The Middle East has certainly taken centre stage over the past year. Not only did we see the World Cup being hosted in Qatar which drove tourism from across the globe, but there have been notable visits by Western leaders Rishi Sunak and Joe Biden who visited the Kingdom of Saudi Arabia to discuss opportunities to collaborate with His Highness Sheikh Mohammed bin Salman, the Kingdom’s Crown Prince and Prime Minister.
Coupled with traditional growth markets becoming more challenging with talent shortages, financial uncertainty and a war happening, the Western part of the world is increasingly seeing the Middle East region as one that is full of opportunity.
Saudi Arabia continues to actively pursue various initiatives to establish itself as the leading hub of technology in the Middle East. By investing in digital infrastructure, such as data centres, metaverses and fibre optic cables, countries like Saudi Arabia are creating exciting opportunities for tech businesses.
The trends driving growth in the Middle East
Driven by Vision 2030, a unique transformative economic and social reform blueprint, which hopes to open Saudi Arabia up to the world, commitments are being made by several countries in the region to diversify and invest in new sectors, outside of oil.
The region is proactively exploring different avenues to ensure they lead in innovative creations and long-term growth and sustainability by diversifying their economy.
This presents opportunities for a variety of sectors. The six countries in the Gulf Cooperation Council (GCC) – the United Arab Emirates (UAE), Saudi Arabia, Oman, Kuwait, Qatar, and Bahrain – are very quick to adapt to changes and introduce new legal frameworks and authorities to help expedite areas of growth.
The Middle East is also very quick to invest in and adopt new trends. Look at the metaverse for example. Saudi Arabia developed a huge entertainment city, ‘Qiddaya’ – a disruptive destination that offers innovative and immersive experiences – virtual reality (VR) and augmented reality (AR) – integrated on a scale never seen before.
What are the opportunities?
The Middle East has a thriving, young, educated and technologically minded population that wants to spend. Tech is sought after and businesses with digital solutions will be the fastest-growing segment in the region.
There are more than 108m people aged between 15 and 29 in the Middle East – this age group makes up almost a third of the population. With this growing young and tech-savvy population comes an increasing demand for digital products and services which is evident when you look at mobile internet usage. The number of mobile internet users reached over 300 million in 2021, with predictions of it reaching 50% of the population by the end of last year.
Digital channels have been embraced and people in this region have high disposable income, meaning spending is set to grow.
Digital adoption is also high. The UAE, Saudi Arabia, and Qatar are expected to be among the first to adopt 5G in the Middle East having already invested heavily in 5G infrastructure – the UAE has already announced plans to have 5G coverage in 90% of the country by 2023.
This landscape lends itself to digital entertainment, eCommerce, FinTech and telecommunication services. Take gaming as an example: this market is expected to register a growth rate of almost 14% during the forecast period of 2022-2027, fuelled by technological advancements and investment into digital infrastructure.
The Middle Eastern political landscape and what that means for business
The positive developments in the political landscape of the GCC region have had a significant impact on businesses, particularly foreign businesses. Prominent leaders have created a business-friendly environment that promotes growth and development.
Foreign businesses are attracted to economic diversification, investment in infrastructure, and the promotion of innovation and entrepreneurship. These efforts have helped forge an environment for businesses to thrive.
Moreover, there has been a shift of human resources which has played a significant role in foreign businesses deciding to have their operations based in the GCC region. The relaxation of regulatory policies in these countries to foster a more inclusive community, accommodating diverse religious beliefs, has been instrumental in attracting businesses to the region.
As a result, businesses are confident that relocating their operations and key personnel to the GCC region will result in a positive experience.