Since the term ‘Digital Economy’ was coined by Don Tapscott in his 1995 best-seller, a lot has changed for virtually every business and industry around the world.
The MENA region is no exception. According to a recent ArabNet report, over $750 million were invested in more than 450 tech startup deals between 2013-2015.
Other sources say that the new digital economy in the Middle East is set to exceed $30 billion by 2018. In such a scenario, the rise of the Internet of Things plays an increasingly central role, with connected devices growing from 9 billion now to at least 50 billion in 2020, as a recent report by SAP and Stephenson Strategies affirms.
Further, Boston Consulting Group (BCG) stresses that the digital economy is growing at 10% a year—much quicker than the global economy as a whole. This growth rate proves even higher in some developing markets: 15% to 25% per year.
By and large, the MENA’s young population is a great asset for the region. Arab youth are increasingly embedding everything digital into their daily lives, using social media and buying online with genuine enthusiasm.
In doing so, they also stimulate businesses to converge in the Internet, in some sort of cycle where new digital possibilities spur new business opportunities, and vice versa.
Although certainly behind benchmark countries like Sweden, Denmark or Singapore, the Hashemite Kingdom of Jordan is seizing the chance to transform itself into a leading digital economy.
Reach 2025, a new initiative seeking to unlock the potential of digital economy and create some 150,000 new digital jobs in ten years’ time, was launched this month at the opening of the MENA ICT Forum 2016, which took place at King Hussein Business Park in Amman.
Implemented in collaboration between public and private stakeholders, the plan was introduced in the presence of His Majesty King Abdullah. A host of speakers, experts, and officials from the sector also attended the event, which has been holding biennially since 2002.
During the forum, Minister of ICT Majd Shweikeh said that the move aims to accelerate growth, create new jobs and tap into its highly skilled human resources.
She also announced a five-year plan to digitize all government services to streamline measure at the public sector.
As stated by Jordan Times, the plan aims to create 5,000 to 7,000 businesses in the digital economy by 2025, generate 130,000 to 150,000 new jobs and boost the ICT sector’s revenues, thus increasing the overall gross domestic product growth between 6% to 8%.
Bashar Hawamdeh, chairman of nonprofit int@j, joined the discussion.
Hawamdeh argued that the digitization of the economy is not an option, but rather a necessary step to be taken to feed the existing culture of entrepreneurship in Jordan and keep the pace with the fast-changing world. Even more so if one considers the prospects for progress that a digitally-enabled economy offers.
There is much at stake. An analysis conducted by McKinsey puts great emphasis on the correlation between high level of digitization and higher GDP. In addition, the digitization can have a positive impact on inclusion, poverty reduction, human productivity and also, the report says, on the quality of life following a substantial reduction of CO2 emissions.
As stated in an executive summary released by the Ministry of Information and Communication Technology in cooperation with int@j, the digital economy can be accelerated by focusing on three core areas: the six leading sectors (health, education, cleanTech, transport & logistics, financial sector, and communications & security), the key enablers (content & gaming, e-commerce & professional services) and the vertical tech areas (IOT, cloud computing, hardware and artificial intelligence).
Whether a little less than a decade will be enough to take to the next level the economy of this MENA tech-loving country remains to be seen. In any case, the move proves a much-needed push in the right direction, at the right time.