ARAB DIGITAL ECONOMY VISION

TOWARDS A SUSTAINABLE INCLUSIVE AND SECURE DIGITAL FUTURE

A R A B C O M M I S S I O N F O R D I G I TA L E C O N O M Y

2ND PRINT - V 3.0 - JANUARY 2020

 Copyright © 2020 by Arab Economic Unity Council, League of Arab
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Arab Digital Economy Vision:

Towards a Sustainable, Inclusive and
Secure Digital future.
Arab Vision for Digital Economy
Printed in Cairo, Egypt.
2nd Print
ISBN: 978-9948-38-722-0

Second Edition - 2020

ARAB DIGITAL ECONOMY VISION 3

 .2 International benchmarks 51
Contents • Selection criteria for benchmarked countries 51
• Lessons learnt 53
Appreciation 8 • International benchmarks and strategy framework 57
Executive Summary 10 .3 Arab countries current situation: Analysis 58
• Arab countries national digital strategies:
1. Digital economy as a lever of growth 17 Opportunities and challenges 58
• Arab countries performance on SDGs 61
1.1 Impact on economic growth 18
1.2 4.
Impact on employment and job creation 18 Strategy development 64
1.3 Impact on social welfare 20
1.4 Impact on competition 21 4.0 Dimensions, themes and initiatives 64
1.5 Impact on some governmental aspects 21 4.1 Digital foundation 69
1.6 Impact on Sustainable Development Goals (SDGs) 22
1.7 4.4.1 Key success factors 69
Impact of the digital strategy 26
2.2.1 Strategic objectives 70

4.1 Digital innovation 73

2. Vision and framework 27
4.1.1 Key success factors 73
2.1 Vision statement 27 4.1.2 Strategic objectives 74
2.2 The framework 27
2.2.1 Foundations 4.2 Digital government 76
28
2.2.2 End users 29 4.2.1 Key success factors 76
2.2.3 Technologies and Digital Concepts as 4.2.2 Strategic objectives 76
catalysts of digital economy 30
4.3 Digital business 79

3. 4.3.1 Key success factors 79

Strategy input 33
4.3.2 Strategic objectives 80
.1 Sectoral benchmarks 34
4.4 Digital citizen 82
0.0.1 Selection criteria for benchmarked sectors 35
0.0.2 The Sectoral benchmarks and 4.4.1 Key success factors 82
4.4.2 Strategic objectives 82
the strategy framework 50

4.5 KPIs and Arab Digital Index 95

4 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 5

Conclusion 98 Figure 12 Masterplan of Digital Economy 144

5. Appendix 102
List of Tables
5.1 Appendix 1: The economic and social impact of
the proposed digital strategy 102
Table 1 The ICT and the SDGs
Methodology and data 102 Table 2 Implementing e-health systems through the
• Regression results 105 established strategy in the Arab countries:
• Estimation of digitization impact 109 Examples of potential areas for saving costs and
increasing efficiency
Table 3 Lessons learnt from Sectoral Benchmark and
Methodology and data 192
Link to Strategy
List of Figures Table 4 The Lessons learnt from the international
benchmark and their link to the strategy
Table 5 Arab Countries’ National Digital Strategies,
Figure 1 Plans or Programs
Proposed Framework of Digital Economy 13
Table 6 The Five Dimensions, Strategic Objectives and
Figure 2 The Sustainable Development Goals (SDGs) 27
Programs 92
Figure 3 Proposed Framework of Digital Economy 35 Table 7 KPIs of Digital Foundation 124
Figure 4 Economy Sectors, Digital Readiness and Table 8 KPIs of Digital Innovation 124
Employment Rate 45
Table 9 KPIs of Digital Government 124
Figure 5 Digital Evolution Index (DEI) and
Table 10 KPIs of Digital Business 126
Selected Benchmarks 71
Figure 6 Table 11 KPIs of Digital Citizen 126
SDG Dashboard for the Middle East and
North Africa 86 Table 12 Impact of Digitization on Growth and
Figure 7 SDG Dashboard for Arab Countries 87 Unemployment, with Arab Country Dummy
Figure 8 Table 13 Impact of Digitization on Growth and
The Digital Strategy Five Dimensions 89
Unemployment, with Dummies for Low and
Figure 9 The Digital Strategy Structure 91
High Digital performance of Arab countries
Figure 10 ACDE Roles 114
Figure 11-a ACDE’s Organizational Structure 115
Figure 11-b ACDE’s Stakeholders Mapping 121
Figure 12 Macroeconomic and Sectoral Impact 143
Figure 12 Sectoral Contribution to GDP 143

6 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 7

Appreciation

The League of Arab States and the Arab Economic Unity Council
extend their appreciation and gratitude to the various members of
this project for their efforts in preparing the Arab Vision for Digital
Economy and the Guidebook.

Honorary Sponsorship and Funding

The project has received full sponsorship and generous funding

from the United Arab Emirates represented by HH Crown Prince
of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, and with
continuous follow-up and support from HH Lieutenant-General
Sheikh Saif bin Zayed Al Nahyan, UAE Deputy Prime Minister and
Minister of Interior, and Supreme President of the Arab Federation
for Digital Economy, Arab League.

The UAE provided its full support for this strategic Arab project,
and it left the content of this work entirely to project teams and
experts to ensure its integrity and cohesiveness.

8 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 9

 This strategy has identified three major challenges to work on:

1. Sustainability

EXECUTIVE SUMMARY
2. Inclusiveness
3. Security

Embracing the digital economy will not only help us address our
pressing problem today (such as depletion of natural resources,
dependency, unemployment, government inefficiency, etc.) but will
also improve our ability to achieve the Sustainable Development
Goals (SDGs). We will accelerate economic growth, create job
opportunities for our growing youth population, improve our
productivity, and achieve transparency while ensuring security and
privacy.

Our vision is to transform the Arab world into a digitally-enabled

economy and advance the region towards a sustainable, inclusive
and secure digital future towards an innovative, empowered and
integrated Arab community.

International statistics

The digital economy is estimated to contribute to around USD

1.2 trillion to the US economy and around USD 3.8 trillion to
the Chinese economy. An IDC (International Data Corporation)
study has indicated that the digital economy in Asia Pacific will
be worth USD 1.16 trillion by 2021 accounting for 60% of
the gross domestic product (GDP). Similarly, Europe’s Digital
The digital economy is changing the world view on value creation.
Single Market creates opportunities for new startups and allows
It will not only transform the way we convert our resources into
existing companies to reach a market of over 500 million people.
economic value-added outcomes, but it will also redefine our
Completing a Digital Single Market will contribute USD 465 billion
views on the available resources and how to utilize them to address
(EUR 415 billion) per year to Europe’s economy, create jobs and
existing economic and social challenges.
transform public services.
The main resource that drives the digital economy is the people,
Compared to a global average of 22%, the digital economy represents
and this is where the Arab World can have a real chance to join the
around only 4% of the Arab world GDP. The impact of digital economy
new age economic revolution. With youth representing more than
on fostering economic growth is five times higher compared to other
60% of the total Arab population, and a future focus on innovation
traditional methods. This is why it is of optimal importance for the
and digital augmentation of the way we live and work, we will be
Arab states to adopt a digital transformation strategy.
able to change the way the Arab world creates value and leaves
a mark.

10 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 11

The following report presents a concise description of the Arab Selected lessons are distilled from a variety of countries that
Digital Economy Strategy. The strategy is reviewed by around 75 have pioneered in their digital transformation. The selection of
distinguished experts representing many global organizations and benchmark countries was based on the state and the rate of digital
entities such as the European Commission, OECD, The World Bank, evolution. The chosen countries are the EU states, China, USA,
UNDP, UNDESA, Harvard University and others. Singapore, Malaysia and South Africa. The following describes the
main lessons learnt from the international benchmark study.
It has also benefitted from three studies: The International
Benchmark study, The Sectoral Benchmark study and The Arab 1. Digital foundation: Responsible authorities, infrastructure,
World Current Situation study. Nine high-performing countries policies and regulations act as key pillars for achieving digital
are benchmarked and several relevant lessons are distilled from innovation. Digital foundations are required to activate the
their digitization journey. Best practices are also presented from process of digital transformation and ensure its effectiveness.
six selected economic sectors that have shown notable potential
to be digitized in the Arab Countries. These sectors are healthcare, 2. National digital government strategy is the key enabler
manufacturing, financial services, education, agriculture and for the development of the digital economy agenda. Digital
commerce. adoption by government, business and individuals should be
improved in order to achieve significant socioeconomic impact
by using national capabilities.
The Arab vision for digital economy structure
3. Sectoral innovation plays a crucial role in digital
The strategy is built on five dimensions: transformation by disrupting traditional business models
and creating new ones. Incorporation of technology at the
• Digital foundation sectoral level adds value to traditional practices and enhances
• Digital Innovation productivity and operations to a great extent.

• Digital Government
4. Digital skills form the basis and the stepping-stone for
• Digital Business wide scale adoption of digital technologies. Effective use of
• Digital Citizen digital technologies requires information and communications
technology (ICT) specialist skills, generic ICT skills and
Twenty objectives, 15 themes and 50 programs are developed complementary skills such as information processing, self-
for the five dimensions. The programs are then directed to selected direction, problem solving and communications.
Arab countries.
5. Digital ecosystem of disrupting technologies act as a
The impact of the digital transformation on the Arab world economy catalyst for digital economy. Comprehensive ICT ecosystem
is significant. By 2030, The Arab countries GDP can grow due to enables ICT environment, fosters innovation within the sub-
digital economy from USD 2.6 trillion up to USD 4.15 trillion. sectors and bring significant benefits to entrepreneurs, youth
The cost to implement the strategy is estimated at USD 60 billion and SMEs.
per year. Total digital growth effect at full maturity could reach up
to USD 333 billion per year creating around 60 million new jobs 6. Finance and capital are considered as main pillars in the
in the coming two decades. framework of digitization. Funding is extremely crucial for the
realization of any digital strategies and agendas.

12 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 13

7. There is a need to establish special economic zones to operational efficiency, predictive and preventative maintenance,
encourage economic activity. Special economic zones create a supply chain management and inventories and logistics
link to the world’s intelligent cities, infuse technology across all management. Digital technologies can bring dramatic changes to
sectors and drive innovation and productivity. the world of manufacturing and offer opportunities to innovate and
increase output. They can create new production technologies,
8. Digital single markets break down barriers to cross-border new materials and new ways of storing, processing and sharing
online activity. They improve access to digital goods and data. New manufacturing devices, such as 3D printers, speed up
services and create an environment where digital networks product development cycles and make new collaboration processes
and services can prosper and maximize the growth potential. possible by supporting rapid prototyping and customization, with
fewer errors, and enable a faster time to the market.
Through the sectoral benchmark study, each of the selected six
sectors is analyzed in-depth, providing reasons for its selection,
the impact it will have and best practices globally. Finally, key Health care sector
lessons are distilled from each sector.
Healthcare comprises about 10.4% of the global GDP and is
considered the third major contributor to the global GDP. The
Financial services sector transition of the healthcare industry into digital healthcare system
for management and analysis of patient health is expected to be the
For example, the financial services sector comprises about 15% most vital driver of the market Global eHealth market is expected
of the global GDP and around 12% of the Arab world GDP. Financial to reach USD 308.0 billion by 2022, according to a new report by
inclusion stimulated by financial technology or FinTech clearly Grand View Research Incorporated. The Arab region healthcare
illustrates the positive relationship between the finance sector and digital transformation can create value for all stakeholders,
the economy. In this manner, FinTech is expected to contribute to whether governments, healthcare providers, professional, or
the Arab region economic development. People could have smooth patients. The primary benefits of digital transformation for the
access to financial services and businesses could utilize the more Arab citizen are likely to be improvements in healthcare access,
accessible payment services. Governments as well could benefit quality and affordability. For industry players, digitization can add
from blockchain’s transparency and security and their relation to value through enhanced revenue generation, capital efficiency,
cost savings. This can come from auditing and enforcing smart cost optimization and productivity.
contracts and avoiding fees that are associated with other payment
methods.
Educational sector

Manufacturing sector Besides, the role of the education system and educational
technology in teaching is of utmost significance due to the
Similarly, manufacturing comprises about 16% of the global presence of ICT in our daily lives. One cannot deny the importance
GDP and about 11% of the Arab world GDP. The application of of education for any community development and its considerable
smart manufacturing is expected to create USD 1.2 to 3.7 trillion 5% contribution to the global GDP expenditure. Education
of value worldwide by 2025. This comes in many forms, such as technology is the systematic and organized process of applying

14 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 15

information and communication technology to improve the quality The vision structures
and efficiency of education. For instance, e-learning is one of the
key aspects of e-education which is rapidly changing the education Our analysis of the Arab countries’ current situation revealed that
landscape. - E-Learning Market size valued at around USD 190 formulating and effectively implementing an Arab Digital Agenda,
billion in 2018, will grow at a CAGR of 7% from 2019 to 20251 must take into account the heterogeneity among Arab countries
in terms of income, competitiveness, infrastructure, innovation,
e-government development and digital readiness.
E-commerce sector We relied on the main published indices like:

Likewise, e-commerce is considered a crucial digital sector due to

• Global Competitive Index GCI
the perceived benefits it can add to the local firms on the country
scale, and to the overall economy of the Arab region. The wholesale • The E-Government Development Index EGDI
and retail sector is a major contributor to the overall global GDP • The Information and Communication
with 5.5%, and 6% contribution to the Arab world GDP. One can
• Technology Development Index IDI
simply say that e-commerce causes cost reduction and improved
efficiency. If implemented properly, it will lead to lower prices for • The Telecommunication Infra-Structure Index TII
goods and services, causing Arab markets to be more competitive.
E-commerce will allow procuring firms and individuals to purchase The vision stated for Arab digital economy is to transform the Arab
more widely and gain extra choices. It will allow selling firms to sell world into a digitally-enabled economy and advance the region
into new geographic markets as well as unreachable markets that towards a sustainable, inclusive and secure digital future to enable
would otherwise be uneconomic to serve. an innovative, empowered and integrated Arab community.

Agricultural sector

Precision agriculture is a modern farm management concept

that makes use of digital technologies to monitor and optimize
agriculture production processes. Instead of applying the same
amount of fertilizers over an entire agriculture field or feeding a
large animal population with an equal amount of feed, precision
agriculture helps to optimize fertilizers’ use, harvest time and
livestock feed after monitoring various field variations using new
sensor technologies, satellite navigation and positioning technology,
and Internet of Things (IoT). Agriculture accounts for nearly 6%
of the total GDP of the Arab countries. In addition to that, global
market size of precision agriculture is expected to garner USD 7.8
billion by 2022, registering a CAGR of 14.9% during the forecast
period 2016-2022.

1
https://www.gminsights.com/industry-analysis/elearning-market-size

16 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 17

 The strategy is built on five dimensions based on the framework in developing the digital system at the international, regional,
below: national or even organizational level. Any successful strategy has
to address these five components.
End Users
The second dimension, digital innovation, addresses innovation
Societal adjustment
Inclusion Affordability Accessibility to the digital as a catalyst for digitization. New disruptive technologies such as
3D printing, artificial intelligence (AI), big data and cloud computing
Adress needs

transformation
Dgital Economy/Sectorial Usage are revolutionizing concepts and creating new sources of value for

Enabler to
many industries. They can significantly alter the way businesses or
SMART SMART SMART SMART
Healthcare Construction/ Mobility Agricultures entire industries operate.
Building
SMART SMART SMART SMART The third dimension, digital government, addresses the needs of
Education Manufacturing Safety Leisure people through service provision, will improve the delivery of these
SMART SMART SMART SMART public services. Digitization will improve efficiency and transparency
Finance Logistics Energy Media within the government sector, thus down on bureaucracy. Similarly,
Enabler to

SMART SMART SMART SMART public services will be moved closer to civil society and enterprises,
Government Retail Water Cities which will not only facilitate the open government but also the
Digital Ecosystem of Innovation/Catalyst of Digital Economy decision-making process as a whole. Technology including smart
Autonomous
and mobile-friendly devices, plays a crucial role in achieving these
Blockchain Artificial

Influencer
3D Printing goals through the wider adoption of digital government services.
Crypto Agents and Itelligence,
currencies Things Cognitive
Computing, The fourth dimension is digital business which will benefit
Big Data Virtual Algorithmic
Machine
Reality automation
Learning tremendously from the digital transformation. The latter will
increase customer value proposition, improve cost efficiencies, and
Social Media Internet of
Enabler to

Robotics Cloud Digital Platform Everything establish a wider customer base by entering new markets. Support
should be extended to SMEs in their digitization efforts as they
Foundations play a fundamental role in the digital economy.
Polices & Digital Financing
Infrastructures Governance
Regulations Sklls & Capital The fifth dimension is the digital citizen. The digital ecosystem
should be citizen-centric. Digital technologies enhance the quality
Figure 1 Proposed Framework of Digital Economy
of lives of citizens and civil society, including vulnerable and
minority groups. Acquiring basic digital skills will empower citizens
to seize opportunities presented by technology and digitization. By
providing cheap, secure, accessible and affordable digital services
The main dimensions of the vision
to all people regardless of skills and financial abilities, will act as
an enabler for greater participation and contribution to community
The first dimension of the strategy, digital foundation, provides
development.
the necessary foundations for a robust digital ecosystem and
comprises five pillars: Infrastructure, policies and regulations,
digital skills, funding and governance. Each of the pillars is critical

18 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 19

The report will also include a detailed implementation plan with
projects’ budgets, timelines and key performance indicators. THE IMPORTANCE
The implementation plan includes fifty programs. These programs
of the digital economy and its pivotal
are the primary path for digital transformation of the region. For role as a catalyst for real economic
each of the programs, a detailed description is elaborated based on development
multiple criteria such as the description of the program, objectives,
main phases, prerequisites, required budget, stakeholders, etc.

In addition, a prioritization mechanism has been established to

identify the higher priority projects. This mechanism is a matrix
that evaluates each program based on its impact vs. its feasibility.
The results have led to the choice of the ten highest priority
programs to become pilot programs.

Then a governance model is established to define the roles and

responsibilities of the Arab Commission for the Digital Economy
(ACDE), its organizational structure, stakeholders mapping, etc.
There will be eight independent bodies that operate under the
umbrella of ACDE:

• Arab Union for Precision Agriculture (AUPA)

• Knowledge for Arabs Center
• Arab Innovation and Technology Institute (AIT)
• Accessibility and communication Excellence Center
• Arab E-Health Organization (AeHO)
• Arab FinTech Agency
• Arab Union for Modern Manufacturing
• Modern Arab E-University (MAU)

The funding of the strategy and its programs is a crucial matter that
needs to be analyzed carefully. As a result, the potential funding
sources are identified (29 sources of funds and 18 sources
of sovereign funds), taking into consideration their scope of
funding, their latest funding seal or limit per year, etc.

In order to measure the strategy’s impact and performance in the

upcoming years, defined KPIs and standards have been formulated.
Twenty-five KPIs are identified for each of the five dimensions of
the strategy and for each of the clusters.

20 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 21

 would grow the region’s GDP by 0.8% each year.5 Similarly, Europe
1. Digital Economy As A Lever of Growth Digital Single Market creates opportunities for new startups and
allows existing companies to reach a market of over 500 million
Digital transformation has vast effects on society at many levels. people. Completing a Digital Single Market will contribute USD 465
It allows the automation of business operations resulting in billion (EUR 415 billion) per year to Europe’s economy, create jobs
operational efficiencies, such as reduction of transaction costs, and transform its public services.6
which ultimately impacts productivity. Furthermore, it offers
new business opportunities, thus affecting employment and Nevertheless, there is another school of thought which argues that
entrepreneurship. It also enhances the provision of public services, digital transformation could also result in potential negative effects,
such as health and education, and improves the interaction between such as workforce disruption, the disappearance of companies,
citizens and their governments. In addition, digital transformation cybercrime and social anomie1. In addition, digitization may act as
affects human relationships and individual behavior, through a potential source of socioeconomic inequality. Proponents of this
facilitating communication and social inclusion.2 Thus, enhancing school of thought argue that digitization has changed the structure
digitization and creating digital markets can result in considerable and conditions of employment. Some jobs have disappeared or
economic and social benefits to societies and communities, through have become scarce. Moreover, they point out that the average
its potential to increase productivity, accelerate growth, facilitate worker today is poorer than 15 years ago despite the continuous
job creation, and enhance the quality of life for society in general. leaps in productivity, wealth and profits3.

