Investments in digital transformation across the Middle East, Turkey and Africa (Meta) region is projected to surpass $74 billion by 2026, helping organisations achieve long-term stability and growth, a new study from the International Data Corporation (IDC) has found.
Spending on such initiatives is expected to grow at a compound annual rate of about 16 per cent over a five-year period through 2026, and would account for more than 43 per cent of total information and communications technology investments, the US research firm said on Thursday.
That growth rate would be more than double over the 2021-2026 period. More notably, digital transformation investments by organisations would grow eight times more than the overall economy in 2023, the IDC said.
For many organisations, the spending they initiated at the onset of the Covid-19 pandemic has put them in a better position to respond and adapt to the rapidly-changing economic landscape, said Jyoti Lalchandani, group vice president and Meta regional managing director at IDC.
"The digital and tech investments they made during the pandemic to build resilience could be put to test in 2023 across key business dimensions such as customer experience, operations and financial management, among others," he said.
"The implementation of further digitalisation in critical areas and a more rapid shift to a 'digital business' approach will be key to separating the thrivers from the survivors."
Enterprises and governments have lauded the critical role digital transformation plays in the economy and society, as the world prepares for a future largely powered by technology.
The global digital transformation market is projected to hit about $3.95 trillion by 2030, from about $608 billion last year, growing at a compound annual rate of more than 23 per cent, according to data from Grand View Research.
The UAE and Saudi Arabia, the Arab world's two biggest economies, have rolled out several initiatives to promote the use of technology in daily activities and transactions, and are leaders in the region on this front.
At least 30 per cent of the focus of executive teams will be on growing innovation and operating a truly digital business, the IDC study said.
Automation will be at the forefront of the process, which in turn would help reduce the cost of IT operations, address labour challenges and shortages, and increase the pace of innovation, it said.
"No matter what the economy throws at us over the coming 12 months, organisations must not lose sight of their digital aspirations," Mr Lalchandani said.
The focus should be on enabling clear and measurable outcomes, and digital spending needs to transition from building to scaling, he said.