Some 600,000 tech jobs could be added to the Gulf Cooperation Council economies by 2030 through developing tech champions to grow their digital economies, according to research from Strategy&, which is part of the PwC network. GCC countries have the potential to add $255 billion to the regional gross domestic product (GDP). The GDP windfall, which will include $119 billion from Saudi Arabia alone, can be realized by instituting the right policies and by developing “tech champions”.
Tech champions provide the economies of scale and scope necessary for innovation, talent attraction, job creation, large-scale investment, and exports. “By instituting the right policies and by developing tech champions, GCC countries could reach the level of advanced digital economies, adding US$255 billion to regional GDP, of which $119 billion would be in Saudi Arabia,” the new report found.
“We project that with the broader spillover effect of technology, the digital economy can reach up to 25 percent of GDP globally. In the GCC countries, the digital economy’s contribution to GDP can increase from 12.2 percent to 13.4 percent as these countries transition from being digital adopters to becoming digital disruptors,”
According to Chady Smayra, Partner at Strategy& Middle East, investment in research and development (R&D) and in start-ups remains limited, while foreign companies are still responsible for the bulk of their product development and service delivery. “While the GCC digital economy is growing rapidly, that alone will not make the region internationally competitive,” Smayra said.
“As the regional economy transitions to being led by digital disruptors, the digital economy could increase its contribution to regional GDP potentially by $30 billion over the next five years, from $169 billion to $204 billion,” Smayra said.
“The GCC stands to gain significantly if it can close the gap with leading digital economies, which themselves continue to develop fast,” the report found. To close the gap, GCC countries can tap into the so-called “tech champions”, which provide the economies of scale and scope necessary for innovation, as well as boosting exports, creating jobs and attracting talent and large-scale investments.
Last April, the UAE cabinet adopted the country’s Digital Economy Strategy, which seeks to increase the GDP contribution of the sector by 20 percent over the next ten years.