Information technologies have been a significant contributor to the Accordingly, it would be quite relevant here to highlight possible
growth of developed economies over the last decade. For example, in socio-economic impacts of digitization, focusing on some key
2011, regardless of the poor global economic situation, digitization macroeconomic variables, including economic growth, employment
provided increased world economic output by about USD 193 and job creation, social welfare, competition, as well as variables
billion and created six million jobs worldwide.3 Digitization is 4.7 related to various governmental aspects.
times more powerful than the average impact of broadband rollout
in boosting economic growth, which is an average of 0.16% of per
capita GDP. The economic effect of digitization is also accelerating 1.1 Impact on economic growth
as the degree of countries’ digitization progresses.4
Digitization, including computing, broadband and mobile telephone
For instance, the digital economy in Asia Pacific will be worth USD networks, helps in relaxing scalability constraints, thus allowing
1.16 trillion by 2021 accounting for 60% of the GDP up from about traditional sectors of the economy to grow more rapidly. Mature
6% from last year, an IDC study has found. Commissioned by technologies contribute to improving productivity owing to the
software giant Microsoft, the study, which polled 1,560 business introduction of more efficient business processes supported by
decision makers across 15 Asia Pacific Accreditation Cooperation ICTs, marketing excess inventories and supply chain optimization.
(APAC) economies, also found that digital products and services Moreover, digitization results in extending market coverage leading
enabled by mobility, cloud, the Internet of things (IoT) and AI to revenue growth. It also affects the composition and operation
of industrial value chains. In addition, digitization promotes the
growth of some industries within the services sector (e.g. business
1
https://www.itu.int/en/Pages/default.aspx process outsourcing, and software development.
2
http://www3.weforum.org/docs/GITR/2013/GITR_Chapter1.2_2013.pdf
3
https://rocasalvatella.com/app/uploads/2018/11/maqueta_competencias_espanol.pdf
5
4
https://www.computerweekly.com/news/252435429/Digital-economy-to-make-up-60-of- APACs-GDP-by-2021
6
https://ec.europa.eu/digital-single-market/en/policies/shaping-digital-single-market

22 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 23

The introduction of new applications and services, including for 1.2 Impact on employment and job creation
example Internet information searches, distance education,
e-commerce and social networks, boosts economic growth. These
technologies help businesses in lowering costs, and hence raise The first wave of digitization had a significant impact on
efficiency and labor productivity in almost all economic sectors. employment, since it increased the demand for labor. In addition,
This is because better information facilitates better use of existing it resulted in huge job creation due to the construction and
capacity, optimizes inventory and supply chain management, cuts deployment of telecommunications networks. On the other hand,
downtime of capital equipment, and reduces risk. Furthermore, certain industries while undertaking digitization of their production,
the Internet contributes to making workers more productive, as were prone to reduce their workforce.
it helps in handing off routine and repetitive tasks to technology,
and hence workers can focus on activities with higher value.7 During the second wave of digitization, many jobs were created
as a result of increased demand for labor in specific jobs linked
Additionally, the developments in big data analysis, robotics, and
to the development of digital services or the emergence of
machine learning have significant implications for productivity
collaborative business models. However, many jobs disappeared
improvement.
as a result of automation, and the labor market witnessed labor
force polarization because of the “hollowing out” of middle-skill
Empirically, studies that only concentrated on the penetration of
jobs. The impact of the third wave of digitization on employment
broadband technology showed a gain in per capita GDP of just 0.16
is, however, debatable. Studies in this area are divided into two
to 0.25 %. However, other recent studies find that an increase in
groups: the first foresees a dramatic disappearance of jobs as
digitization of 10 percentage points generates a percent gain in per
a result of automation, while the second argues that negative
capita GDP of 0.5 % in digitally-constrained economies, 0.51% in
disruption effects are overstated.
emerging economies, 0.58 % in transitional economies and 0.62
% in advanced stages of digitization.8
In general, digitization creates new jobs, while other jobs become
redundant.10 It transforms existing jobs, since new skills are
Digitally-constrained economies get the least benefit, basically
required to accomplish new tasks. This implies that the current
because they still need to establish an ICT ecosystem that can
work force has to be either retrained or replaced by workers who
derive the benefits of digitization. Also, a study by Sabbagh et al.
already have the new skills.11 Studies indicate that the fourth
(2013)2 shows that an increase of 10% in a country’s digitization
score increases GDP per capita growth by 0.75% on average. industrial revolution will have a huge impact on the labor market.
Moreover, Katz and Callorda (2017)9 indicated that 1% increase in a They also argue that this impact will differ by sector and that the
rising new jobs will take many forms.12 “A recent report from
digital ecosystem development index, which corresponds primarily
to the first and second waves of digitization, yields 0.13% increase McKinsey Global Institute (MGI) says that digital economy has the
in per capita GDP growth. In addition, it is concluded that as the potential to unlock productivity and would create 60-65 million
digitization level of a country advances, the higher is its growth. new jobs by 2025.13

10
http://aei.pitt.edu/88531/1/EESC_Digitalisation.pdf
11
http://reports.weforum.org/digital-transformation/understanding-the-impact-of-digiti-
7
http://documents.worldbank.org/curated/en/896971468194972881/pdf/102725-PUB-Re- zation-on-society/?doing_wp_cron=1535365028.0432989597320556640625
12
placement-PUBLIC.pdf https://www.etui.org/content/download/22130/184851/file/ver+2+web+version+Work-
8
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.913.2649&rep=rep1&type=pdf ing+Paper+2016+02-EN+digitalisation.pdf
9 13
http://www.teleadvs.com/wp-content/uploads/Katz_Callorda_Estimacion_del_impacto_ https://www.thehindubusinessline.com/news/digital-economy-will-create-over-60-m-
socioeconomico_del_crecimiento_del_ecosistema_digital_en_America_Latina_v2.pdf jobs-by-2025/article26695072.ece

24 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 25

Full incorporation and application of digitization has a larger It is worth noting that digitization has more significant employment
effect on employment compared to mere broadband penetration, effects in emerging markets compared to developed ones, due to
because it results in creating more jobs in the digital sector, such as three main reasons. Firstly, the digitization gain in the advanced
software development, business process outsourcing, equipment economies is less than it is in some emerging regions. Secondly,
manufacturing, and parts supplies. According to Sabbagh et al. some of the emerging countries have very large populations
(2013)2, 10 points increase in the digitization score leads to a (e.g. China and India), which implies that a minor decrease
1.02% decrease in the unemployment rate. On the other hand, the in the unemployment rate results in a large number of jobs.
same magnitude of increase in broadband penetration, results in Finally, off shoring grows along with digitization. As companies in
a drop of only 0.22% in the unemployment rate. Thus, digitization digitally advanced countries improve their productivity thanks to
effect on reducing unemployment is considered 4.6 times greater digitization, they transfer jobs to digitally emerging countries 2.
than that of the widespread adoption of broadband.
Nonetheless, digitization could lead to an increase in unemployment,
In addition to creating direct jobs, the number of jobs enabled as automation replaces many human beings, and many workers
by digital technologies is fairly large. These technologies reduce could lose their jobs, especially low- and middle-skill jobs. In
transaction costs and increases opportunities for individuals who addition, automation of many tasks through Internet could lead
face obstacles in finding jobs or productive inputs. This supports to greater inequality rather than greater efficiency, if the workers
inclusion for women, people in remote areas, and persons with do not have the skills that technology augments6. Thus, it is quite
disabilities. Impact outsourcing helps in bringing Internet-based necessary to devote adequate efforts to re-skilling and up-skilling
jobs to poor and vulnerable people6. the existing labor force, in addition to including STEM+IE (i.e.
innovation and entrepreneurship) in the formal education system
Furthermore, digitization and the emergence of the on-demand to minimize the impact on the workforce. Moreover, digitization
economy allow new forms of employment to exist, such as online or could threaten maintaining a healthy work-life balance, due to
distance work. Hence, they strongly affect how work is organized, the absence of adequate negotiations between employers and
as well as employer-employee relationship. Digitization and the employees.12
on-demand economy make work less bound to space and time
In sum, digitization has four main areas of impact on the labor
Digitization and the on-demand economy make work less bound market, namely:
to space and time, e.g. more autonomy and better monitoring of
work outcomes.14
• Job creation: new sectors, new products and new services.

• Job change: digitization, human/intelligent machine interface,

new forms of management.

• Job destruction: automation, robotization.

• Job shift: digital platforms, crowd sourcing and ‘sharing’ economy.

14 https://www.researchgate.net/publication/302973038_Perspectives_on_The_Rise_and_
https://www.researchgate.net/publication/302973038_Perspectives_on_The_Rise_
and_Fall_of_American_Growth Fall_of_American_Growth

26 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 27

These four areas of impact of digitization are buttressed by 1.3 Impact on social welfare
macroeconomic stakes deriving from advances in labor markets,
wages, social inequality, quality of newly created, changed, or
‘shifted’ jobs, etc. 11. Another important impact of digitization that is not adequately
studied, is its impact on social welfare. In fact, there is no universal
agreement on the way social welfare can be measured.15 Studies
often use inequality in societies as a measure for the degree of
social welfare. However, in emerging countries that need to reduce
poverty, there will always remain a complex correlation between
economic growth and social inequality7. Also, other studies have
used the United Nations Development Programme’s (UNDP’s)
Human Development Index (HDI) as a proxy for equality of access
to basic services, in order to assess the social impact of digitization.
New Jobs Creating Social security professionals and experts of the International
Digitalization, Machine Jobs Opportunities Social Security Association (ISSA) are committed to sustaining
learning, Smart Machines, New sectors, New and further extending social security protection in line with the
robotics, New forms of prodcuts, New Service objectives of the United Nations Sustainable Development Goals
management
for 2030. Accordingly, ISSA prepared a report, which spotlights
ten of the most important global challenges that confront social
security systems.16

This report was based on research and consultation of more than

280 government departments and social security institutions around
the world. These challenges include; closing the coverage gap,
Changing Functions inequalities across the life course, population ageing, employment
Employment Pattern Elimination of young workers, labor markets and the digital economy health
and long-term care, new risks, shocks and extreme events,
Digital platforms, Sharing Automation, Use of
economy robotics protection of migrant workers, the technological transition, and
finally higher public expectations.

15
Cornachione, M., Panday, P. & Parrishet, B. (2008). A wellbeing index based on an en-
abling environment. International Journal of Social Economy, 35(3), pp.174-187.
16
https://www.issa.int/en/ten-global-challenges-for-social-security

28 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 29

Several studies showed that the increase in the level of digitization interests. Moreover, large economies of scale, which the Internet
boosts social well-being17. For example, a study estimated that delivers, along with business environment that hinders competition
a 10-point increase in the digitization score leads to an increase could result in excessive concentration of market power and rise of
of approximately 0.13 points in the HDI. It was found that the monopolies, restraining future innovation6.
digitization impact is greatest in constrained and emerging
economies. Meanwhile, in more developed economies where On the other hand, the characteristics of Internet-based services
basic human needs are more easily met, digitization plays a less could encourage competition. For example, price comparison
pronounced role in expanding access to education, sanitation, websites result in reducing prices for consumers. However,
water, and healthcare.18 In addition, it was found that Internet evidence shows that price dispersion on the Internet persists,
adoption, introduction of broadband and using personal computers partly due to the ability of companies to price discriminate based
have yielded significant increase in household income. While these on search history, geographical location, or other information
results apply to developed countries, they are not true for less about the buyers. Furthermore, the Internet makes market entry
developed ones. Although digitization has a considerable impact easier, since the Internet firms can start and scale up rapidly with
on social well-being, people living in less developed countries have a relatively small number of staff and low capital investment. In
other priorities as they struggle for daily survival7. addition, cloud computing lowers startup costs and permits firms
to expand capacity, when there is additional need. This in turn
However, digitization also generates a number of negative effects. reduces the risk for investors6.
It leads to degradation of human relationships as a result of
intense digital consumption. It lessens the ability of children and Even though Internet firms seem to compete with their
adolescents to conduct knowledge gathering activities, such as equivalents, many of them, if not all, also compete with offline
reading. Moreover, limited local Internet content in developing firms. For example, search engines and social media sites compete
regions, with the dependence on one language, makes the with traditional media for advertising revenue, e-commerce firms
Internet a vehicle for cultural uprooting. The development of local compete with brick-and mortar firms, and instant messaging apps
digital content entails vast opportunities to satisfy the needs of a compete with telecoms. This online-offline competition ultimately
country’s citizens that would only adopt broadband if they were to triggers innovations that benefit consumers, mainly when offline
find a product that is culturally relevant to their needs1. markets are distorted6.

In general, it can be said that digitization can substantially

1.4 Impact on competition enhance competition, facilitate market entry, open up potential
markets that firms can serve, and create new ones9. A recent trend
Automation and Internet-based services cause a drop of marginal is that online and offline firms will tend to complement each other
transaction costs to zero. This could have two opposite consequences in what is called O2O (Offline to Online or Online to Offline; it is
on the market structure. On one hand, low marginal costs imply applicable).19 The recent surge of Amazon market value started
large economies of scale, which support natural monopolies. This from its offline outlets, and its founder became one of the richest
requires some regulation from the government to protect consumer persons in the world and is expected to be the first to reach the
USD 2 trillion market cap.20

17
Kavetsos, G. & Koutroumpis, P. (2011).Technological affluence and subjective well-being.
19
Journal of Economic Psychology, 32(5), pp. 742-753. https://www.bigcommerce.com/ecommerce-answers/o2o-commerce/
18 20
http://unpan1.un.org/intradoc/groups/public/documents/unpan/unpan050670.pdf. https://www.thestreet.com/investing/amazon-apple-two-trillion-market-cap-14704068

30 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 31

 1.5 Impact on some governmental aspects integrated, and more informed policy making. The Internet further
raises government efficiency and productivity through automation
and data-driven management. This happens because the Internet
Digital technologies help in better informing citizens of government’s lowers the cost of communication and coordination dramatically.
activities and hence open new paths for participatory democracy However, there is a need for efficient and effective identity
and improve public sector efficiency. This is usually accompanied management (analogue and digital) for better policy making,
by a stronger demand for e-government services7. foresight and forecasting, as well as public service delivery. If one
does not know identities, increased administrative burdens are
Digital identification facilitates conquering barriers to participation. faced by businesses and individuals to prove who they are.
Several countries started using general-purpose digital identity
(ID) schemes or specific systems for elections to manage post Nearly all countries try to automate tax and customs administration,
conflict transfers. Moreover, digital technologies allow the poor to as well as budget preparation, execution, and accounting. Results
vote by providing them with robust identification and restraining have been mixed, though. E-filing reduces tax compliance costs,
fraud and bullying through better monitoring. Mobile phones enable and one-stop computerized service centers and online portals
citizens to report instances of violence and voter intimidation, have improved service efficiency. Digital technologies improve
thus improving electoral participation. Social media, in turn, may management within governments by monitoring the performance
overcome the traditional barriers to citizen collective action. Many of workers. Studies report that generally, technology-based
empirical studies showed that cell phones and the use of Twitter monitoring has positive effects on worker absenteeism, along with
and Facebook supported protests during the Arab Spring in the other institutional reforms. Finally, it is true that digital technologies
Egypt, antiwar demonstrations in the United States, and citizen help overcome information barriers that hinder service delivery.
mobilization across Africa6. Yet, if governments stay unaccountable, this would result in more
control, rather than greater empowerment and inclusion6.
Yet, before adopting such technologies, countries have to stimulate
the demand for e-government services, through encouraging
In sum, it can be concluded that digitization has significant
the adoption of connected digital appli¬cations by individuals,
positive socio-economic effects that usually outweigh its negative
businesses, and government agencies. Developing mar¬kets in
consequences. In addition, the impact of digitization varies greatly
the early stages of digitization should focus on boosting demand
by country and by sector. Developed economies benefit from higher
for basic telecommunications services such as fixed, mobile, and
economic growth, but likely lag behind emerging economies in job
broadband across both public and private sectors. As countries
creation. This is mainly due to the different economic structures of
move to more mature stages, governments should focus on
developed and emerging economies2,7.
boost¬ing service adoption. Governments can also stimulate
demand by ensuring that all public services—such as paying
taxes, renewing drivers’ licenses, and enrolling in school—can be 1.6 Impact on Sustainable Development Goals (SDGs)
performed using broadband networks.21
In the year 2000, when the international development community
Governments, mainly those in digitally-advanced countries, came together at the United Nations (UN) to approve the
take advantage of data analytics and digital platforms for faster, Millennium Development Goals (MDGs), the digital revolution was

21
https://www.strategyand.pwc.com/media/uploads/Strategyand_Maximizing-the-Im-
pact-of-Digitization.pdf.

32 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 33

just beginning. At that time, there were fewer than 1 billion mobile “Technology has great potential to help deliver the SDGs, but it can
phones in use worldwide and only 400 million Internet users. In the also be at the root of exclusion and inequality. We need to harness
intervening years to 2015, when the MDGs were reviewed, both the benefits of advanced technologies for all”.
indicators have grown by more than sevenfold. Thus, Target 18 -
to make available the benefits of new technologies, including ICTs These were the words of the UN Secretary-General, Antonio
(information and communication technologies) - was one where Guterres, at the closing of the 2018 High-Level Political Forum on
progress was easy to demonstrate. But with the new generation Sustainable Development. The benefits of digital technology for
of SDGs, adopted by the UN in 2015, the bar has been raised. As the SDGs is relatively well-integrated into the 2030 agenda, not
part of a broader Goal 9, on infrastructure, industrialization, and only through Goal 9 (industry, innovation, and infrastructure), but
innovation, the SDGs commit to “significantly increase access to also through the Technology Facilitation Mechanism and its Science
ICTs and strive to provide universal and affordable access to the Technology and Innovation (STI) Forum. By now, there is a well-
Internet in LDCs [least developed countries] by 2020.” Given that established understanding that digital technology can help drive
many developed countries are already close to saturation in terms
of mobile penetration, it is logical to focus on Internet access, and progress for all goals, and that ICT is considered a powerful enabler
specifically on the needs of the LDCs.22 for each of the 17 goals, and an essential catalyst in driving rapid
transformation of nearly every aspect of our lives.23 [See Table (1)
and Figure (1)].

Table 1 The ICT and The SDGs24

SDG ICT role in achieving the SDGs

There are still more than 2 billion “unbanked”
people in the world. Now, thanks to digital financial
services, many are participating in the digital
economy for the first time; and access to financial
No Poverty services has proven to be a pivotal step in helping
people lead out of poverty. In addition, timely and
accurate information services will help ensure equal
rights to economic resources and market insights
that can benefit all.

To feed a growing population, agriculture is

increasingly knowledge-intensive. ICTs help farmers
Zero improve crop yields and business productivity
Hunger through better access to market information,
weather forecasts, training programmes, and other
Figure 2 The Sustainable Development Goals (SDGs) online content tailored to their needs.

22
http://documents.worldbank.org/curated/en/896971468194972881/pdf/102725-PUB-Re-
24
placement-PUBLIC.pdf. https://www.itu.int/en/sustainable-world/Pages/default.aspx.

34 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 35

 ICTs have the potential to deliver benefits across ICTs have the potential to help reduce inequality both
the global healthcare ecosystem. Patients can within and between countries by enabling access
contact health care services remotely regardless to information and knowledge to disadvantaged
of their proximity to a healthcare centre. Health segments of society – including those living with
care workers can, for example, learn and prepare Reduced disabilities, as well as women and girls. However,
Good
Health and for disease outbreaks, identify patient symptoms, Inequalities by the end of 2016, more than half of the world’s
Well-being follow established treatment protocols, perform population – 3.9 billion people – were not yet
remote diagnostics, access expert support and so using the Internet and access was uneven between
on. Big Data analytics can help produce snapshots, genders and geographically. Reducing inequalities
analyze trends, and make projections about disease cannot be achieved without addressing these
outbreaks, health service usage, and patient underlying issues.
knowledge, attitudes, and practices.
With more than half the world’s population already
ICTs are powering a revolution in digital learning, living in urban environments, ICTs will be essential
which has become one of the world’s fastest-growing in offering innovative approaches to managing
industries. Mobile devices now allow students to cities more effectively and holistically – through
Sustainable
Quality access learning assets anytime, anywhere. Teachers Cities and applications such as smart buildings, smart water
Education are now using mobile devices for everything from Communi- management, intelligent transport systems, and
literacy and numerical training to interactive ties new efficiencies in energy consumption and waste
tutoring. Indeed, mobile learning has the ability to management. Using ICTs to make cities more eco-
help break down economic barriers, divides between friendly and sustainable is vital – not just for the
rural and urban, as well as the gender divide. well-being of urban inhabitants, but also for the
sustainability of the planet.
Without the digital infrastructure that powers our
wireless world and forms the backbone of our digital ICTs and responsible consumption and production
economy, the world would not be able to deliver the are linked in two ways: increased dematerialization
ICT applications that enable scalable solutions to the and virtualization as well as innovative ICT
Industry, SDGs. ITU believes broadband must be considered applications enabling sustainable production and
Innovation Responsible
essential infrastructure for the 21st-century due to consumption. Cloud computing, smart grids, smart
and Infra- Consump-
its capacity to power industry and innovation. And metering, and reduced energy consumption of
structure tion and
ITU’s role in the adopting of globally harmonized Production ICTs all have a positive impact on reducing our
spectrum and standards is essential to facilitate the consumption. However, ICTs themselves require
development of transformative digital infrastructure, energy consumption. Therefore, effective policies
such as 5G systems, that will drive scalable solutions are needed to ensure the negative impacts of ICTs,
to all 17 SDGs. such as e-waste, are minimized.

