Countries in the Middle East need to improve technology education, the regulatory framework, provide financing to tech companies to help create more jobs and catch up with the rest of the world, experts said on Friday.
Despite having a young population and high mobile penetration rates in several countries, the region lags others areas in terms of technological advancement.
Digital contribution to the Middle East economy is at 4.1 per cent of gross domestic product (GDP), compared with 8 per cent in the US, according to a report by global consultancy McKinsey published last year. The number of unicorns in the region is just one, compared with 106 in the US, according to the consultancy.
“We cannot talk about technology alone, it has to be part of a larger ecosystem where education plays a part,” said Sherif Kamel, professor of management at the American University of Cairo, at an IMF panel in Washington.
“Education has to change, either we disrupt or we get disrupted.”
Education in technology needs to be embraced and embraced fast because technology has its drawbacks in terms of impacting jobs, experts said.
“I believe that technology runs faster than we actually ever have thought of,” said Ahmed Al Bader, the founder and chief executive of Saudi healthcare startup, SihaTech.
“We need to think about technology as an enabler. We need not to really fear it because growth will come from technology. It will take and it will give. It is not a zero-sum kind of equation.”
The Middle and the Arabian Gulf countries in particular are adopting new strategies to help beef up their technological ecosystem as part of plans to create jobs outside the dominant public sector.
In Saudi Arabia, the 2020 National Transformation Programme envisages the IT industry’s contribution to the non-oil GDP rising to 2.24 per cent from a baseline of 1.12 per cent.
In the UAE, various initiatives are underway, particularly led by the governments of Dubai and Abu Dhabi, which are developing their fintech industries. The UAE has embraced digitisation and introduced technology into school curriculum and education programs.
Fostering an appropriate regulatory framework for companies including those in fin tech is essential to help maintain their leadership position, according to experts.
“The right regulatory framework is still missing when it comes to technologies that are disruptive,” said Ola Doudin, founder and chief executive of Dubai-based bitcoin wallet and exchange BitOasis. “We are talking about frontier technologies. We are talking about block chain. We we are talking about digital currencies. We are talking about robotics. We are talking about AI.”
Besides the regulatory authority, startups in the region need the financial ecosystem to grow and that requires better access to venture capital, private equity and reduction of red tape according to Mitsuhiro Furusawa, deputy managing director at the IMF.
“There is a huge potential for the technology of finech,” said Mr Furusawa, adding that technology is a job creator.