June 24, 2024

Why do tech companies in the GCC need to maximize global efforts to access the digital economy?

digital economy

digital economy

Last Updated on June 2, 2024 by newseditor

Over the past ten years, the digital sector has grown significantly in GCC countries. They now have the chance to transform from being primarily digital technology users to disruptors, attracting potent local businesses, institutions, and talent. GCC nations might boost the regional GDP by $138 billion if they switch from being early adopters of digital technology to disruptive innovators.

According to a 2022 Coursera global skills report, the GCC countries do worse than comparable nations regarding technology and data science abilities. Germany is ranked 88%, Japan is 91%, and Singapore is ranked 82% in terms of data science skill percentile rankings. On the other hand, GCC nations, including the UAE, Kuwait, Qatar, and Saudi Arabia, place at 35%, 25%, 16%, and 15%, respectively.

The report recommends that tech companies in the region embrace certain global best practices. This includes equity-based and long-lasting incentives and remote or hybrid ways of working. This can help retain staff, provide opportunities for career progression and develop fitting talent models to address the obstacles.

Currently, 90% of the market capitalization of the top 70 digital enterprises worldwide is held by corporations from China and the U.S., giving them a dominating lead. By 2025, the digital economy, expanding six times as quickly as the traditional economy, is projected to contribute up to 25% of the world’s economy.

How Tech Companies Can Help To Grow GCC Digital Economy

The digital economy in the GCC is growing quickly, although it is still mainly focused on conventional IT. A recent research from Strategy& Middle East, a member of the PwC network, titled ‘Think Globally to Succeed Locally’, claims that IT organizations must change their ways of thinking, move away from localized standards, and take a global perspective to overcome these primary growth barriers.

Many digital businesses need to find unique intellectual property ideas. This can be accomplished by leveraging innovation centres and employing a suitable mixture of strategic investments, IP licensing, mergers, acquisitions and monetization agreements. In addition, the region can boost tech and digital talent, expand R&D and startup investments, and enhance national innovation, product creation, and service delivery.

Furthermore, GCC nations can create “tech champions” to expand their digital economies. These businesses offer the economies of scale and breadth essential for innovation, attracting top people, creating jobs, attracting large-scale investment, and exporting. Hence, a strong digital economy results from a thriving technology ecosystem.

Additionally, GCC IT companies can develop corporate investment ventures or funds to protect intellectual property, draw manpower, and attain exposure to contemporary industries. The three main stages of the development of a tech champion are:

  • Building an anchor portfolio and value propositions
  • Scaling up and growing regionally
  •  Diversifying and monetizing at scale.

Ultimately, desiring GCC tech enterprises can reinvent their business models through unique approaches to addressing talent on a global scale. These businesses can potentially develop into tech leaders if they are successful in such areas and have a strong corporate design and strategy.

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