36 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 37

 ICTs, including satellite monitoring, play a crucial ICTs can play an important role in crisis management,
role in earth monitoring, sharing climate and humanitarian aid and peacebuilding, and have
weather information, forecasting, and early warning proved to be a powerful aid in areas such as
Climate systems. ICTs therefore enable both the global electoral monitoring. The growing use of open data
Action monitoring of climate change as well as strengthen by governments increases transparency, empowers
resilience by helping mitigate the effects of climate citizens, and helps to drive economic growth. ICTs
Peace,
change through forecasting and early warning Justice are also essential in terms of record-keeping and
systems. and Strong tracking government data and local demographics.
Institutions When natural or man-made disasters occur, ICTs are
ICTs can play a significant role in the conservation crucial in obtaining, communicating and transmitting
and sustainable use of the oceans – notably through accurate and timely crisis information, allowing
improved monitoring and reporting which leads to appropriate responses to be made. In the future, big
increased accountability. Satellite-based monitoring data analysis and data mining should allow better
Life Below delivers timely and accurate data on a global basis, use to be made of the vast amount of data that is
Water while local sensors deliver on the spot updates in already openly accessible online.
real-time. Big data can be used to analyze short and
long-term trends in terms of biodiversity, pollution, ICTs are specifically mentioned as a means of
weather patterns and ecosystem evolution, and to implementation under SDG17, highlighting the cross-
plan mitigation activities. cutting transformative potential of ICTs. Indeed,
ICTs are crucial in achieving all of the SDGs, since
ICTs can play a significant role in the conservation ICTs are catalysts that accelerate all three pillars of
and sustainable use of terrestrial ecosystems and sustainable development – economic growth, social
the prevention of the loss of biodiversity – notably Partner- inclusion and environmental sustainability – as well
through improved monitoring and reporting which ships for as providing an innovative and effective means of
leads to increased accountability. Satellite-based the Goals implementation in today’s inter-connected world.
Life on Land monitoring delivers timely and accurate data on Paragraph 15 of the 2030 Agenda for Sustainable
a global basis, while local sensors can deliver on Development highlights that“(t)he spread of
the spot updates in real-time. Big data can be information and communication technology and
used to analyze short and long-term trends in global interconnectedness has great potential to
terms of biodiversity, pollution, weather patterns accelerate human progress, to bridge the digital
and ecosystem evolution, and to plan mitigation divide and to develop knowledge societies…”.
activities.

38 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 39

1.7 Impact of the digital strategy

The Impact of the strategy is assessed at the end of the study

through a proposed economic model. The model assesses the
impact of digitization on both the GDP per capita growth and
the unemployment rate. The Arab countries are divided into two
VISION AND
groups according to their digital performance and based on the
latest Networked Readiness Index (NRI) developed by the World
Economic Forum. Then, the effect of digitization is measured
FRAMEWORK
according to each group’s digital performance.

The dataset that fed the proposed model was selected from
different international data sources and published indices with the
aim of incorporating the five proposed dimensions of the digital
strategy and cover the components of the adopted framework of
digitization. In this regard, seven variables were selected from
the NRI and used in the economic model to reflect the proposed
dimensions of the digital strategy. For example, the business usage
index (6th pillar of the NRI) was used to proxy the digital business
foundation and the government usage index (8th pillar of the NRI)
was used to proxy the digital government dimension.

VISION AND FRAMEWORK

40 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 41

 the digitization process. Their sustainability helps in reaching the
2 Vision and Framework required social and economic impact, which is the third component
of this framework6, 25, 26, 27 (see Figure 2).

2.1 Vision Statement

Transform the Arab world into a digitally-enabled economy and End Users
advance the region towards a sustainable, inclusive and secure Societal adjustment
digital future to enable an innovative, empowered and integrated Inclusion Affordability Accessibility to the digital

Adress needs
transformation
Arab community.
Dgital Economy/Sectorial Usage

Enabler to
SMART SMART SMART SMART
2.2 The Framework Healthcare Construction/ Mobility Agricultures
Building

Generally speaking, a digital economy requires a suitable SMART SMART SMART SMART
Education Manufacturing Safety Leisure
environment to flourish and attain its development goals. This
environment consists of an infrastructure that individuals, SMART SMART SMART SMART
Finance Logistics Energy Media
businesses and governments need for a reliable and widespread

Enabler to
access to digital networks and services. The aim is to benefit SMART SMART SMART SMART
Government Retail Water Cities
from digital opportunities and regulations that create a lively
business climate and enhance firms’ competence and innovation Digital Ecosystem of Innovation/Catalyst of Digital Economy
in digital technologies and hyper connected world. Skills are also Blockchain Autonomous Artificial

Influencer
3D Printing
created that allow workers, entrepreneurs, and public servants Crypto Agents and Itelligence,
currencies Things Cognitive
to effectively benefit from digital opportunities, in addition to
Computing,
institutions that are accountable to citizens who are empowered Big Data Virtual Algorithmic
Machine
Reality automation
through the efficient use of technology6. Learning
Social Media Internet of

Enabler to
Robotics Cloud
Digital technologies add two further dimensions to the foundations Digital Platform Everything
of economic development. Firstly, they raise the opportunity cost
Foundations
of not undertaking the necessary reforms. Secondly, they are
Polices & Digital Financing
perceived as an enabler, and perhaps an accelerator, towards Infrastructures Governance
Regulations Sklls & Capital
development by raising the quality of services.
Figure 3 Proposed Framework of Digital Economy
The framework of digitization is divided into three main
components. First, foundations and pillars that are required
to activate the process of digital transformation and ensure its
effectiveness. Second, complements that support the success of
25
http://www3.weforum.org/docs/GITR2016/GITR_2016_full%20report_final.pdf.
26
http://dx.doi.org/10.1787/9789264276284-en.
27
https://www.dinl.nl/wp-content/uploads/2016/11/17112016-Dutch-Digital-Infrastruc-
ture-Report-2016.pdf.

42 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 43

2.2.1 Foundations and c) technical and technological skills developed through
postsecondary schooling or training or acquired on the job,
as well as skills related to specific occupations (for example,
• Digital infrastructure: This includes efficient, reliable and engineer, IT specialist).
widely accessible broadband communication networks and
services, data, software, and hardware. Individuals, businesses • Financing and capital: For digital transformation to occur,
and governments need reliable and widespread access to digital budgets need to be assigned based on outcome measurement,
networks and services to benefit from digital opportunities. performance-based budgeting or results-based budgeting.
This requires adequate investment in digital infrastructures Thus, governments and businesses need to work on assigning
and competition in the provision of high-speed networks and the appropriate budgets to apply digital technologies and reap
services. There is also the need for organizational change, their gains.
including investments in data and other knowledge-based
capital to realize the full potential of the digital transformation. • Governance: There are two types of necessary institutions in
the process of digital transformation.
• Policies and Regulations: This is a mandatory pillar that
supports the development of the digital economy. It includes ► Formal institutions, which include laws, rules, and regulations,
updates and creates new policy frameworks to promote that facilitate technology penetration and development of
investment, competition and innovation. It also protects business activities. This is through regulations that ensure
consumer interests and expectations by using new digital easy entry and exit of firms and facilitate competition to lower
solutions. prices and increase coverage and quality, besides an open
trade regime that exposes companies to foreign competition
• Digital skills: Access to digital networks provides the technical and investment. Digitization ready legislations, similar to
foundation for the digital transformation of the economy and the Danish approach, further facilitate but do not hinder
society, but does not by itself necessarily guarantee effective innovation and use of technology, but rather protect rights and
use. This effective use of digital technologies requires a wide privacy etc. Technology interacts with such rules to create new
range of skills, including ICT specialist skills, generic ICT skills, ideas, such as new methods of producing goods and services.
STEM+IE (i.e. innovation and entrepreneurship), as well as Technology is traded across markets and borders, while most
complementary skills, such as information processing, self- rules are established locally. When it encounters rules that do
direction, problem solving and communications. These skills not match, technology fails to deliver the expected benefits.
interact with the available technology allowing routine tasks Barriers to competition, for example, lessen the need of firms
to be automated. Workers with the right abilities leverage to reach for the technological frontier and sometimes prevent
technology to become more productive. Education systems new businesses with new technologies and lower prices from
should have a role in shaping these skills in early stages. entering the market and competing with existing firms.
Notably, the pace of change is quick, and the types of skills
in demand change rapidly. Thus, workers need to upgrade ► Informal Institutions, which are socially-shared rules, usually
their skills frequently throughout their careers. On the other unwritten, that are created, communicated and enforced
hand, technology can play a role in shaping three types of outside the official channels. In this context, they may include
skills needed in the modern economy, which include a) the level of innovation and conditions that allow the digital
cognitive and foundational skills (e.g. literacy, numeracy, and transformation level of trust in the digital economy, as well
higher-order cognitive skills), b) social and behavioral skills, as digital security and awareness to flourish.

44 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 45

2.2.2 End users 2.2.3 Technologies and Digital Concepts
as catalysts of digital economy

• Inclusion: By reducing the cost of acquiring information,

The digital economy is based on a set of emerging technologies
making more information transparently available, providing
that disrupt the traditional business model and introduce new
secure systems, and encouraging legal frameworks, digital
innovative alternatives. Below is a description of eight examples of
technologies can make new transactions possible and people
these emerging innovations such as:
could easily access services that previously were out of reach.
Digital and financial inclusion can be promoted by improving
digital literacy.
• Distributed ledger technologies / blockchain

• Affordability: Governments and businesses need to provide

Distributed ledger technology (DLT), also commonly referred
digital goods and services at affordable prices to citizens.
to as blockchain technology, is a new technology of storage
and transmission of information, transparent, secure, and
• Accessibility: Making the digital technologies universally
functioning without a central control body. By extension,
accessible should be a global priority. Individuals, businesses
a blockchain is a database that contains the history of all
(including small and medium-sized enterprises (SMEs)) and
the transactions between its users since its creation. This
governments need reliable and widespread access to digital
database is secure and distributed meaning that it is shared
networks and services to benefit from digital opportunities.
by its different users, without intermediaries, which allows
Through inclusion, efficiency, and innovation, access provides
everyone to check the validity of the chain. Blockchain by its
opportunities that were previously unreachable by the poor
functionalities ensure the delivery of Trust, Transparency and
and disadvantaged.
Immutability as key benefits.

• Societal adjustment to the digital transformation: Society

is quite affected by the digital transformation in several ways.
• Big data analytics
On the one hand, automation may reduce employment in some
occupations while job platforms may increase non-standard
The digitization of day-to-day activities has dramatically
jobs i.e. short-term, part-time or low-paid jobs, and widen the
increased the amount of data available, creating extremely
gender wage gap. On the other hand, e-services, particularly
large and complex data sets commonly referred to as big data.
e-health, may help society to address the challenges of the
By big data is meant all the digital data produced by the use of
aging population and increasing social expenditures.
new technologies for personal or professional purposes. This
overlaps with corporate data (e-mails, documents, databases,
business process histories etc.) as well as data from sensors,
content published on the web (images, videos, sounds, texts),
e-commerce transactions, exchanges on social networks,
data transmitted by connected objects (electronic tags, smart
meters, smartphones ...), geolocated data, etc.

46 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 47

 • Internet of things smart office, with automated, Internet-controlled devices like
thermostats, security systems and connected home speakers.
The IoT characterizes connected physical objects that have Now, urban areas around the world are investing in IoT to
their own digital identity and are capable of communicating create smart cities, which are designed to improve efficiency
with each other. This network creates a kind of bridge between and quality of life through data and technology.
the physical world and the virtual world.
The smart city concept integrates information and
From a technical point of view, the IoT consists of the direct and communication technology (ICT), and various physical devices
standardized digital identification (IP address, SMTP protocols, connected to the network (the Internet of things or IoT) to
http) of a physical object using a wireless communication optimize the efficiency of city operations and services and
system that can be a chip Radio-Frequency Identification connect to citizens.
(RFID), Bluetooth or Wi-Fi. The IoT can provide rich information
regarding individuals’ behaviors. Thus, the resulting data can
be used for increased tailoring of products, risk profiling and • Cloud computing
pricing.
Cloud computing is a revolutionizing concept that allows the
An example of the IoT applications can be Smart Cities. As the storage of data or software on remote-located servers that is
Internet of Things is growing and rapidly spreading everywhere usually stored on a user’s computer, or even on servers installed
today, from industrial applications to emergency services, in a local area network. This virtualization of resources allows
public transportation, public safety, city lighting and other the company to access its data without having to manage an
smart city applications. Due to IoT technology advancements, IT infrastructure, which is often complex and includes a cost to
municipalities are becoming more and more connected in an the company. Also, Cloud computing knows a new shift toward
effort to increase the efficiency of infrastructure installations, Hybrid and Multi-Cloud and not restricted to remote server
improve reliability and responsiveness of emergency services, storage.
cut costs and more. In fact, “smart cities” could be considered
a collection of industries that includes city lighting, city Cloud computing is considered a major evolution of computing
transit, waste water management, emergency services, traffic that allows access to data and software from anywhere in a
management and more. secure way. Cloud-based services provide cost-efficient and
relatively easily scalable on-demand processing and storage
A ”smart city” is an urban area that uses different types of capacity for data. Cloud technology has greatly increased the
electronic data collection sensors to supply information which capacity of financial institutions to collect and analyze data,
is used to manage assets and resources efficiently. This thereby facilitating the growth in data analytics and their
includes data collected from citizens, devices, and assets that various applications.
is processed and analyzed to monitor and manage traffic and
transportation systems, power plants, water supply networks,
waste management, law enforcement, information systems,
schools, libraries, hospitals, and other community services. The
Internet of things (IoT) has given rise to the smart home and

48 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 49

 • Artificial intelligence • Augmented/virtual reality

AI is the scientific field that deals with the research, design Augmented and virtual realities provide new ways for
and implementation of intelligent machines. It combines consumers to perceive or interact with their environment. The
the computing science with applied mathematics. It focuses difference between the two is that augmented reality provides
on machine learning patterns by using a range of different an enhanced view of the actual physical world in which
characteristics of human intelligence such as recognition, individuals find themselves, whereas virtual reality creates a
understanding, learning, problem solving, reasoning and simulated world.28
decision making.

Machines are trained with historical data to recognize patterns • Open application programming interface (APIs)
and classify new data. Through advanced algorithms a
machine can learn patterns with new experiences to improve An open API is commonly defined as an API that uses a
its performance. However, the machine is not learning entirely common or universal language or structure to allow interface
on its own; rather, the learning process requires a significant or integration between different applications. In general, an
level of human input to make sure the data is interpreted API allows developers to use a specific software product in
correctly. various ways, for example, fitting it into third-party projects.

The open APIs allow the creation of a robust ecosystem. APIs

• Biometric technologies are enabling financial firms to offer new products to customers
by using other firms as a distribution channel. Open APIs are
Biometric technology is the science that deals with the analysis creating ease of integration, ease of connectivity, and ease of
of the physical or behavioral characteristics specific to each distribution.29
individual, allowing the authentication of his or her identity.
Biometrics means “measurement of the human body”. There
are two categories of biometric technologies: physiological
measures and behavioral measures. The examples of biometric
techniques that are now used for verification include fingerprint
scanning, voice authentication, face recognition, iris scanning,
and gait recognition.

28
https://www.oecd.org/finance/private-pensions/Financial-markets-insurance-pen-
sions-digitalisation-and-finance.pdf
29
https://www.capgemini.com/wp-content/uploads/2018/02/world-fintech-report-wf-
tr-2018.pdf

50 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 51

 3 Strategy Input

This chapter describes the main inputs used to develop the strategy.

STRATEGY INPUT The chapter is divided into three sections as follows:

• Sectoral benchmarks

• International benchmarks

• Arab countries current situation

3.1 Sectoral benchmarks

In the following part, an introduction for the sectoral benchmarks

is presented and selection criteria of a set of sectors (healthcare,
manufacturing, education, and financial services) are provided,
based on a selection methodology that will be discussed.

For each of the selected sectors, a certain scheme was followed:

1. Reasons: Why the benchmarked sector is selected

2. Impact: Some key facts about the sector and how digitization
influences it

3. Best Practices: Examples of the best practices in the sector

4. Key lessons learnt

52 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 53

 Contribution Contribution 3.1.1 Selection criteria for benchmarked sectors
in the Global in the Arab Digital Employment
Sector GDP World GDP Readiness Rate Per Sector
A detailed study is conducted in order to select priority sectors for
Financial Services 15% 12% 6% digitization in the Arab countries. The study resulted in selecting
the following sectors for the initial/pilot transformation: Healthcare,
Construction 6% 6% 3% manufacturing, financial services, and education. Of course, one
ICT 6% 3% cannot neglect some other sectors such as agriculture, which, as
2%
indicated above, plays an important role in the economies of most
Manufacturing 16% 11% 9% of the countries in the Arab region. However, the agriculture sector
does not have the potential or the ability to be digitized through its
Mining & Quarrying 5% 6% 1%
value chains and have a quick short-term impact and a strategic
Health 10% 7% 13% long-term impact.

Hospitality 3% 3% 10% The main criteria of the sectoral selection were based on the
Education 5% 5% 3% following reasons:

Arts & Entertainment 2% 1% 1% a. Their large contribution to the global GDP, with around 47% of
Wholesale & Retail 6% 6% the overall sectoral contribution.
14%

Utilities 2% 3% 2% b. The large contribution to the Arab countries’ GDP, with around
38% of the overall sectoral contribution to the Arab world GDP.
Ag, forestry & fishing 4% 5% 24%

Other 19% 31% 34% c. How digitization enhanced the outputs of each of the selected
sectors.
Figure 4 Economy Sectors, Digital Readiness and
Employment Rate d. The potential and ability (or even the existing infrastructure)
of these sectors to be digitized through their value chains and
have a quick short-term impact and a strategic long-term
impact.

e. The existing positive impact in terms of programs and initiatives

that relates to digitization in each of these sectors value chain.

