Dubai: The five key industry sectors to watch out are the internet economy, e-commerce more specifically, cloud computing, the sharing economy, and Middle Eastern telecom companies lowering the speed of consumers’ online video, said an industry expert.
Sam Blatteis, CEO of regional public policy advisory and research firm The Mena Catalysts, who is also the former head of government affairs and public policy for Gulf Countries at Google, told Gulf News that the internet economy will form one of the few booming, non-oil industries in 2018. The prize is significant.
The Middle East already has over 170 million internet users, larger than the population of Russia.
I found maid buses, delivery trucks ... These are all slated to be replaced by e-commerce delivery trucks, fork-lifters and Amazon-style warehouses.”
- Sam Blatteis | CEO of The Mena Catalysts
“The future of tech companies’ growth rests in emerging markets like the Middle East,” Blatteis said.
Over 86 million smartphones were expected to be shipped into the Middle East in 2017, that’s more than shipped to the UK and France combined. Middle East and North Africa’s internet usage is already up 2,639 per cent, over the past decade compared with 393 per cent in Europe, the Nielsen’s latest Internet Usage reported.
Currently, Mena internet usage is expanding at 15 per cent growth per year, among the world’s highest annual growth rates. He said that about 70 to 80 per cent of the UAE public is carrying around a supercomputer [smartphone] in their pocket.
Blatteis said that skyrocketing Mena e-commerce is translating into specific investment, jobs and tangible economic development such as the region’s first e-commerce city in Dubai - CommerCity - a $735 million project strategically placed near Dubai airport.
“I found maid busses, delivery trucks, and u-hauls, essentially parking lots for delivering the offline economy of Dubai. These are all slated to be replaced by e-commerce delivery trucks, fork-lifters and Amazon-style warehouses,” he said.
He said that Dubai has a strategy to go with it too, placing art galleries, luxury restaurants, and cafés at the heart of CommerCity to attract and retain techies and other knowledge workers, while strategically positioning the new ‘flagship project’ right by the airport, providing companies there with quick access to logistics of one of the world’s most connected airports.
When it comes to cities, he said that he wouldn’t bet against Dubai as they deliver.
Dubai Internet City is already fully leased up, there’s no space. It houses 25,000 employees. That’s why Dubai Internet City is expanding too, developing 1.8 million square feet of office space, ie 10 times larger than the Kennedy Centre, Blatteis said.
One of China’s tech titans shares this ambition and is voting with its wallet: China’s Amazon - Alibaba - recently announced plans to build a two million square metre $600 million “Tech Town” in Dubai - over five times larger than the Pentagon’s office space for 3,000 businesses focused on robotics, mobile apps, and machine learning, he said.
For context, he said that Dubai’s e-commerce sector is on pace to account for 10 per cent of the city’s $54 billion in retail sales in less than three years, and they’re just getting started.
Meanwhile, he said that the sharing economy is part of the next wave of upcoming digital investments.
“It’s lucrative. Airbnb is growing so fast that it’s adding the equivalent of one entire Hilton hotel chain’s worth of rooms for rent each year. The Middle East has a comparative advantage in home-sharing for instance, because they are world-renowned for their hospitality and hosting of guests: and Book Halal Homes and Muzbnb (Muslim Airbnb equivalent) prove there’s a sharing economy market,” he said.
As the Gulf states look to transform their economies for the future, he said that technology will play a major role and the cloud sits at the core of that transformation.
“Simply put, we assess that leveraging the cloud is fundamental to provide higher quality public services at lower costs to ultimately achieve their economic plans. The latest breakthroughs in mobile computing, social media and artificial intelligence either fundamentally depend on or are greatly enhanced by, cloud computing,” he said.
Industry analysts estimate that the Middle East cloud services market growth alone grew 22 per cent in 2017.