system that will record the complete history of a vehicle from production to scrap.
-- Dubai Municipality’s Wastenizer is a decentralized waste treatment solution with communities and buildings using thermal methods to convert household waste into energy.
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