54 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 55

Financial services Digitizing the financial sector in the Arab region has great potential
for the following reasons:
The financial services sector is the second major contributor to the
global GDP, comprising about 15% and around 12% of the Arab • FinTechs are not only good in developing new technologies,
world GDP. The continuing developments in telecommunications but they are good at fixing business problems thus creating a
and computing technology - whether on the global scale or the better citizen experience.
Arab world scale - have been a vital force in the transformation
of finance. They have greatly improved quality and processing • FinTechs make financial services and financial technology
speed and helped to lower information costs and other costs of accessible for the “underbanked” in the Arab countries,
transaction. These developments have had implications for both especially in countries like Yemen, Libya and Palestinian
providers and users of financial products and services. Territories which will help make small businesses more
sustainable.
The financial services sector is the highest-spending industry
in means of investment of information and communications • The transparent and real‑time operation of financial services
technology. It was the first to digitize key transaction processes innovations, such as blockchain and digital currencies, are
like electronic transfer of funds, securities trading and clearing, generating new value streams, not just in financial services
and interbank settlement. Lately, there is an effort to digitize the but across the economy.
front office, starting from traditional retail and call center activities
to fully automated online processes by which virtually every aspect • Digitized financial services unleash a new era of competition,
of retail and home banking is fully digitized. Also, the emergence innovation and job-creating productivity in many different
of smart ATMs and online banking solutions has further enhanced economies and markets across the Arab region.
convenience and service delivery efficiency.
• Arab governments, authorities, and businesses receive
But then comes the question, what is the ultimate goal of structured access to almost unlimited data. This is not
transforming such a sector? about old‑style data mining, but deep learning that permits
previously unimagined insights and information that in turn
Financial inclusion stimulated by financial technology or FinTech, allows more individualized products and services, and more
clearly illustrates the positive feedback between finance and the efficient markets and systems.
economy. It is the bridge between economic opportunity and
outcome. If people in the Arab countries gain new access to • Modernized financial services are allowing people to conduct
financial services through FinTech, they will gain opportunities to transactions through their mobile phones or tablets (digital
expand business such as e-commerce and e-learning, which are wallets), improving efficiency and customer experience.
currently hampered by constrained access to payment services.
In this manner, FinTech is expected to contribute to the Arab • Innovative financial services such as robot‑advice (which is
region economic development. Governments could also benefit already implemented in some banks in different Arab countries)
from blockchain’s transparency and security, and their relation to have the potential to extend financial advice beyond high-net-
cost savings, which can come from auditing and enforcing smart worth individuals (HNWIs) and more sophisticated investors,
contracts and avoiding fees that can be associated with other to a wider cross‑section of the community.
payment methods.

56 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 57

• All transactions will be safe and transparent. This will assist programs.31 In addition to that, numerous tax initiatives have
governments in achieving financial inclusion to ensure social been announced for the creation of a conducive business
fairness and justice, deliver support for those in need, collect environment.
required taxes systematically, and expose all economic
deviations.
Lessons learnt from financial services benchmark study

Best practices in FinTech 1. Using digital finance services to

improve financial inclusion
• Innovation hubs and regulatory frameworks are emerging Financial inclusion means the opportunity for low-income groups
as key components of governments’ efforts to support the to have affordable access to basic financial services. Inclusive
development of FinTech and help new businesses understand financial systems are important because they contribute
how existing regulation applies to their ideas. towards alleviating poverty and promoting a country’s broader
economic development. The focus on financial inclusion has
• Innovation hubs are emerging as key components of sharpened and intensified in recent years following the G20s
governments’ efforts to support the development of FinTech adoption of financial inclusion as one of its main policy goals.
and help new businesses understand how existing regulation
applies to their ideas. FinTech ecosystems have stimulated Digital financial services (DFS) provide an accessible and
technological innovation, made financial markets and systems affordable entry point into financial systems for many
more efficient, and improved the overall customer experience. unbanked and under-banked people and have consequently
Components that contribute heavily to the success of this been the focus of those developing inclusive financial systems.
ecosystem, include market, capital, government, regulation, DFS refers to the broad range of technologies available to
talent and infrastructure.30 deliver financial services from a broad range of providers to a
broad range of recipients.
• New York FinTech Innovation Lab is a concrete example of
a lab that fosters innovation in the financial sector. The lab is 2. Building consumer trust
a mentoring program, designed to help FinTech entrepreneurs In order to build consumer trust in DFS, there needs to be clear
engage with finance leaders. Companies coming out of the lab and transparent new products (newly introduced technologies)
have raised tens of millions of dollars in financing, with some disclosure. The products need to be kept simple and relevant
companies achieving substantial valuations. to users’ needs and there must be consumer education on how
to use new products as and when consumers are using the
• Access to funding at all stages is critical for FinTech’s growth products.
and development. For this purpose, a wide range of government
FinTech-specific initiatives have been developed to help FinTech 3. Developing enabling legal and regulatory frameworks
startups gain access to business loans and attract local and Financial regulators in the Arab countries must be firmly
foreign investments. UK Angel CoFund and FinTech Steering involved in both their traditional policy objectives of promoting
Group serve as key examples of the implementation of such

31
https://www.ey.com/Publication/vwLUAssets/EY-UK-FinTech-On-the-cutting-edge/%-
30
https://assets.kpmg.com/content/dam/kpmg/uk/pdf/2017/10/value-of-fintech.pdf 24FILE/EY-UK-FinTech-On-the-cutting-edge.pdf

58 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 59

 safe and efficient financial systems and promoting financial The application of smart manufacturing is expected to create USD
inclusion. In particular, regulators must develop enabling legal 1.2 to USD 3.7 trillion of value worldwide by 2025. This comes in
and regulatory frameworks, which support the use of DFS for many forms, such as:
financial inclusion. They must include new participants who
introduce innovative methods using DFS to reach the unbanked a. Operational efficiency
and under-banked countries like Syria, Yemen, and Iraq. b. Predictive and preventative maintenance
c. Supply chain management
4. Strengthening financial literacy and citizen/consumer
protection frameworks d. Inventories and logistics management
Citizen protection frameworks can be strengthened and
supported by ensuring that roll-outs of new DFS are
accompanied by sound financial literacy programs. Financial Below are the reasons why digitizing manufacturing is relevant -
literacy programs should be designed around educating the and even likely to be revolutionary - for the Arab economies:
customers at the point when they are first using the product or
service. In order to build citizen trust and retain it even in case 1. It eases current challenges and obstacles facing the Arab
of negative experiences, education should focus on the cost manufacturers: The smart manufacturing vision provides
of using the service and identifying for the citizen available recommendations on how Arab manufacturers can ease
compensation mechanisms. challenges. The digitization of the whole product lifecycle will
allow manufacturers to use data from production, service, and
social media which will lead to faster product improvements.
Manufacturing Smart items will bring stronger integration between top floors
and shop floors and thus more intelligence and flexibility to
Digital technologies can bring dramatic changes to the world of production. With these technologies, manufacturers can react
manufacturing and offer opportunities to innovate and increase faster to demand changes and implement new configurations
output (European Commission, 2015). They create new production easier or even re-plan production much faster.
technologies, new materials and new ways of storing, processing
and sharing data. New manufacturing devices, such as 3D 2. It leads to an innovation economy: Digital chains will not
printers, speed up product development cycles and make new only improve efficiency but also speed up innovations as new
collaboration processes possible. By supporting rapid prototyping business models can be implemented much faster.
and customization, with fewer errors, they enable faster access to
the market. Finally, digitization affects the way companies operate 3. It puts the Arab citizen/consumer in the center of all activities:
in a competitive environment. Today’s consumers demand individual shaping in the provision
of products and services. At the present time changes in the
Manufacturing comprises about 16% of the global GDP. It is the Arab consumer’s behavior and demand is becoming quick
first and most important major contributor to the global GDP and and diversified as never before. Smart items, products and
is a massive contributor (about 11%) to Arab GDP. The digitization machines will enable Arab manufacturers to get down to lot
of manufacturing enhances the methodology of how products are size one and produce customized products without extra cost.
designed, fabricated, used, operated, and serviced post-sale as
it enhances the operations, processes, and energy footprint of
factories and the management of manufacturing supply chains.

60 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 61

4. It puts workers in the center of production: As manufacturing • A network consisting of ten field labs has been established
facilities are becoming smarter, the work in production lines as part of Dutch smart industry initiative in order to provide
will be enriched and humanized. Simple manual tasks will practical environments for the purpose of designing, testing
disappear. Workers will become coordinators who ensure a and deployment of technological solutions. Similarly, Sweden’s
smooth production and only intervene when a machine calls “produktion2030” main activities are based on setting up a
for action. Flexibility will be a key success factor. Workers will Ph.D. school in order to provide production developing courses
be assigned where help is needed. This will be demanding at master’s level. In Germany, a network of competence
in terms of managing complexity, problem-solving and self- centers has been set up in order to raise awareness, provide
organization. At the same time, the work force will become training for business leaders and offer hands on approaches
more flexible. for testing digital transformation in allocated demonstration
factories. Some of these initiatives have attracted significant
5. It will enable sustainable prosperity: Old models of amounts of investments. In Italy, Under the Piano Nazionale
industrialization will run out. Economies and with them societies, “Industria 4.0” initiative, an investment of USD 200 million
will increasingly recognize the risks of globalization, job losses (EUR 200 million) has been made for the establishment of
and resource shortages. Generating profit and realizing growth I4.0 competence centers and an additional USD 268 million
have to be put into a more long-term perspective, for example (EUR 240 million) will be allocated for the strengthening of
by finding ways to cope with constraints on energy, resources, technological clusters “Fabbrica Intelligente” and “Agrifood”.
environment, and social and economic impacts. Digitized
manufacturing can help find solutions to these challenges. • The European Commission launched on 19 April 2016 the
If it is smart and innovative, production can reduce energy first industry-related initiative in which building on and
consumption, help manufacturers in all the Arab countries to complementing the various national initiatives for digitizing
sustain their business with existing and new business models industry, such as Industrie 4.0, Smart Industry and l’industrie
and use new technologies to produce more efficiently and du futur, the Commission will be enforced along five main
sustainably. pillars. These include use of policy instruments, financial
support, coordination and legislative powers to trigger further
public and private investments in all industrial sectors and
Best practices in digital manufacturing create the conditions for the digital industrial revolution.

The majority of governments have made industry 4.0 a priority in

order to increase productivity and competitiveness of the work- Lessons learnt from the manufacturing benchmark study
force. Government efforts are not only limited to providing support
to the manufacturer but also to encourage wider adoption of 1. Use industry 4.0 to accelerate operational improvements
technologies. Industry 4.0 comprises multiple digital technologies that
are reshaping production and facilitating the digitization of
• A network of test labs has been developed for the integration core processes. Arab governments should implement these
of enterprises, industry bodies, government, academic and technologies to accelerate the business impact of operational
labor organizations. The concrete example of this test lab improvement programs, such as lean management. In fact,
program can be found in the report “Industry 4.0 Test labs in frontrunners do not typically regard digitized manufacturing as
Australia Preparing for the Future” where government plans to a new production paradigm, but rather as a lever to maximize
create a test lab which will act as a bridge between research and accelerate the benefits of other programs. Through our
and industry partners.

62 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 63

 benchmark study, we found out that implementers most Healthcare
commonly make processes more efficient and then deploy
digitized technologies or industry 4.0 within these processes Healthcare represents about 10.4% of the global GDP and is the
to maximize performance and sustain it at a high level. third major contributor to it. Global eHealth Market is expected
to reach US$ 161.30 Billion by 2024 from US$ 31.52 Billion in
2. Integrate new and existing capabilities and technologies 2016 at CAGR of 12.68%. The healthcare digital transformation
To implement digitization in the manufacturing sector effectively, in the Arab region will create value for all stakeholders, whether
Arab governments must develop a new, nontraditional set of governments, healthcare providers, professionals, or patients. For
capabilities and integrate them with their existing ones. But the Arab governments and society, the primary benefits of digital
adding capabilities can pose challenges. To integrate new and transformation are likely to be improvements in healthcare access,
traditional capabilities, stakeholders often need to first change quality and affordability. For industry players, digitization can add
the mindset of the citizens and workers so that they are more value through enhanced revenue generation, capital efficiency,
receptive to pursuing new technologies and opportunities. cost optimization and productivity.

3. Manage information architecture as a critical enabler The question is why to implement e-health in the Arab countries?
To capture the benefits of digital technologies, stakeholders
must manage their information architecture effectively. There The advantages of the e-health services could be summed up as:
are many examples that demonstrate the critical role played by • Improved quality of care
information architecture in enabling the successful digitization • Better planning and resource allocation
adoption of manufacturing, such as integrating legacy systems,
• Cost efficiency - more efficient health landscape
migration to the cloud, and building cyber-resilience.
• Enhancing the evidence base for health service delivery and
4. Thoughtfully design the transformation roadmap policy making
Implementers must recognize that an Industry 4.0 • Real-time monitoring
transformation is a long journey that requires a systematic • Providing better, tailored and personalized services
approach. First, implementers need to understand the value
of making the change, while assessing the current state of
systems and operations. On that basis, implementers define a Implementing e-health systems through the established
fixed transformation roadmap and vision, in which they have to Table 2 strategy in the Arab countries: Examples of potential
areas for saving costs and increasing efficiency
take into consideration the need to improve existing processes
and expand capabilities along the value chain. Opportunities for reducing costs
Patient issues
and increasing efficiency
5. Approach digitized manufacturing as a change
• One-time registration
management project
• Information available on subse-
The adoption of Industry 4.0 requires a sophisticated approach
quent visits
to change management, involving many functions at a site, Patient registration
• Serves multiple purposes (e.g. vi-
and an implementation approach across multiple plants.
tal statistics registries in addition
to care)

https://www.maximizemarketresearch.com/market-report/global-ehealth-market/3243/

64 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 65

 • Improved speed and efficiency of • Combination of physical and
care delivered e-training may provide efficien-
Staff training
Creation of persistent • Information base developed for cies over the current traditional
record a wide variety of direct care and models
administrative uses • Operations and record keeping
• Data is entered once Payments efficiency
• Streamlined automatic billing, • Fraud protection
payment system • Avoiding stockouts
Payment for services Supply chain
• Documentation of billing, pay- • Fraud protection, e.g. fake med-
ment actions management
icines
• Reduction of clinic visits
• Saves time for patient
Remote diagnostics • Improved patient triage Best practices in e-health
• More efficient use of time of
skilled health workers • In countries such as Japan and China surgical robots, AIs and
• Efficient access to closest avail- machine learning techniques are assisting clinicians in a wide
Referrals range of medical diagnosis.
able resources
• Automatic messaging to public
Scheduling follow-ups • In Denmark, the “Once Only” practice used in MedCom program
and providers
was efficiently implemented to exchange data between different
• Enables real-time surveillance, actors in the healthcare system such as lab test results, blood
Disease surveillance
resource allocation group, health records, etc. Any doctor can quickly asses a new
More targeted distribution of informa- patient without having to repeat all previous tests. This can be
Public information
tion crucial in an emergency or when someone needs to be treated
Decreased need for in-person clinic abroad.
24x7 call centers • Numerous e-health initiatives by governments are focused
visits
towards extending support to health care startups. Numerous
Administration issues
best practices and initiatives were applied to these thematic
• Easier and more timely aggrega- areas: Electronic health record (EHR), telehealth, m-health,
Performance review
tion of data by factors e-learning in health, big data analytics in health and legal
• Voice and data communications framework. EHR system allows for the diagnosis and the
Staff communications
increase efficiency treatment of patients through provision of fast, extensive and
• Ability to mine data to moni- timely information at the point of care.
tor staff performance through
various filters, including at the • UK “united4health” project is aimed at providing innovative
Staff management health care services for the remote monitoring of patients
individual or aggregate level
• Ability to supervise staff in re- with chronic diseases. “Patient@Home” program is focused
al-time on providing in-home treatment for the optimization of data
systems.

66 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 67

• Cardiology centers in Georgia have reduced the need for The healthcare industry as a whole is relatively resistant to
continuous monitoring of ECG through the use of heart- change because clinicians tend to subscribe to evidence-
monitoring device to record abnormal heartbeats and based reasoning. If they cannot see exactly how a new tool
hypertensions remotely, which are then sent to the mobile or process will help them take better care of patients, they
phone via Bluetooth technology. might not believe it is worth implementing. This mindset has
been a fundamental obstacle in the digital transformation in
• Health analytics have made it possible to draw insights, make healthcare.
recommendations and provide assistance in complex decision-
making process. Big data has opened new research domains for 3. Ensure the technology fulfills its promise
the treatment of Alzheimer disease and dementia. Predictive When embarking on digital transformation, make sure the
analytics have allowed health practitioners to detect patient new technology fulfills its full potential. If not, consider
deterioration and disease in early stages. supplementing the technology with a tool to help users
navigate it more effectively. For physicians, this is the critical
• Robust legal framework plays a key role in the successful difference that ensures technology will never be an obstacle to
delivery of quality health services and generates patient trust quality care.
in e-health.
4. Make sure support is continually available
A digital initiative may have a specific start date, but the end
Lessons learnt from the healthcare benchmark study date is not as clear. It takes time for users to acclimate to
a new technology system. Therefore, learning should extend
1. Focus on training prior to implementation beyond the implementation period.
The introduction of the EHR or any other digitized technology
into the healthcare sector will be met with resistance from In healthcare, clinicians who struggle to use an EHR or a specific
clinicians because it disrupts their workflow, and the benefits of technology not only feel overwhelmed and stressed, but they
the technology will not be clear to the users. Arab governments can also contribute to coding and billing errors, resulting in
can work so long and hard with EHR vendors on implementation lower revenues and a worse patient experience.
and training, but gaps would remain. By offering continual support, one can quell resistance among
users and empower clinicians to perform at an optimal level.
As a result, before implementing any new technology,
stakeholders should allow those who will be using the tool
to become accustomed to using it.) In addition, they need to Education
provide hands-on training, clarify the purpose of the technology,
and highlight the benefits it will yield for the citizen. The role of educational technology in teaching and education
system is of utmost significance due to the advent of information
2. Embed the new technology into the sector’s culture and communication technology (ICT) in our daily lives. One
Governments and ministries of health in the Arab region can cannot deny the importance of education in the development of
design a digital transformation effort to the tee, but if the sector communities, but education also plays an important role in the
and its components do not possess a culture of innovation, the economy with a considerable 5% contribution to the global GDP
effort will be worthless. expenditure, as well as a 5% contribution to the Arab world GDP.
Education technology is the systematic and organized process of

68 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 69

applying information and communication technology to improve opportunities to learn anywhere but also offers a great deal of
the quality and efficiency of education. E-learning is one of the flexibility to non-traditional learners.
key aspects of e-education which is rapidly changing the education
landscape. The research firm Global Industry Analyst projected • The development of comprehensive national frameworks
that e-learning industry would reach USD 107 billion in 2015, and acts as a blueprint for institutional actions and will enable
it did. the integration of new modes of learning and teaching into
educational programs.
The role of ICT in education can be summarized in the following
points: • Acquiring digital skills for teaching and learning is fundamental
for the adoption of these technologies. UNESCO, in partnership
1. Develop a variety of educational services. with Cisco, Intel, International Society for Technology in
Education (ISTE) and Microsoft, has developed an ICT
competency framework for teachers detailing the competencies
2. Promote equal opportunities in the Arab region to obtain
that teachers need in order to integrate ICT into their practice
education and information. and professional development.

3. Develop a common system of collecting and disseminating • E-Campus is a five-year program, funded by the Norwegian
educational information. ministry of education, that focuses on making technology
available for the Norwegian higher education sector to make
their teaching and research better, more effective and more
4. Promote technology literacy and support distance learning in
available across organizational and geographical barriers. The
remote areas in some Arab countries. Swiss Virtual Campus (SVC) program is an eight-year targeted
initiative to promote e-learning in Swiss higher education
5. Help in improving innovative teaching skills and enhancing the institutions.
classroom teaching experience.
• The European Association of Distance Teaching Universities
(EADTU), in collaboration with the European Association
6. Act as an assisting tool for teaching and learning itself.
for Quality Assurance in Higher Education (ENQA) and the
European Foundation for Quality in E-Learning (EFQUEL),
7. Help in building some medium between teachers and students are undertaking a project to support supporting quality in
for better communication. ICT can fill the gap between teachers e-learning which seeks to promote excellence in the use of ICT
and students and play an important role in student evaluation in higher education.
in the Arab countries.
• The use of IoT in education makes the learning experience more
engaging and authentic. Educational institutions are working
Best practices in e-education
in collaboration with cultural organizations, governments
and businesses to link people, process, data, and things to
• Due to technological innovation, the education sector is
maximize the relevance of education and to provide skills to
experiencing rapid transformation. Integration of online
the next generation within the Internet of Everything (IoE)
technologies into the education sector not only provides
framework.

70 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 71

Lessons learnt from the education benchmark study for the schools on the use of ICT. These policies and procedures
should be in line with existing laws governing ICT at the
1. Improving access and equity to narrow the digital divide national level.
To narrow the digital divide, ICT in education policy should
complement other government initiatives, such as public 5. Education curriculum reform to integrate ICTs
education in ICT, donation of computers and provision of free into content
Internet access. There has been a number of changes in ICT education due
to the introduction of ICT-related educational reform. In
2. Creating ICT vision and strategy in educational entities several Asian countries, a new ICT curriculum has been made
The vision and strategy for ICT in schools should not be compulsory from primary thorough secondary school. ICT
created by a single person or through a top-down process has been integrated in the curriculum as a tool for developing
starting from ministry of education. Sometimes schools do not decision making, critical thinking and communication skills.
have their own ICT vision and plan as the ICT infrastructure
and training are generally directed and given by the ministry. 6. Ensure sustainability
The school-level vision and plan (if available) are usually Empower educational entities to look for their own funds
established by individual school principals. The school board and identify expertise to promote sustainability. Prepare and
takes all decisions on the purchase of ICT tools, a procedure disseminate guidelines on how to secure funds. The preparation
that is usually met with some resistance from the teachers as of guidelines ensures that entities with adequate financial
they do not always share the same vision as the principal or means can proceed on their own initiative, while complying
the ministry nor do they feel a sense of ownership of the plan. with existing rules and regulations.

3. Educational entities should be given some autonomy to

select ICT resources that are most suitable to the needs Wholesale and retail - commercial sector
of instructors and students
Every school or entity is different from the other and each E-commerce is considered a crucial digital sector due to the
one should be given autonomy to select ICT resources that perceived benefits it can add to the local firms on the country scale,
are most suitable to the needs of teachers and students. ICTs and the overall economy of the Arab region. It is important to note
should not be put into place just for sake of using newer or that the wholesale and retail sector has a major contribution to
latest technologies. Entities should be provided with basic the overall global GDP with 5.5%, and 6% contribution to the Arab
technology infrastructure and given the autonomy to decide on world GDP.
the kind of ICT resources and tools that they should acquire,
based on their vision and analysis of their students learning One can simply say that e-commerce causes cost reduction
needs. and improved efficiency. If implemented properly, it will lead to
lower prices for goods and services, causing Arab markets to be
4. Translate ICT policy into a set of educational more competitive. It will lead to improved efficiency, particularly
entity-level regulations and procedures in procurement by automating processes and improving the
Translate ICT in education policy and laws into a set of school- management of the procurement function.
level regulations and procedures to provide a clear blueprint

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E-commerce will allow procuring firms and individuals to purchase • 24/7 access: E-commerce enables citizens to shop or conduct
more widely and gain extra choices. It will allow selling firms to sell other transactions 24hours a day, all year round from almost
into new geographic markets and into unreachable markets that any location in any Arab country, which will make a significant
would otherwise be uneconomic to serve. increase in accessibility for the laggard countries.

Investments in digital commerce and e-trade will have a huge • Improved delivery processes: This can range from the
positive impact domestically and in the region. Domestic immediate delivery of digitized or electronic goods to the on-
investments in e-commerce will enable national IT firms to gain line tracking of the progress of packages being delivered.
technical and commercial expertise that will differentiate them
in export markets for IT services. The improved efficiency and • An environment of competition: E-commerce will eliminate
reduced costs from e-commerce will lead to a small increment monopolistic markets.
of growth in the economy and this will lead to some additional
employment, first in the IT sector, but subsequently in other • Connects citizens: Enables citizens in the Arab countries,
sectors of the economy. By its nature an e-commerce strategy both in urban and rural areas to access products, services and
is wide ranging, covering many areas of the economy. It has information.
components in technology, the law, transportation, logistics and
postal services, utilities, education, customs, financial services and • Facilitates delivery of public services
taxation, and the creative industries such as those associated with Implementing e-commerce systems through the established
developing catalogues for goods or services. E-commerce services strategy in the Arab countries can be crucial and beneficial, as
are potentially used by all sectors of the economy. it will have the following impact:

E-commerce can be a pillar of the Arab region economy. One can 1. E-commerce platforms will increase the number of Arab
summarize some of its advantages in the following: retailers that sell online within countries of the Arab region and
worldwide.
• Regional marketplace: By enabling the Arab countries
e-commerce, businesses will have access to citizens, not only 2. E-commerce will help stimulate wholesale and retail
on the regional level, but also on the global scale all around business startups.
the world, just like the case of EU. 3. It will improve citizens’ access to goods and services, and
as result, will reduce the cost of goods and services for Arab
• Operational cost saving: The commercial processes citizens.
associated costs will be significantly decreased, especially on
the long term as the costs of creating, processing, distributing, 4. The available range of goods and services will be extended
storing and retrieving paper-based information will be for citizens, especially for those in remote and rural areas.
decreased.
5. It will extend the volume and profitability of domestic retail
• Mass customization: For economies of scale, e-commerce has business across the Arab region.
revolutionized the way consumers buy goods and services. The 6. There will be an increase in the number of businesses that
processing allows for products and services to be customized use e-commerce for business to business (B2B) trading within
to the citizen’s requirements. the Arab region and worldwide.

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 7. The efficiency of operating supply chains will be increased maintenance of e-freight solutions in real business cases and
in Arab countries. pilots. Similarly, “IPC e-commerce Interconnect program”
fosters cross-border cooperation between national postal
8. If the Arabs e-commerce platforms are compatible with providers through the facilitation of tracing and tracking of
those in the EU and other global platforms, this would extend process for e-commerce stakeholders.
the reach of Arab countries in existing international markets
and reach new international markets. • “A Pan-European network of e-commerce trustmark” initiative
aims to improve the international credibility and overcome
9. The efficiency of the procurement of goods and services language barriers of national trustmark by establishing
will be increased for public and private sectors. harmonized certification criteria for all national trustmarks
across the European region. In addition to that, “European
consumer centers network” offers free consumer and support
Best practices advice to EU residents who are purchasing goods and services
from a trader based in another country. Qatar’s “Qbuy” platform
We categorized the best practices into supporting e-commerce, supports merchants and SMEs in accessing knowledge/learning
improving information and transparency, promoting interoperability, resources and provides online tools on-demand support and
enhancing customer protection and innovating delivery. funding.

• “Choice in ecommerce” is an initiative by Berlin against online • “Citylog” initiative by EU aims to increase the sustainability
trade sales and ban to ensure that e-commerce remains free and efficiency of the urban delivery of goods through an
and fair for all types of sales and retail businesses. Since SMEs integrated management and innovative vehicle and transport
are a key pillar for e-commerce, several best practices are solutions. “Rural transport program (RTP)” initiated by the Irish
targeted towards creating conducive a environment for SMEs. government provides infrastructure and services that allow
Programs such as “eStep SMEs” and “Mittelstand-Digital” rural businesses and citizens to engage in “Click and Collect”:
provide modular solutions for SMEs to incorporate e-business Collect deliveries at social facilities.
standards into their value chain as well as to provide software-
based solutions for seamless and simple export process. Key lessons learnt from wholesale and retail – commercial sector
benchmark study
• “Log4green” is a program initiated by the EU which aims to
strengthen the logistic research network at regional level by 1. Modernization of customs procedure, system is the most
providing a set of technological approaches and developing important step to hear the voices of the business community:
educational programs in the logistics and transport sector. It is important because e-commerce is not only a technical but
“European e-business support network for SMEs (eBSN)” also a cultural matter for the business community.
program creates a network for e-commerce stakeholders in
public authorities and research institutions. 2. It is essential to obtain support from international organizations
in relation to e-trade or e-commerce standard/technology
• “E-freight integrated project” offers a platform which acts
as a testbed for the design, development, deployment and

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3. Effectively use service providers: There is a wide variety of 6. Strong leadership is a critical factor in the successful
programs and services to assist companies with e-commerce. implementation of e-commerce or trade. Close inter-ministerial
Services available include e-commerce and entrepreneurship cooperation among regulatory parties is necessary.
training programs; website design and hosting; software
systems for integrating e-commerce with accounting,
shipping, and inventory management as well as business Precision Agriculture
analytics software to provide data and statistical analysis
on the company’s e-commerce activity. These services can Precision agriculture or precision farming is a modern-farm
be valuable in identifying niches, reaching customers in the management concept that makes use of digital technologies to
market, and developing an efficient production and distribution monitor and optimize agriculture production processes. Instead of
system for serving customers. applying the same amount of fertilizers over an entire agriculture
field or feeding a large animal population with an equal amount of
4. Creating an online platform is the beginning, not the end of feed, precision agriculture helps to optimize fertilizers’ use, harvest
an e-commerce strategy: Nearly all of the businesses studied time and livestock feed after monitoring various field variations
struggled with website optimization. Strategies for optimizing a using new sensor technologies, satellite navigation and positioning
website are different from those needed to create an initial site technology, as well as the Internet of Things (IoT).
and make it fully e-commerce capable. Many of the case study
businesses did not initially plan or budget for the expenses According to the World Bank, agriculture is one of the key sectors
associated with optimization. in the world economy, contributing 4% of the global GDP and
accounting for nearly 5% of the total GDP of the Arab countries.34
5. Integrate e-commerce into overall business operations: In addition to that, the global market size of precision agriculture
E-commerce is broadly defined as “using online resources and is expected to garner USD 7.8 billion by 2022, registering a CAGR
tools to do business more efficiently and productively”.33 As of 14.9% during the forecast period 2016-2022.35 The key factors
such, e-commerce holds the promise and challenge of affecting contributing to this astronomical rise in market are the growing
every aspect of a business operation from product design and adoption of smartphone use, aggrandized use of cloud technologies,
production to distribution and service delivery. booming population and rapid technological advancements.

Businesses using or considering e-commerce should investigate Precision farming promises an increase in the quality and quantity
the potential roles of the Internet in all aspects of their of agriculture produce while minimizing the use of agriculture
business. Businesses may benefit by using the information inputs (fertilizers, water, pesticides, energy etc.). The main aim
provided through e-commerce (e.g., customer characteristics, is to save cost and reduce environmental impact while producing
location, and order size and regularity) to enhance efficiencies more and better food. Moreover, the technology enables farmers
in other areas of operation. to manage their resources as well as access real time information
through their smartphones, thereby offering greater mobility and
ease of operation.

34
http://wdi.worldbank.org/table/4.2
33 35
Montgomery, 2007 https://www.alliedmarketresearch.com/precision-agriculture-market

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Some key drivers have resulted in the need to shift from traditional Impact of precision agriculture
agricultural practices to a more modern and sophisticated approach.
Precision agriculture will form a crucial part of the digital strategy
These drivers of change include: for the Arab countries as it will have environmental, social, technical
and economic impact.
• Increase in population has increased demand for food.
• Accurately applying chemicals and fertilizers only where
• Climate change has negatively impacted the crop yield. needed will reduce the potential for ground and surface water
pollution.
• Increase in cost of agriculture inputs and labor has made
farming more expensive. • Increased efficiency through accurate machinery guidance
systems can deliver quantifiable return to farmers. Accurate
• Depletion of natural resources. auto steer systems can save farmers 5-15% of the input costs
(fuel, pesticide, fertilizer)
These drivers of change have created significant opportunities for
a successful precision agriculture ecosystem. These opportunities • Precision agriculture practices contribute positively towards
include: greenhouse gases emission mitigation caused by excessive
use of fertilizers and pesticides.
• Sustainable use of resources: Improving the sustainability
of land and water through technologies that reduce chemical • Significant improvements in profitability by reducing the over-
use, improves land mapping and enhances water management. application and under-application of inputs.

• Improve productivity: This applies to productivity on the • Precision agriculture will affect job opportunities (providing
farm in terms of yields as well as increased asset management. consulting services, supporting services, specialized tools,
etc.) and agriculture structures, especially the allocation of
• Attract new investments: Given the diverse landscape and farm sizes in rural areas.
dry climate condition of most Arab countries, researchers will
be able to test out new agriculture technologies in challenging • Significant increase in farm profitability due to increase in yield
and harsh environments. and input cost reduction.

• Increase Revenues: Connected value chain will increase

the confidence in food safety and traceability thus creating Best practice:
increased value in marketplace.
• UK “Agricultural Engineering Precision Innovation Centre (Agri-
• Job creation: New jobs will be created since entrepreneurs EPI Centre)” was established by the UK government to help
and new players will join relatively new smart agriculture provide engineering and precision agriculture solutions for the
industry. Agri-Food industry. By bringing together leading organizations
in all sections of the supply chain, it will become a world-leading
center for excellence in engineering and precision agriculture

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 to benefit the livestock, arable, aquaculture and horticulture Key Lessons Learnt
sectors. It delivers research, development, demonstration and
training services. “Farm 491” is another initiative launched by • Focus: A clear vision must guide the Arab countries’ pursuits
UK that provides high-spec facilities to foster entrepreneurship, in the precision agriculture sector. It is important to work
ideas generation, and collaboration. It includes 491 hectares together across the value chain with key stakeholders to draw
of farmland for research and testing. priorities and devise regulatory frameworks that enable this
focus.
• In the US, “the yield lab” is an accelerator program that offers
support, mentorship and funding for early stage agriculture • Leadership: Strong leadership is required from industry along
technology companies. Similarly, “Farm 2050” brings together with the active participation of government, researchers,
entrepreneurs, researchers and industry to connect technology entrepreneurs and financiers. This is crucial for digitizing the
with industry. agriculture sector.

• “Agro Internet of Things” aims to boost the adoption of smart • Provide grants and tax incentives: Attract and direct
farming in Greece. By extending the existing network of IoT investments through tax incentives for investors and farmers
stations to fully cover the cultivated land and data collected in rural areas and early stage agri-startups. Apply funding
from the farms, it will expand Greek agriculture digital to support ideation through the commercialization and
innovation hub to a national level. implementation phases.

• In Canada “Agri-Innovation Program” aims to accelerate the • Partner with industry to drive real results: Industry
commercialization, adoption and demonstration of innovative leadership as well as consultations are crucial to the strategy
products, technologies, processes or services that increase and the adoption of digital technologies within the agriculture
agriculture sector competitiveness and sustainability. Crop sector. Investors within the industry need to understand the
specific programs such as advancing agriculture and grape value proposition for precision agriculture.
industry development, aim at supporting productivity through
the adoption of latest technologies focused on resource • Create mutual beneficial alliances with other countries:
management. Collaborate with countries which are considered global leaders
to develop together innovative solutions for precision farming
• Several of the EU-funded projects such as “ECHORD plus plus”, and attract international investments. For instance, India is
“SWEEPER” and “VINEROBOT” focus on the development of working on numerous research projects to drive innovation
advanced robotic solutions that will be directly deployed in the within the agricultural sector. In addition, there is a need to
field and greenhouses to make the evaluation and crop picking invest in bringing already developed precision agriculture
more efficient and less labor intensive. “IoF2020” project has solutions from overseas and adapt them to the local
developed solutions to better integrate IoT technologies into environment. i.e. Canada’s approach
agriculture processes. Meanwhile the project “FOODIE” is an
ICT platform that makes use of cloud-based infrastructure to • Attract and develop talent: Build the right skill set among
store farm data as well as inform and assist farmers in the the youth by including business and entrepreneurial skills as
decision-making process. well as strong focus on technology in the agriculture courses
at university. Moreover, set up training centers in rural areas

82 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 83

 in order to provide training to farmers on how to use latest • Create ICT vision and strategy
technologies within agriculture. This will also create awareness for all governmental and private
among them about the significant benefits in terms of entities.
profitability and productivity brought by precision agriculture.
• Educational entities should be
given some autonomy to select ICT
3.1.2 The Sectoral benchmarks and the strategy framework resources that are most suitable
to the needs of instructors and
Through the sectoral benchmark study, we conducted in-depth students.
analysis in each of the selected sectors, discussing the reasons
why we selected each one, the impact it will have, best practices • Education curriculum reform
globally, and finally the key lessons learnt. In the table below, we to integrate ICTs in content in
link the key lessons learnt with the strategy framework. order to eliminate digital and
technological illiteracy.
Lessons Learnt from Sectoral Benchmark and Digital
Table 3 • Modernization of customs
Link to Strategy Government
procedure and cross-border
Relevance to Lessons Learnt trade in order to achieve related
Strategy trade agreements between Arab
• Thoughtfully design the Countries
transformation roadmap.
• Provide continual support. A digital
Implementers must recognize that a
initiative may have a specific start
digital transformation in any sector
date, but the end date may not
is a long journey that requires a
be as clear. It takes time for users
systematic approach.
to acclimate to a new technology
system. Therefore, learning should
• Regulators in the Arab countries
extend beyond the implementation
must be involved in both their
period
Digital traditional policy objectives of
Foundation promoting safe and efficient digital
systems and promoting digitization • Use digital finance services to
into sectors. improve financial inclusion.

• Focus on human capital Digital • Using digital finance services

qualifications and training prior Business and FinTechs to attract SMEs
to implementation and reach out to different social
classes to enhance financial
• Embed the new technology into the inclusion.
organization’s culture.

84 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 85

 • Effectively use service providers:
There is a wide variety of programs • Manage information architecture as a
and services to assist companies critical enabler.
with e-commerce. Services Digital
available include e-commerce Innovation • Integrate new and existing
and entrepreneurship training capabilities and technologies
programs; website design and by transforming old models to
hosting; software systems for modern and digitized ones.
integrating e-commerce with
accounting, shipping, and inventory
3.2 International benchmarks
management; and business analytics
software to provide data and
statistical analysis on the company’s • Selection criteria for benchmarked countries
The selection of benchmark countries was based on two
e-commerce activity. These services
factors: state and rate of digital evolution. These two fac-
Digital can be valuable in identifying
tors make up the digital evolution index (DEI).36 DEI is a
Business niches, reaching customers in the data-driven holistic evaluation of the progress of the digital
market, and developing an efficient economy across 60 countries, combining more than 100 dif-
production and distribution system ferent indicators across four key drivers:
for serving customers.
• Supply conditions: Internet access and infrastructure
• Integrate e-commerce into overall
business operations: E-commerce • Demand conditions: Consumer demand for digital
holds the promise and challenge of technologies
affecting every aspect of a business
operation from product design and • Institutional environment: Government policies, laws and
production to distribution and service resources
delivery.
• Innovation and change: Investments in R&D and digital
• Use industry 4.0 to accelerate startups, etc.
operational improvements.

• Develop financial literacy and

Digital citizen/consumer protection
Citizen frameworks in order to achieve
financial inclusion.

36
The Fletcher School at Tufts University and Mastercard published the Digital Evolution
Index (DEI) in 2017.

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 The DEI framework segments the 60 countries into stand outs, Covering case studies from each of the first three segments was
stall outs, break outs and watch outs. important for the diversity and inclusivity of the learnt lessons that
would help in setting the strategy. The best practices in each of the
Stand out countries are both highly digitally advanced and show countries are reflected in the proposed programs and initiatives.
high momentum of digital evolution. Stall out countries show a The chosen case studies are as follows:
high state of digital advancement while exhibiting slowing pace.
Break out countries are low-scoring in their current states of • EU: The choice of the EU benchmark is to reflect a regional
digitization but are evolving fast and have the potential to become strategy incorporating a set of heterogeneous countries,
the stand out countries of the future. Finally, watch out countries demonstrating how each country could benefit and help other
face critical challenges with their low state of digital advancement countries in reaping the gains of digitization.
and low pace of digitization
• China: The second largest economy in the world. The country
DEI score is also leading the pack of the break out countries. China was
79
Sweden Norway
Finland
chosen in light of its emphasis, in its five-year plan, on the

T
ST
Switzerland

U
Singapore creation of an Internet silk road between China and the Arab

O
74 Hong Kong

A
Denmark S. Korea

LL

D
UK
Australia Canada USA

AN
O
New Zealand
countries. Arab countries could reap great economic benefits

ST
Japan

T
69 Ireland
Netherlands Germany T BR
Belgium O
U EA from stronger collaboration with China, a market of great
Austria Estonia UAE H K
64 France C O
U potential.
Israel AT T
W
59 Spain Czech Rep Portugal
Slovenia Malaysia
Latvia Saudi Arabia • USA: The largest economy of the world and its digital economy
54 Slovak Republic Hungary Chile
Italy Poland has been growing at triple the pace of the GDP.37 USA falls in
Turkey China
Greece
49 Thailand
Bulgaria
Jordan the stall out segment according to DEI.
Russia
Singapore Mexico Colombia
44 Brazil Indonesia
Peru
Vietnam Philippines • Singapore: One of the leading digital economies in the world
Morocco Kenya
39 and falls in the stand out segment
Egypt
Pakistan Nigeria India
34 Algeria
Cameroon
Bolivia
Bangladesh • Malaysia: Following the momentum of China in its digital
29
evolution and has the potential to become one of the stand
Slow moving countries Steadily advancing countries Rapidly advancing countries
out countries of the future. Also, it is an Islamic country with
Source: Digital Evolution Index 2017, a remarkable success story in terms of digital transformation.
The Fletcher School at Tuffs University and MasterCard Reflections from such an experience will be quite beneficial for
Figure 5 Arab countries in designing their digital strategies.
Digital Evolution Index (DEI) and Selected
Benchmarks
• South Africa: Despite its place in the watch out group, South
Africa is an interesting case because it has fallen from a break
out country in the previous DEI to a watch out country in the
recent one.

37
https://www.bloomberg.com/news/articles/2018-03-15/digital-economy-has-been-grow-
ing-at-triple-the-pace-of-u-s-gdp

88 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 89

Lessons learnt in the areas of ICT and engineering domain. Significant emphasis
has been placed by these authorities on the creation of exciting
Digital foundation: Responsible authorities, infrastructure, growth opportunities while focusing on talent, research, innovation
policies and regulations act as key pillars for achieving and enterprise.
digital innovation
Malaysia: Collaborative efforts between Malaysia Digital Economy
China: Developing a comprehensive broadband strategy has Corporation and government have played a major role in the
been at the core of China’s digital infrastructure plan. “Broadband transformation of Malaysia’s public sector. Their efforts are focused
China”38 strategy is based on the principles of combining effective on driving the nation’s digital economy through investment,
planning and development of application services to trigger creation of digital ecosystem and nurturing talents with advance
industrial innovation in different economic sectors. It will not only ICT skills.
improve the broadband penetration rate through the adoption of
disruptive 5G technologies in rural and urban areas but will also South Africa: South Africa is characterized by a strong regulatory
enhance the information security thus mitigating security threats environment and has laid down a set of policies and legislations
significantly. which focus extensively on regulating the ICT sector. Public Service
Corporate Governance of ICT Policy Framework was implemented
Also, the Belt and Road International Cooperation Forum in Beijing, in 2012 to promote the governance of ICT as an essential part of
proposed to promote the big data, cloud computing, smart city corporate governance and to overcome challenges presented by
construction, connected to the twenty-first century digital silk road hyper connected digital world. South Africa Connect40 is a national
to further enrich the connotation of the initiative and to conclude broadband policy and strategy developed to increase the digital
that the One Belt One Road (OBOR) Initiative went Digital! connectivity of the government, business and citizens and to
increase the access and affordability of broadband at all levels.
USA: A wide set of initiatives has been put forward by USA for the
promotion and upgrading of the country’s digital infrastructure. Additionally, several electronic communications and broadcasting
“Broadband USA”39 program is one such example which expands organizational acts are passed to provide for the facilitation and
broadband excess by holding regional workshops that bring local regulation of the electronic communications and transactions, the
stakeholders together and provides solutions. guides and tools. It development of national e-strategy for the country, and provide for
serves as a funding guide to support broadband planning, public human resource development in electronic transactions. Some of
access, digital literacy, adoption and deployment. the examples include Electronic Communications and Transactions
Act, 2002, Former States Broadcasting Reorganization Act, 1996,
Singapore: Several government agencies in Singapore such as the Broadband Infraco Act, No. 33 of 2007.
Info-communications Media Development Authority of Singapore
(IMDA) and the Government Technology Agency (GovTech) provide
key platforms and solutions to aid Singapore in its quest towards
achieving Smart Nations status and improve government potential

38
https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=6623497
39 40
https://broadbandusa.ntia.doc.gov. https://www.gov.za/welcome-official-south-african-government-online-site

90 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 91

Digital ecosystem of disruptive technologies acts supervisory expectations. In addition to that EU FinTech Lab is
as a catalyst for digital economy by creating ICT acting as a testbed for FinTech products and services including
enabled environment distributed ledger technologies, cloud technologies, machine
learning and application programming interfaces.
Malaysia: In Malaysia various strategies and frameworks have
been established to consolidate the collective efforts of various Similarly, the EU plans to introduce technological innovation in the
stakeholders for the wide adoption of these technologies in education sector in order to make better use of digital technologies
different sectors and to transform Malaysia into a premier regional for teaching and learning; improving the education through data
hub for IoT development and big data analytics solutions. Digital analysis and foresight. We should keep in mind that Europe’s
Malaysia 35441roadmap lays down an integrated approach and Digital Education Action plan outlines key initiatives to achieve
strategy to build comprehensive ICT ecosystem which enables these objectives through the collective efforts of member states,
ICT environment, fosters innovation within the sub-sectors and stakeholders and society.
bring significant benefits to entrepreneurs, youth and SMEs. In
order to create and sustain this digital ecosystem of innovation Innovation in the e-health sector delivers citizen-centric healthcare,
Malaysia Digital Economy Corporation (MDEC) has identified big facilitates socio-economic inclusion and equality and provides
data analytics (BDA), IoT, e-commerce, data centers and clouds wider access to information and services. To deliver these promises
as the key focus areas. Malaysia’s National E-Commerce Strategic is quite a challenge in itself. That is why the EU has devised an
Roadmap includes six core areas that cover the end-to-end E-health Action Plan (2012-2020) to achieve wider interoperability
spectrum of e-commerce value chain and possess the potential to of e-health services as well as support research and development
double e-commerce growth in the country. Similarly, Malaysia’s IoT in the e-health sector.
Strategic Roadmap42 acts as a lever of economic growth through
the proliferation and industrialization of IoT. China: China has a vision to emerge as a world manufacturing
power in the next three decades. The initiative Made in China
Sectoral innovation plays a crucial role in digital 202543 is a ten-year action plan based on the concept of Germany’s
transformation by disrupting traditional business Industry 4.0 and aims to develop competency and boost cutting-
models and creating new ones edge innovation in manufacturing sector.

EU: EU has developed several action plans to drive sectoral

innovation. For instance, FinTech action plan offers supportive Digital government strategy is a key enabler for the
measures to help introduce FinTech solutions and proactive development of the digital economy agenda
measures to foster innovation, competitiveness and integrity
within the European financial sector. FinTech facilitators or China: E-government in China started with a series of
regulatory sandboxes provide general guidance to firms during “informatization” plans. Golden Projects (GP) and Government
the authorization process. This enables such firms to gain quicker Online Project (GOP) are the core of this plan. Golden projects
access to the market and better understand the rules and comprise a fundamental plan to develop a national information
infrastructure. The primary objective of the GOP is to encourage

41
https://www.patentagentip.com/malaysia_digital_roadmap.html
42 43
http://www.mimos.my/iot/National_IoT_Strategic_Roadmap_Summary.pdf https://gbtimes.com/made-china-2025-plan-unveiled-boost-manufacturing

92 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 93

office automation via government websites in order to cut down Malaysia: The Malaysian government has developed a framework
on excessive bureaucracy. A total of 12 projects were undertaken to map its path for the transformation of government sector into
under China’s GPs with their scope varying from automating e-government. The framework was developed based on the vision
internal processes to creating interactive websites allowing online of where the Malaysian public sector intends to be in the future,
transactions. Similarly, the GOPs was based on the strategy to an assessment of the public sector’s current business and ICT
create a centrally accessible administrative framework assisting environment and also research and benchmarking on international
top government officials to depend more heavily on the Internet best practices. The following is a set of identified and prioritized
and other technologies to enhance productivity and transparency ICT initiatives based on strategic intent and directions:
of the central and local governments in China.
• Enhancement of service delivery through online services and
USA: The US Digital Government Strategy44 aims to accomplish applications.
three things:
• Enhacement of capacity and capability by establishing ICT
• Enable the American people and an increasingly mobile skills framework.
workforce to access high-quality digital government information
and services anywhere, anytime, on any device. • Enhancement of performance measurement capability through
realtime public sector service intelligence and self assesment
• Ensure that as the government adjusts to this new digital tools.
world, opportunities are seized to procure and manage devices,
applications, and data in smart, secure and affordable ways. • Connected government through knowledge management
hubs and registries.
• Unlock the power of government data to spur innovation across
the American nation and improve the quality of services for the • Sustainable and resilient ICT through the implementation and
American people. deployment of government integrated telecommunication
Network, data centres and mobile based solutions and
Singapore: Singapore aims to become a leading digital economy. applications.
In order to achieve this objective Smart Nation initiative45 acts
as a strategic roadmap for the country’s digital transformation. South Africa: South Africa has launched its national e-strategy
Projects falling under the Smart Nation initiative were based on and the e-government strategy to lead the country’s digital
the principles of improving citizens’ lives through smart mobility, transformation efforts. E-government strategic framework involves
national digital Identity and e-payment solutions. Thus, the the establishment of co-ordination mechanisms, upgrading of the
government has released the digital economy framework for government network and integration of different legacy systems.
action to form a web of business and employees who fully harness In contrast the national e-strategy aims to achieve key strategic
and utilize the new digital technologies. Under this framework, objectives including the identification of ICT skills gap in the
three key priorities have been identified to accelerate digitization country, integration of technology within the government and
of industries and business, creating an ICT-enabled ecosystem and business sectors, creation of policy and regulatory environment to
to trigger sectoral innovation. support SMEs and to mitigate cybersecurity threats and challenges.

44
https://obamawhitehouse.archives.gov/participate/united-states-digital-service
45
https://www.smartnation.sg

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Digital skills form the basis and the stepping stone specialization, have been created and made available. In the
for wide scale adoption of digital technologies field of digital cultural heritage, a number of EU projects have
also received funding. With the aim of digitalizing EU industry,
EU: The EU has realized the strategic importance of digital skill the European Commission seeks, amongst other things, to
for sustaining jobs, growth and competitiveness. In this regard it invest USD$ 560 million (Euro 500 million) in a Pan-EU network
has developed the New Skills agenda to assist member states in of digital innovation hubs (centers of excellence in technology),
their national reforms by improving the quality and relevance of where businesses can obtain advice and test digital innovations.
skills formation. Moreover, under the Education and Training 2020 In addition, the European Fund for Strategic Investments (EFSI)
program concrete measures will be taken to bring digital skills and can finance digital projects and businesses in a number of areas.
competences to all levels of education and training, supporting
teachers and educators and promoting active involvement of
business and other organizations. Digital Opportunity Traineeships Creation of a digital single market as a lever to break
is another EU-funded training initiative which aims to help down barriers to cross-border online activity, allowing
companies fill vacancies with digitally-competent candidates. a free movement of goods, people and services
Digital Opportunity trainees strengthen their ICT-specific skills
through work experience in fields such as cybersecurity, big EU: In order to achieve the objectives of the Digital Single Market
data, quantum technology and machine learning. They also boost strategy, a legal framework, has been built and adopted. In addition,
their digital skills in areas like web design, digital marketing, and roles of different institutions and related authorities were defined,
software development. and different stakeholders were involved in the digital transformation
process. These institutions and bodies include: Committee on
USA: The US has always been at the forefront of digital skill industry, research and energy, communications networks and
development and has rolled out plans to achieve digital literacy. content and technology (CNECT). A set of legislations and policies
It has developed a Digital Literacy Portal46 serving as a valuable have been adopted by the EU to promote the development and
resource by offering digital literacy training and services accessible dissemination of the new information technologies, introducing a
to all age groups at all stages of learning. Similarly, Computer battery of rules to ensure that customers and businesses have fair
Science For All initiative aims to enhance ICT skills across the and affordable access to networks and services, and to remove
country by increasing access to K-12 computer science by training barriers to competition. Under the 2017 resolution on building
teachers, expanding access to high-quality instructional materials, blocks for a post-2020 EU cohesion policy, the Parliament points
and building effective regional partnerships. out that the digital agenda, including the provision of the necessary
infrastructure and advanced technological solutions, must be a
priority within the framework of the cohesion policy, particularly in
Finance and capital are considered the main pillars the next EU funding period (starting in 2020). Various trans-border
in the framework of digitization networks have been formed to promote inter-regional and inter-
city cooperation to tackle ICT challenges at the European level.
EU: In the EU, in order to achieve the goals of the EU digital agenda The communication opportunities provided by new ICTs are vital
and the digital single market, various EU funding opportunities, to maintaining these forms of cooperation. However, this can only
in the fields of research, broadband technology, ICT and smart be made possible if a solid framework is developed and a set of
institutions ensure the implementation of such a framework. These
institutions also act as important stakeholders in the digitization
46
https://digitalliteracy.gov/ process.

96 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 97

Creation of special economic zone to encourage E-government strategy is a key
economic activity Digital Government enabler for the development of
the digital economy agenda.
Malaysia: Malaysia has emerged into a flourishing dynamic ICT hub,
Digital literacy forms the basis
enabling it to host more than 900 multinationals, foreign-owned
and the stepping stone for
and home-grown Malaysian companies centered on multimedia Digital Skills
wide scale adoption of digital
and communications products, solutions, services and research
technologies.
and development. A comprehensive roadmap consisting of three
phases has been developed for the transformation of Malaysia from For digital transformation
a Global ICT HUB into a knowledge-based society, hence leading to to occur finance and budget
Financing and Capital
the birth of Digital Malaysia. need to be assigned based on
measuring outcomes.
Creation of Digital Single
International benchmarks and strategy framework Market as a lever to break
down barriers to cross-border
Digital Single Market
Many lessons were selected from the international benchmark and online activity, allowing a free
used as an input into the strategy. We have grouped the 25 lessons movement of goods, people and
learnt from the above-mentioned countries into eight lessons services.
according to their strategic relevance to our proposed framework Creation of special economic
and strategy. Creation of Economic Zones zone to encourage economic
activity.
The Lessons Learnt from The International
Table 4 Benchmark and their Link to The Strategy

Relevance to the Lessons Learnt 3.3 Arab countries current situation: Analysis
Strategy
Responsible authorities, Arab countries national digital strategies:
infrastructure, policies and Opportunities and challenges
Digital foundation
regulations act as key pillars for
achieving digital innovation. The Arab countries acknowledge the importance of developing
Disruptive technologies act as national digital strategies (NDSs) to build an information society
a catalyst for digital economy linked to socioeconomic development and attaining the SDGs.
Digital Ecosystem
by creating ICT-enabled Hence, many Arab countries launched NDSs in the hope of making
environment. progress towards the use of digitization opportunities, boosting
Sectoral innovation plays countries’ competitiveness, economic growth and social well-
a crucial role in digital being. However, disruptive technologies pose many opportunities
Sectoral Innovation transformation by disrupting and challenges that need to be addressed.
traditional business models and
creating new ones.

98 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 99

This section provides an overview of the current state of the Somalia X
national digital strategies in Arab countries. It also presents the
Iraq “conflict-affected” X
Arab countries’ priorities for developing the digital economy and
society. Syria “conflict-affected” X
Yemen “conflict-affected” X
Arab countries: Available national digital strategies
Of the 22 Arab countries, only 14 have NDSs, plans or programs. Notes: √ = available NDS - X= unavailable NDS.
Some NDSs are standalone strategies, while the remaining ones Arab countries: Digital policy objectives
are a component of a broader national strategy (a national
innovation strategy). Policy objectives for the development of the digital economy and
society which are largely pursued by NDSs are a high priority
Arab Countries’ National Digital Strategies, across all Arab countries. Priority policy objectives are highlighted
Table 5 Plans or Programs below.

National Digital Promote the ICT sector

Economy
Strategies47 The first objective in all Arab national digital strategies is increasing
Bahrain √ support for the ICT sector, typically in the areas of research and
Kuwait √ development, promotion of standards, venture capital investments,
foreign direct investment, and export of ICT goods and services.
Oman √
For example, Egypt’s national digital strategy aims to attract
Qatar √ investments to expand existing ICT companies and generate job
Saudi Arabia √ opportunities.
UAE √
Improve ICT infrastructure and broadband capacity
Algeria √
Improving ICT infrastructure and broadband capacity is achieved
Djibouti √ by developing national telecommunication infrastructure and
Egypt √ services. The main objectives are to increase broadband capacity
Jordan √ and speed, increase broadband coverage to better connect
remote areas and improve the resilience of existing broadband
Lebanon √
infrastructure. Further objectives include expanding mobile
Morocco √
broadband and allocating spectrum efficiently.
Tunisia √
Libya √ Strengthen e-government services
Mauritania X This includes enhanced access to public sector information and
data (open government data), strengthen trust in the digital
Sudan X
economy (digital identities, privacy and security).
West Bank and Gaza X
Comoros X

47
Source: Compiled by the author from the World Bank Doing Business 2019.

100 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 101
Arab countries employ web-based or mobile applications to measures include promoting a higher participation of young women
strengthen government responsiveness and citizens’ trust- such and women returnees in the ICT workforce.
as the Handasah mobile application and the Rassed system in
the UAE; the TALABI mobile application in Morocco; the Smart Advance cybersecurity measures
Traveler mobile customs application in Tunisia; and the Kollona Public information on cyber-risk and measures to combat
Amn application in Saudi Arabia. cybercrime appear frequently in Arab national digital economy
strategies.
Promote ICT adoption in education,
health care and transport Arab countries: NDSs governance
Many Arab digital strategies aim to promote the adoption of digital The lead on strategy development is often taken by a ministry or
technologies and the Internet in key sectors of society. For example, body that is not dedicated to digital affairs, while only a minority
promoting ICT adoption in education ranks high among Arab digital of Arab countries so far is giving this responsibility to a ministry
strategies. The aim is to capitalize on the digital revolution to or entity that is dedicated to digital affairs. Almost all Arab
improve the effectiveness of the education system and ensure the countries engage multiple private stakeholders and public bodies
development of basic and advanced ICT skills. Measures range from to contribute input to developing their NDSs.
a focus on infrastructure (better connecting education institutions,
for example) to promoting ICT-related curricula, teacher training In most Arab countries, the implementation of the NDS is the
and online learning environments (massive open online course, for responsibility of several ministries, bodies or institutions. In some
example). E-health care measures focus on ensuring high-quality countries, multiple stakeholders are involved in implementing it.
broadband connectivity across the health-care system. Bodies responsible for monitoring the implementation of the NDS
tend to be the same as those which lead the development and the
Increase e-inclusion coordination of the NDS.
The promotion of ICT adoption by households and individuals aims
to advance social policy objectives. E-inclusion requires expanding Many Arab governments have set up measurable targets within
broadband access to underserved areas, increasing the level of a specific time frame to monitor the implementation of their
digital literacy and raising awareness about risks and opportunities NDSs. Targets were set up for measuring progress in broadband
online. infrastructure development and performance, public sector
services and performance, use of digital technologies and ICT skills
Enhance financial inclusion development.
Rapid technological changes are fostering financial inclusion
(expansion of the number of low-income people accessing and Arab countries performance on SDGs
using financial services). This plays an important role in alleviating The following two figures show the Arab countries performance
poverty and promoting economic growth. In 2017, the Global on SDGs based on the SDG Index. The SDG Index is produced
Findex Survey found that the Arab countries have the lowest by the Sustainable Development Solutions Network (SDSN) and
financial inclusion in the world. the Bertelsmann Stiftung and presents a revised and updated
assessment of countries’ distance to achieving the SDGs. The
Develop digital skills and jobs two figures present detailed SDG dashboards to help identify
All Arab digital strategies recognize that improving skills and implementation priorities for the SDGs.
competencies is a means to further e-inclusion. Developing skills
and competencies is essential for the digital economy. Other

102 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 103
 Affordable and clean

Affordable and clean

Industry innovation

Industry innovation
strong institutions

strong institutions
Peace, justice and

Peace, justice and

and infrastructure

and infrastructure
Quality Education

Quality Education
Sustainable cities

Sustainable cities
consumption and

consumption and
and communities

and communities
economic growth

economic growth
Decent work and

Decent work and

Good Health and

Good Health and

Life below water

Life below water

Clean water and

Clean water and

Gender Equality

Gender Equality
Cultivate action

Cultivate action
Partnership for

Partnership for
Zero Hunger

Zero Hunger
Responsible

Responsible
Life on land

Life on land
inequalities

inequalities
No Poverty

No Poverty
production

production
well being

well being
sanitation

sanitation
Reduced

Reduced
the goal

the goal
energy

energy
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Algeria
Algeria          ••  ••     
Bahrain
Bahrain •• ••        ••  ••     ••
Comoros

Djibouti
Comoros          ••  ••     
Egypt
Djibouti          ••  ••     
Iraq Egypt          ••  ••     
Jordan Iraq    ••      ••  ••     
Kuwait
Jordan          ••  ••     
Lebanon
Kuwait ••         ••  ••     ••
Libya

Mauritania
Lebanon          ••  ••     
Morocco
Libya ••   ••      ••  ••     
Oman Mauritania          ••  ••     
Qatar Morocco          ••  ••     
Saudi Arabia
Oman ••         ••  ••     ••
Somalia
Qatar •• ••        ••  ••     ••
Palestine

Sudan
Saudi Arabia ••         ••  ••     ••
Syrian Arab Somalia    ••      ••  ••     
Republic
Tunisia Palestine  ••       •• •• •• •• •• •• •• •• 
UAE Sudan  •• ••       ••  ••     
Yemen Syrian Arab
Republic ••         ••  ••     
SDG achieved Challenges remain Significant challenges remain Tunisia          ••  ••     ••
Major challenges remain Data not available
UAE ••         ••  ••     ••
Figure 6 SDG Dashboard for the Middle East and North Africa48
Yemen ••         ••  ••     
 On track or maintaining SDG achievement  Moderately increasing
48
https://s3.amazonaws.com/sustainabledevelopment.report/2019/2019_arab_region_in-  Stagnating  Decreasing •• Data not available
dex_and_dashboards.pdf
Figure 7 SDG Dashboard for Arab Countries

104 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 105
 4 Strategy Development

Developing The 4.0 Dimensions, themes and initiatives

Arab Vision For The In the previous section we conducted an in depth and comprehensive
analysis of sectoral and international benchmark studies and

Digital Economy identified the key lessons learnt. These lessons reaffirmed the
importance of four strategy layers namely: Digital foundation,
digital ecosystem of innovation, sectoral usage and end user. The
lessons provided us with strategic insights that guided the framing
of the digital economy strategy. They stressed the importance
of building digital foundations through the development of
infrastructure, defining the role of responsible authorities, and
the alignment of national transformation plans with national and
regional policies and regulations. In addition, they highlighted the
fact that the integration of digital technologies within the sectors,
creates an ICT-enabled environment which fosters innovation and
leads to newer and disruptive business models. Furthermore, in
order to create a truly inclusive and digital economy, it is essential
to make digital technologies universally accessible and affordable
to all citizens.

Based on our examination of the benchmarks, we have identified

five strategy dimensions and associated key success factors for
achieving sustainable, inclusive and secure digital future for the
Arab countries.

From the four layers stated above, we have identified five

dimensions to be considered in the agenda building exercise.

Morocco Mauritania Algeria Tunisia Libya Egypt Sudan

Palestine Lebanon Syria Jordan Saudi Arabia Yemen Djibouti Somal Iraq
Iran Kuwait Bahrain UAE Qatar Comoros Oman Afghanistan

106 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 107
 • Maximizing the inclusion, affordability and accessibility of
End Users
the end users: This requires better harmonization of the cost
Citizens / Individuals and the performance of network in addition to better content
development.

• Creating the right environment of innovation that allows the

ITC companies/ startups to develop new technologies and
applications in different sectors: This requires developing our
Digital Economy / Sectorial Usage own Silicon Valley for all the Arab countries, a hub of innovation
and creation of values adapted to the Arab context as well as
Government Business trust-worthy infrastructures and content services.
• Creating the right technical foundations for digital networks
and services to flourish

• Bringing down legal barriers within Arab countries to maximize

digital transactions: This is supported by the right regulatory
Digital Ecosystem of Innovation /
conditions for innovation, investment, fair competition and a
Catalysts of Digital Economy
level playing field.
Innovation
5 Dimensions

Foundations
Digital Dgital Digital Digital Digital
Foundation Foundation Innovation Government Business Citizen
15 Themes

Infrastructure
Policies & Service Inclusion
Contribution of
Regulations Ecosystem of Delivery Affordability
Figure 8 The Digital Strategy Five Dimensions digital in GDP
Human Capital Innovation Open Data Accessibility
SMEs
Skills Governance Citizen Welfare Adoption
Funding
Five strategic directions are linked to the above five dimensions as
indicated below: 20 Strategic Objectives

• Increasing the digitization of the business/sectors and the

50 Programs
contribution of digital economy to the GDP.

108 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 109
 The defined strategy is summarized as below: Strategic
Dimensions Themes Programs
Onbjectives
The Five Dimensions,
Table 6 Strategic Objectives and Programs 19. Arab Digital Innovation
7. Creating Agency
Strategic Environment
Dimensions Themes Programs 20. Develop a Registry of
Onbjectives which fosters Experts and innovators
innovation within
1. National Broadband Plan 21. Arab Tech Universities
2. Digital Ecosystem of a community
2. Arab Datacenter and Cloud Alliances
service program. Innovation Innovation 8. Building
1. Developing the Innovation 22. Create World Class
Telecomunication 3. Internet Exchange Points Innovation Hubs
Capacity
Infastracture (IXPs) development
Infrastracture program 9. Promote the 23. Recognise and Reward ICT
2. Enhancing innovation Innovators
4. Internet of Thngs and
the Internet 24. Arab Innovation Forum
Machine to Machine
Ecosystem
Communication Program 25. Promote eGov Initiatives
5. Arab Cybersecurity (Guidance, Policy,
10. Government
Development recommendations...)
Online Services
6. Digital Transformation Service Delivery 26. E-ID
11. Increase inter-
3. Implementing Framework
Government 27. e-Procurement Program
Policies and Regulations and 7. Intellectual Property interaction
Protection 28. Develop Regional Single
Regulations Policies for Digital
Window (Customs & Trade)
Economy 8. Data Protection Framework
9. Cybercrime Legislation 12. Build Public
Data Content as
10. Partnering with universities Open Data 29. Open Data Program
Economic Growth
1. Digital to develop relevent ICT driver
Foundation curricula 3. Digital
4. Enhance Governance 30. Arab-wide platform for
11. ICT Vocational Training /
Human Capital ICT Skills & digital higher education
ICT skill accelator
Skills Competences at 13. Enhance citizen (e-university)
12. e-learning Program / Skills
different levels Education by ICT 31. Platform Peer to Peer
Citizen
usage learning
13. ICT Training Programs for
SMEs 14. Foster cross- 32. Create Arab ICT
Citizen Welfare border Scholarship Program
14. Attracting FDI in ICT: EU, healthcare,
5. Ensuring fund World Bank health security, 33. Innovative Technologies
Funding for High-tech Classroom
availability 15. Crowdfunding Plateform soliditary and
equity (ITHTC)
16. Network of Digital Angles
34. Plateform For
17. Develop a new
Telemedecine Program
organization for ARAB
6. Establishing DIGITAL UNION
Digital 18. Partnership with
Governance
Governance specialized independent
Bodies exiting Arab bodies
and build new ones to
implement the strategy

110 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 111
 Strategic
Dimensions Themes Programs
Onbjectives
35. Develop e-Trade Platform
Management
36. Create a Pan-Arab Cross-

Contribution of
15. Open Market for
more additional
economic growth
border Fintech Regulatory
Sandbox
37. Smart Manufacturing
Digital Foundations
digital in GDP 16. Increase Testbeds
I N F R A S T R U C T U R E
the Digital
4. Digital 38. Smart Factory
employment
Business 39. Smart Agri-food
Accelerator
40. Arab Telework Platform
41. SMEs Go Digital Program
17. Increase the 42. The 100,000 SMEs Online
SMEs Adoption of ICT Program
by SMEs 43. Arab Open Solution
Platform
44. Digital Content Program
45. New Generation of
18. Ensure inclusive Telespace for Isolated
and equal Communities
Adoption / access to digital
technology 46. Provide free access to
Inclusion /
wireless Internet
Accessibility 19. Enhancing Digital
5. Digital Literacy and 47. Basic level of ICT
Citizen Social Inclusion competence
48. Promote Daily lifestyle
Apps Program
49. Social Coverage Incentives
20. Enhance the
Affordability Fixed broadband 50. Develop a legal framework
Internet tariffs to promote healthy ICT
competition

112 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 113
4.1 Digital foundation Utilization cybersecurity and data protection frameworks will
ensure that the telecommunications and data infrastructure are
continuously protected against all cyberattacks and crimes. Such
4.1.1 Key success factors safe environment is vital for a thriving digital economy.

Key success factor 4: Establish and maintain policies and

Key success factor 1: Contribution to SDG and sustainability regulations creating a stable and sustainable ecosystem for
Investment in infrastructure and human capital is a fundamental digital economy
component of economic development, and it is a way to achieve Digital economy requires full support and political will at the
the SDGs, especially SDG 9: “Build resilient infrastructure, promote highest level in any country. It requires policies that encourage
sustainable industrialization and foster innovation”. A regional private sector participation in developing the infrastructure and
successful partnership between the Arab countries to achieve similar utilizing the latest technology to provide applications and services
goals is another way to achieve the SDGs, as according to SDG 17 used in operating digital economies.
“Revitalize the global partnership for sustainable development”, a
successful sustainable development agenda requires partnerships The states should establish regulatory bodies to monitor and
between governments, the private sector and civil society. facilitate the establishment of service providers essential for the
digital economy. Regulators shall maintain a balanced, competitive
Key success factor 2: Continuous development of digital and fair market protecting all players through establishing a
telecommunications networks sustainable healthy ecosystem.
Digital economy cannot exist without the provision of advanced
and complete digital telecommunication networks providing access As the Arab states stand at different positions in respect to the
capabilities to all the players in any country. The development of required laws to achieve the above goals, legislations are urgently
such networks, the main part of the infrastructure necessary to give needed to establish all the required regulators and the laws
access and communication to all stakeholders in any economy, is a providing the framework and executive orders necessary to digitize
continuous process to ensure the adoption of the latest technology the economy. Specialized plans will be required for each state to
in supporting the digital economy. Such a development will vary provide a complete set of the necessary transformation policies
depending on the network status in each country. Goals and time and regulations.
plan of network development shall be carefully crafted in order to
reach the desired targets. Key success factor 5: Strategic governance
Good governance is an enabler not a burden. Governance, if
Key success factor 3: Promotion of Internet services and established correctly, ensures the strategic intentions of the Arab
communication platforms Governments are met through information management, projects,
Internet is an essential element for the digital economy to exist and initiatives and digital operations. Correct governance provides
thrive. International data access points, Internet exchange points a mechanism to align the programs and initiatives in support of
and data centers must be deployed to serve all the projected needs the overall Strategy. In order to make governance effective and
in each country. The planning shall accommodate the utilization of efficient, it should be encompassing, authoritative and transparent
any new technology related to Artificial Intelligence, Internet of without creating a distraction or barrier of compliance activity.
Things, etc. Key success factor 6: Build for sustainability

114 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 115
Sustainability is one of the most critical goals of digital development, Strategic objective 3: Implementing regulations and policies
and yet, unfortunately, in the Arab world it is often not considered for digital economy
in the development of any long-term strategy. It is therefore critical Policies that encourage the participation of the private sector shall
that long term sustainability – in all its forms – physical, human be developed and implemented to drive the state towards the
and financial - becomes a guiding principle. digitization of the economy. A policy framework for such a goal
will require the formation of several regulatory bodies to cover
all aspects of infrastructure development, e-government and
4.1.2 Strategic objectives e-commerce, competition and antitrust, and intellectual property
rights and consumer protection. Legislation for data protection,
The strategic objectives of the programs under this dimension are: electronic signature and cybersecurity are also required to
establish a healthy and stable ecosystem for digital economy.
Strategic objective 1: Developing the telecommunication These regulations and policies shall constitute the initial building
infrastructure block in the digital transformation.
A telecommunications infrastructure is required to provide
broadband networks that will deliver the required speeds needed
to support the functions and services of the digital economy. This Strategic objective 4: Enhance ICT skills and competencies
strategic objective aims to develop the framework for national at different levels
broadband plans to set the requirements in terms of speed, The objective here is to provide a vision for quality training to
technology, and coverage together with a detailed time plan to improve ICT competencies that today’s Arabic teacher, worker,
ensure that the goal of digital transformation in each Arab state business and citizen need to face the challenge of the scarcity of
based on its current status, is reached. The plans shall be living knowledge and information in a fast-pace world. The objective is
documents that ensure the timely development and utilization to establish training and interactive techniques for improving the
of the best technology that fits each state. Data centers hosting quality of education and general ICT knowledge at all levels based
protected data are an essential ingredient in an efficient Internet on levels of adoption of ICTs. Development of ICT Skills is a key
with fast response and small delays. Incentives for the private foundation in a digital transformation strategy. The core aim is to
sector must be created to build such data centers. Clouds develop ICT training programs to enhance creativity, innovation
providing services for the government and businesses need such and the development of talent as well as transferable coaching
data centers. skills, based on ICT merged learning methodologies.

Strategic objective 2: Enhancing the Internet ecosystem Strategic objective 5: Ensuring availability of funds
The Internet is the basic building block in the infrastructure When it comes to finance, investment and building foundation in ICT
required for the success of the digital economy. Plans to improve may be costly for most of the Arab governments, especially when
the efficiency and reduce the cost of the Internet services need it comes to financial sustainability along the initiated programs.
to be developed. Internet Exchange Points (IXPs) are required Thus, ensuring sustainable sources of funds is vital. Crowdfunding
in each state. International data gateways (interfacing undersea and FDI attraction are sustainable and innovative ways to fund
cables) and policies encouraging the provision of large capacities projects and programs.
in undersea international cables are required by each state to
develop its Internet infrastructure. This Internet ecosystem will
not survive without the proper cybersecurity protection.

116 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 117
Strategic objective 6: Establishing digital governance
In order to ensure the feasibility and implementation of different
ICT programs and initiatives, a central governing body must be

Digital
established, that ensures strategies are getting implemented,
audits and develops new ICT programs, assesses and evaluates
the implementation of digital transformation in all sectors in all
Arab countries and raises awareness among governments and
citizens. Such a body has a vital role in developing governance
Innovation
systems for each project, in order to ensure alignment between
the umbrella strategies, project strategy and directions, and the
path to the required outcomes over the life of the project.

118 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 119
4.1 Digital innovation The DIF defines the seven critical pillars of an innovation
ecosystem: vision and strategy, capital, market, infrastructure,
talent, culture and policy. This framework was used to build the
4.1.1 Key success factors innovation programs to be applied at Arab level

The DIF can operate within the key building blocks: Guiding
Key success factor 1: Contribution to SDGs and sustainability
innovation dynamics, building innovation capacity and ensuring
Bringing together technology and innovation to create synergies
integration with the key sectors are the three building blocks
which will take them further and faster towards achieving the SDGs,
required to set the strategy initiatives.
especially SDG 9 (Build resilient infrastructure, promote inclusive
and sustainable industrialization and foster innovation). Also, the
• Guiding innovation dynamics: The development of strong
Innovation can generate new opportunities of employment and
innovation ecosystems is a key component of regional
growth and contribute to SDG 8 “Sustainable development Goals”
development, as innovation – especially in ICTs – is a driver of
economic competitiveness and growth in modern economies.
To catalyze the entrepreneurial ecosystem, which consists of
Key success factor 2: Innovation as enabler of sustainable
large firms, startups, universities and governments, the key is
economic growth and catalyst of entrepreneurship
not only the roles these entities play, but also the interac¬tions
Innovation is essential to address local and global problems, to
between them. It requires a guiding innovation agency or
enable innovators to create compet¬itive solutions and sustainable
organiza¬tion and flexible approaches that deliberately
employment, to give entrepreneurs and companies the incentives
understand and set policies and programs fostering digital
to develop their own communities, and to ensure that the public
innovation and entrepreneurship.
sector has the means to accelerate its transformation.
• Building innovation capacity: This includes innovation hubs,
Innovation should be used as catalyst to enhance entrepreneurship
tech parks, lab programs, and other similar arrangements.
and establish a sustainable culture of innovation by taking concrete
Cross-sector and cross-regional collaboration are key elements
strategic action using ICT as an enabler.
for building innovation capacity at the national and regional
levels.

Key success factor 3: Apply digital innovation framework

• Integration of ICT into key sectors: Within sectors, many SMEs
to ensure suitability of the ecosystem
and big firms need to integrate technology more closely into
In 2017, ITU developed the Digital Innovation Framework (DIF),
their operations to be competitive and sustainable.
which enables countries to map key chal¬lenges and opportunities
in their ICT innovation ecosystems and assists stakeholders
through their innovation journey.

The DIF identifies six main stakeholder groups needed in digital

transformation: entrepreneurs, the public sector, financiers,
academics, the private sector and entrepreneurial support
networks.

120 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 121
4.1.2 Strategic objectives

The strategic objectives of the programs under this dimension are:

Strategic objective 7: Creating an ecosystem which fosters Digital

Government
innovation within a community
A dynamic innovation environment requires coherent regulatory
organizational settings which guide, facilitate and promote
innovation culture, mindset, projects and programs. This strategic
objective aims to develop the mechanisms (organization, regulatory
frame work, alliances etc.) in charge to orchestrate the innovation
dynamic and good interactions with different stakeholders.

Strategic objective 8: Building innovation capacity

Networks and innovation hubs, cross-sector and cross-regional
collaboration are key elements for building innovation capacity at
the national and regional levels. Cross-regional and cross-sector
collaboration, and support for the establishment of innovation
hubs and knowledge networks, are important. Experiments in
building innovation capacity require cross-sectoral collaboration
with higher education institutions and the private sector. Sharing
the experience and best practices of universities in technology
transfers can accelerate the delivery of innovation to markets.
Arab countries need an ecosystem of universities, labs, companies,
investors and regulators, all ready to collaborate and innovate.

Strategic objective 9: Promote innovation through

collaboration with the private sector
Startups can scale organically through acquisitions or through
collaboration. Collaboration with private sector allows a startup to
profit from the resources of a large corporate partner. Corporate
partners benefit from the startup’s ideas/concepts, possibilities
to test ideas quickly and outside complex structures, access to
new technology, rapid prototyping, and entrepreneurial spirit and
culture. Such a collaboration enables innovative ventures to be
scaled, for the benefit of all concerned.

122 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 123
4.2 Digital government Key success factor 4: Government as a platform
Governments should use technologies (and data) to harness the
creativity of people in groups and create collaborations to jointly
4.2.1 Key success factors address policy challenges.

Key success factor 5: Cross Border recognition

Key success factor 1: Contribution to SDGs and sustainability Cross border recognition has multiple advantages. Citizens and
The e-government is a facilitation tool to help citizens best use businesses can use their eIDs for the access of at least public
and benefit from their civil rights towards the achievement of the online services and the completion of electronic transactions
SDGs, particularly SDG 8 (Decent Work and Economic Growth). It everywhere in the region. The range of accessible online services
also helps in increasing accessibility of public services in a reliable would increase massively. One of the major benefits for citizens
and accountable way, which serves SDG 11 (Sustainable Cities and and businesses would be simplification and the reduction of
Communities). administrative burdens.

Key success factor 2: Services harmonization 4.2.2 Strategic objectives

towards a better citizen experience
Build a new relationship between society and government, The strategic objectives of the programs under this dimension are:
focusing on the experience of the citizen as a user of public
services through the adoption of ICTs in the government. Guide
the digital transformation of public service in the Arab countries Strategic objective 10: Government online services
into an inclusive digital society where all citizens can benefit from Public administration units should deliver services digitally as the
the opportunities offered by digital technologies to improve their preferred option while still keeping other channels open for those
quality of life who are disconnected by choice or necessity. In addition, public
services should be delivered through a single contact point or a
one-stop-shop and via different channels.
Key success factor 3: Proactive governance
Reach the level of governance that reaches out to the public without Modern and efficient public administration units need to ensure
waiting to react to formal requests; offer data disclosure (in open fast and high-quality services for citizens and a business-friendly
format), with the exception of data that the government is required environment. They need to transform their back offices, to rethink
to protect due to privacy or security and deliver online services and redesign existing procedures and services, and open their data
to users. Governments should proactively seek feedback directly and services to other units, and, as far as possible, to businesses
from citizens about the quality of services and make it mandatory and civil society.
for service providers to use smartphones and create dashboards
for citizens to view real-time information on service delivery (this
is what is normally referred to as proactive governance). Strategic objective 11: Increase
inter-government interactions
Public services should be designed to work seamlessly across
governmental authorities and across organizations, relying on

124 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 125
the free movement of data and digital services. This can be done Strategic objective 13: Enhance citizen education
by creating and managing reliable, accessible and cost effective by ICT usage
common central services centers that ensure the facilitation With the goal of informing progress towards the SDGs, especially
of common or interconnected processes. Governments should Goal 4 on education that aims to “ensure inclusive and quality
also simplify work processes to improve service to citizens. The education for all and to promote lifelong learning.” Education
individual e-government projects will be driving the migration of advancement is a vital goal in the Arab countries. The trend that
systems, data and processes to a common solution that better technology affects most spheres of people’s lives impacts on Arab
meets citizen needs. society’s requirements for essential skills and knowledge. Effectively
using technology in teaching and learning in an open distance-
learning environment can enhance the quality of education and
Strategic objective 12: Build public data content as prepare students for their role as knowledge workers. E-education
economic growth driver particularly offers opportunities to enhance students’ engagement
Public data will drive growth, ingenuity, and innovation in the Arab and to contribute to the establishment of a graduate identity.
countries’ economies. Data is the new capital of the global economy Introducing innovative teaching pedagogies to existing learning
in general as countries seek renewed and constant growth and cultures may require a change from instructivism to constructivism.
stronger public services performance that is citizen centered. Open E-education offers opportunities for innovative spaces to expand
data is a crucial part of the burgeoning data landscape and a smart teaching and learning in an open distance learning environment.
ecosystem. In this context, the main objective is to encourage and
drive the uptake and use of open data and in doing so add value to
the economy by increasing transparency, stimulating new business Strategic objective 14: Foster cross-border healthcare,
applications, building trust in Government and improving the lives health security, solidarity, universality and equity
of citizens by delivering better services. Firm structural reforms are needed to ensure the sustainability of
the health systems while securing access to services for all citizens.
This can be done by: As part of these efforts, Arab countries must reduce any regulatory
burden that might hinder the accessibility of cross-border health
• Encouraging the release of all appropriate high value systems, while of course ensuring safety. E-health and wellbeing
government data as open data by default. are areas with high growth potential and possibilities for innovation
notably by unlocking effective health data exchange.
• Building a value driven economy by making it publicly available
and freely reusable.

• Engaging with decision makers, policy makers, and community

representatives to promote and encourage use of open data.

126 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 127
 4.3 Digital business

4.3.1 Key success factors

Key success factor 1: Digital economy contribution to GDP

The new digital evolution will act as an engine of growth for

Digital Business the region’s economy. It will aid in accelerating the digitization
of many current existing industries and catalyzing productivity
improvements and efficiency gains. The selection of the industries
was based on two factors. Firstly, the significance of the sectors
in the Arab region and secondly, the degree at which digital
technologies have penetrated such sectors. The selected industries
to utilize the new digital technologies are as follows:

• Agriculture: Agriculture plays an important role in the

economies of most of the countries in the Arab region. The
contribution of the agricultural sector to the overall economy
differs significantly among countries in the region, ranging, for
instance, from about 3.2% in Saudi Arabia to 13.4% in Egypt.
However, many countries in the region, especially those around
the Mediterranean Sea, are highly dependent on agriculture
such as Egypt, Morocco, Sudan, Syria, Algeria and Mauritania
(ecoMena).

• Manufacturing: Manufacturing is growing in the Arab

world region. Two countries in specific have been focusing
in manufacturing: UAE and Saudi Arabia. In UAE, the
manufacturing sector is the second biggest contributor to the
nation’s economy and accounts for around 80% of Dubai’s
trade that does not involve oil. Saudi Arabia as well is on
its way to become the region’s biggest manufacturing hub.
The Kingdom has invested USD 70 billion to build six cities
equipped with the infrastructure requirements to attract and
support the manufacturing companies (The manufacturer).
The manufacturing sector also contributes significantly to the
GDP of other Arab countries such as Egypt and Jordan (16.44%
and 16.08% respectively).49

49
World Bank

128 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 129
• Financial: The financial services sector has some of the highest 4.3.2 Strategic objectives
levels of digital potential. A more developed and technology-
driven financial sector is essential to boosting sustainable
economic growth in the region. Financial integration within The strategic Objectives of the programs under this dimension are:
the Arab region will also help boost the financial markets
and increase their efficiency. While still relatively small when
compared with the likes of the UK or the US, the region’s FinTech Strategic objective 15: Open market for additional
sector is ready for exponential growth. FinTech startups have economic growth
raised over USD 100 million in the Middle East and North Africa Digitization acts as an economic accelerant that fuels the GDP and
(MENA) region over the past decade. This number of startups uplifts the economic growth. The growth of the digital economy
launched, and amount of investments raised will be doubled by has widespread impact on the whole economy of the Arab world
2020.50 and the chosen sectors in specific. Boosting digital adoption across
these economic sectors will enhance productivity and efficiency and
provide new options to overcome many sector-specific constraints.
• E-commerce: E-commerce is one of the booming sectors in
the region. The Middle East e-commerce market is expected
to reach USD 69 billion by 2020.51 Overall, there is a lot of
Strategic objective 16: Increase digital employment
promise for e-commerce in the Middle East.
As a growth driver, digital transformation is changing the world of
work and creating a revolution in how we work. Digitization can
reshape the nature of jobs within the labor market and create
Key success factor 2: Transforming business and supporting
more jobs. Digitization has provided an additional 6 million jobs
entrepreneurship
in the world in 2011. Harnessing the power of digitization can
The greatest digital opportunity for the Arab countries lies in the
offer great opportunities to skilled workers in the Arab job market,
transformation of existing businesses and enterprises. The digital
prepare people for employment success and fuel economic growth.
revolution has altered the way of doing business leading to change
in business models and increase in competition. Business leaders,
specifically of SMEs, are still finding it hard to implement effective
Strategic objective 17: Promotion of SMEs through
strategies to use the digital technologies as a source of innovation
adopting digital technology
for their customers or users. Emerging digital technologies can
SMEs are a key driver to the digital economy and digitization
be utilized by business leaders and entrepreneurs to identify new
has become vital to them in terms of raising productivity and
opportunities and also serve as a critical enabler for businesses in
driving topline growth. Many SMEs are now looking to embrace
their transformation.
opportunities in the digital economy and acquire digital capabilities
in order evolve their business models, seize growth opportunities
and better compete in the market. The strategy will support
companies and SMEs to upskill their digital capabilities and use
technology more intensively in their operations and workplace.

50
Fintechnews
51
PayFort

130 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 131
 4.4 Digital citizen

4.4.1 Key success factors

Key success factor 1: Contribution to SDGs and

sustainability (reduce inequality and ensure sustainability)
The enhancement of inclusion, accessibility and digital affordability

Digital Citizen in Arab countries will contribute to the achievement of the SDGs,
especially SDG 10 (reduce inequality). Indeed, the fair access to
networks and technologies will significantly trigger a reduction in
the growing disparities within and among countries. Connectivity
can be a channel for better lifestyle and sources of income. In
addition, it will help to ensure their sustainability and contribute to
SDG 11 (sustainable cities and communities).

Key success factor 2: Improve the quality of life

Improve the wellbeing of citizens and civil society: Everyone,
including vulnerable and minority groups, will benefit from a
higher standard of living. Basic digital skills will empower citizens
to seize opportunities presented by technology and digitization.
Digital services would be affordable, secure and accessible to all
regardless of skills and economic means. Local digital content will
be encouraged. Every citizen would have the opportunity to access
and make use of ICT for their daily needs.

4.4.2 Strategic objectives

The strategic objectives of the programs under this dimension are:

Strategic objective 18: Ensure inclusive and equal access

to digital technology
Ensure easy access to technology and connectivity and help
citizens to learn how to get the best out of them. Relevant, alluring
and engaging content drives people to make use of ICT. High

132 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 133
quality local content will draw more people online. The Internet
offers the opportunity to overcome economic limitations; it
reaches households with greater ease. The Internet also offers
unprecedented opportunities to digitally preserve heritage.

Strategic objective 19: Enhancing digital literacy and

social inclusion
Achieving widespread digital literacy is vital for inclusivity and social
cohesion. For example, digitally- competent workers and digitally-
competent citizens can be more successful in the job market and
contribute more effectively within the community. Those without
digital competences are in danger of falling behind.

Towards The
Strategic objective 20: Enhance the fixed broadband
Internet tariffs Implementation of The
Arab Vision For The Digital
Promote better speed and tariffs of Internet will contribute to an
effective participation in the digital economy and deliver positive
benefits for communities in the form of improved access to business
and job opportunities, health, education and government services.
Economy

134 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 135
To achieve the goals of the vision, we need to implement a set of
programs that are outlined in the accompanying guidelines for this
topic, titled “A Guide to Programs for the Arab Vision of the Digital
Economy” Attract
We will clarify here with this document the presumed roles assigned
to the Arab Commission for Digital Economy, as it is the main Between
Authorities,
initiative and the proposed realistic application tool to implement
Government and

te
this strategy. Relevant Parties

i se
ina

fund ICT
rk

ati tal

Inve

S u p er v
Given the nature of the main strategic programs, especially their

suc tow ewo

Coord

on
orm igi
tra essfu rds

ing,
ld
integration and formation of a unified vision, the first necessarily

stme s in
ram
a
initiative will be the formation of a capable or empowered body or

FDI
AF

nt,
nsf
organization by the Arab countries to supervise and council the

c
implementation of its projects and programs.
to fe Th
w d e
su ard era t
cc s tio er en
ACDE is endowed with the necessary operational model, tra ess ach n
ns fu ie Ov end s
fo l d vin p ie
capabilities and regulatory framework to achieve and rm ig de d
at ital
g In Bo
execute the strategy. The Commission ensures highest level ion
representation of Arab countries as well as coordination ev e

D
and joint work with representatives of ministries, public el
op nag
Ma
authorities and organizations of Arab states.

ACDE’s board of directors consists of representatives of the digital

economy of the Arab countries. They meet twice a year. The
Commission will be attached directly to the Arab League as an Figure 10 ACDE Roles
independent Arab institution and will function in accordance with
the League’s rules of corporate governance. The Commissioner- The organizational structure of the Commission is designed to fit
General is a high-level person with proven experience and success with the ICT and digital economy ecosystem in the world and the
needed to lead digital change and transformation. He/she is Arab region. It is also designed to sustain the implementation of
contracted by the board for a period of four years during which the strategy and systems built by the Commission. The structure is
he/she will have full administrative powers to run the Commission defined in accordance with the strategic vision and related programs
according to rules and statutes. as well as the operational model defined during the first five years,
coordination with affiliated bodies and relevant Arab organizations
The following figure illustrates ACDE’s business model and and Arab governments, in addition to various funding entities and
governance: investors for the launch of programs and projects.

136 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 137
The coordination role stands on top of the responsibilities of the
Arab Commission for Digital Economy
Commission to ensure continued momentum and support for the
implementation of these ambitious plans and provide the best
opportunities for the Arab digital transformation. The second role Advisory Wing
Advisory Wing 2 -
is to supervise a group of eight or more Arab organizations (shown 1-Technical
General Commissioner Sectoral Consultants
Consultants
in Figure 18 below within the organizational structure). These 5-6 PTEs
5-6 PTEs
organizations have thematic or sectoral specialization and can
supervise or carry out projects directly by owning and implementing Strategy • Strategy Development
a range of programs such as e-learning, health, and agricultural & Planning
• Strategy Coordination
(Monitoring Unit)
and financial services. Thirdly, the role of the Commission is general 4-5 FTEs • Strategy Evaluation
supervision and coordination without interference in the detailed
management of the projects or program. Each project or program
is subject to specific agreements that regulate work relationships. Financial
Digital Digital Policy Digital Society
Development Administrative
Marketing & Excellence & Development Trust &
and Support
The Commission is required to implement a series of programs as PR 5FTEs Infrastracture & Coordination Cybersecurity
Investment 10FTEs
4-5 FTEs 4-5 FTEs 4-5 FTEs
reflected in the master plan. As a result of the implementation of 5 FTEs

the annual programs and projects, the Commission assesses the

situation annually and readjusts the plan to maintain full alignment • Funding • Administrative • Media • Updated • Policy • Cybersecurity
with strategic vision. Then it repeats the administrative cycle Events & & Finance Convergence Infrastructure Implementation Technology
Campaigns Assessment & Planning & capacity
referred to above (business and governance model for ACDE).
• Compliance • Social Media • Infrastructure Building
• Donor & Planning Platforms • Policy
Development Needs
Suggested organizational structure Assessment Outreach & • Cybersecurity
and Grant
• HR • Audiovisuals International & Digital
Wriiting • Technical
Operation & Media Affairs Privacy Policy
The following figure illustrates the organization structure to launch, Support guidance
• Crowdfunding
manage and supervise the programs and ensure full coordination Platforms • Contacting & Programs • Future • Data Policy • eGovernance
Procurement Emerging & Innovation & Trust
with Arab countries and with similar international bodies. • Marketing Technologies
& PR (FET) • IPR • Political
Campaigns Guidance and
• Programs
Support
Implementation

Arab Knowledge Arab Communica- Arab Arab Arab Union Modern

Union for for Arab Innovation tion and eHealth Fintech for Modern Arab E-
Precision Center & Development Organiza- Agency Manufac- University
Excellence
Agriculture Technology tion turing MAU
Center
AUPA Institute AeHO
(AIT)

Figure (11-a) ACDE’s Organizational Structure

138 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 139
In order to strengthen the position of ACDE, it is recommended
that it reports directly to the secretary general of the League Strategy & Planning
of Arab States through a commission attached to the secretary Strategy &
general office. Planning
It is responsible to develop the digital
transformation strategy, coordinate
The diversity of situations across the Arab countries is huge. and align between different parties and
Cooperation between them is key for the enhancement of countries and evaluate and montor
innovation, practices and resources. The overall governing entity over the achievement the strategy
should have a dedicated action plan to foster this cooperation. Strategy
(50 programs) through monitoring
The governing structure as described above (Figure 18) starts with Development
over all the other departments
ACDE at the top. Under ACDE, come a board of directors and two
consulting wings. Strategy Development
Board of Directors: The board of directors’ key purpose is to • It is the process of researching
ensure that the Commission is on the right path, by collectively Strategic and identifying strategic options,
directing its affairs and assessing its overall direction and Coordination selecting the most promising and
strategy. Consulting Wings: The first wing comprises a group deciding how resources will be
of technical consultants and professionals who can provide allocated across the organization
technical supervision, direction and support to the board about to achieve objectives
ongoing projects. While the second wing is a group of sectoral
consultants, such as an e-healthcare consultant, a FinTech Strategy Strategic Coordination
consultant, etc. Evaluation
• Responsible for strategic alignment
Further down in the organizational structure, there are seven main and coordination between different
departments: parties and authorities (such as
governments, ministries, parties
1. Strategy and planning (separate department that audits Digital Economy sector entities, etc.)
strategy development and implementation and reports to the Indicators and Index
Strategy Evaluation
board of directors)
• It is the assessment process of
2. Financial development and Investments the strategy and its goals, making
sure that the strategy is going in
3. Administrative support the right path by assessing each
department’s performance
4. Marketing and public relations
• Monitor each of the project’s
5. Digital excellence and infrastructure plan and process, measure their
indicators and report them to the
6. Digital policy development and coordination top management

7. Digital society, trust, and cybersecurity Digital Economy Indicators and Index

• Publish Arab Strategic Economic

Report through measuring general
KPIs of Digital Economy

140 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 141
 Administrative support
Administrative
support It is possible for work achieving high
Financial Development
performance levels of performance
Financial Development and Investment
of the federation employees and
and Investment managing all the internal affairs
AFDE manages the budget of projects
related to the federation
carried out by its departments, and its
headquarters, in the Arab delegations Financial Affairs Financial Affairs
or through Arab executive agencies.
• Management of office and assets
Funding Events & strategy
Campaign Funding Events & Campaign
• Plan, organize, audit and account
• Organize campaigns and events for and control all the federation’s
Contracting and finances
that highlights a specific goal Procurement
that Arab countries want to reach • Produce financial data and prepare
in order to attract investments, monthly and annual reports
Donor Development funds, FDIs, etc.
Contracting and Procurement

Donor Development • Issue purchasing orders

Human Resources • Manage suppliers and contractors
• Develop a strategic pipeline of donor • Issue tenders and offers
• Manage contracting affairs
engagement
Grant Writing • Monitor payments
• Develop relationships and HR Operations
communication with funding
Legal Affairs • Responsible of full and part time
sources such as the World Bank
hiring
Crowdfunding • Training and development
Grant Writing
Platforms • Register and evaluate training and
education institutes related to the
• Grant proposal writing and AFDE
submissions to funding sources
• Ensure the positive and energetic
work environment in the AFDE
Crowdfunding Platforms
Legal Affairs
• Raise funds from a large number
• Manage the legal aspects of
of individuals or institutional
contracting and procurement
investors through online web-
based platforms • Document, archieve and revise
agreements and contracts
• Legal coordination with affiliated
and contracts
• Manage law cases

142 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 143
 Digital Excellence &
Marketing and PR
Digital Excellence & Infrastructure
Marketing and PR
Infrastructure To ensure leadership in future ICT
This department builds and maintains a
positive public image for the federation. Technologies and Infrastructures and to
It creates media from press release help transform the current situation to
to social media messages, that shape the desired situation through building
public opinion of the federation and infrastructure, mega projects, flagship
Media convergence
increase awareness of its importance. Infrastructure and ensure the right implemntation of
and Social Media
the programs.
Media convergence and Social Media

• Manage all media and advertsing Infrastructure

affairs related to the AFDE, manage
Audio visuals and • Established cooperation agreements
the media affairs that severe to Future & Emerging
media support with relevant governmental bodies
achieve the AFDE goals on all social Technologies (FET)
programs related to infrastructure
media platforms.
• Studying the federation’s objectives, • Develop up-to-date (semi annual
promotional policies and needs to and annual) evaluation reports
build public relation s strategies about current infrastructure in each
Marketing and PR Technological
that influence stakeholders country and areas of gaps
campaigns Enterpreneurship
Audio visuals and
• Recommend areas of development
media support programs
in infrastructure
• Produce media programs in
coordination with media networks • Audit over the implementaion of any
Programs
and influencers on all media project related to the infrastructure
Implementation
platforms, which serves the AFDE
goals Future & Emerging Technologies (FET)
Marketing and PR campaigns • Ultimate responsible for introducing
new technologies like IoT and Machine
• Manage all press conferences, events,
to Machine Communication, through
participation and representation
facilitating the adoption of new
in international conferences and
technologies for the governments, by
exhibitions and arrange events to
providing guidance and supervision
attract sponsors for the programs
• Manage media content, productions, • Monitoring the implementation of
workshops, portable media campaigns strategic projects related to FETs
• Encourage innovation, creativity,
enterpreneurship

144 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 145
 Technological Enterpreneurship Digital Policy Development
Digital Policy and Coordination
• Investment in research, inventions
and studies that help to introduce
Development and It is responsible for the overall
new technologies such as IoT, Big Coordination regulations and policy development
Data and Robotics in relation to the digital economy

• Execute scientific initiatives that Policy implementaion and planning

facilitate the challenges facing the Policy implementaion
Arab World. They are long-term and planning
initiatives that compiles pioneering • Responsible for the interface with
the other international institutions
research teams from different
like the EU, about setting regulations
majors, aligned to one goal and an and policies and develop mutual
ambitious roadmap policy projects
Policy outreach and
Program Implementation international affairs
Policy outreach and international affairs

• Provide guidance, support and • Regular IPR laws

supervision over the implementation
of the 50 projects in cooperation • Regulate cybersecurity and data
Data policy and protection
with the stakeholders innovation
• Regulate ePayments and Financial
• Define objectives of each project Technology laws
and its KPIs

• Allocate resources and budget Data policy and innovation

for each project in parallel with IPR
the Financing and Investment • Work along the data-value chain
department to provide a legal and political
framework that allows public
authorities, companies and citizens
• Supervise over each project, to make the most of data in all
provide reports to the Strategy and sectors of the economy and many
Planning department aspects of society

• Address the barriers that impede the

creation of an Arab data economy,
namely by enhancing access to and
reuse of several types of data: public
sector, publicly funded, research and
private sector data.

• Direct the re-use of public sector

information which advances the
Federation’s open data program

146 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 147
 IPR Cybersecurity & Digital Privacy Policy

• Advise the Federation on policies • Develop a Cyber Security Strategy,

and legislation to protect intellectual policies and regulations
poverty
• Ensure synergies with cyber security
• Providing civil legal advice on
and privacy policy.
intellectual property matters to the
federation bureau and departments
eGovernment & Trust
• Registration of trademarks, patents,
design and copyright licensing bodies
• Advance the quallity and innovation
of public administrations and accelerate
the large-scale public sector use
of trusted identification and trust
Financial Development services in the e-Government
Digital Society, and Investment programs and initiatives
Trust and
Cyberbullying • Enable better quality, more efficient
It provides a strategic approach to and user-centric services across the
the social dimensions of the AFDE, services provided by the eGovernment
focusing on applications that combine programs and initiatives
digital policy, digital Research and
Innovation and deployment and
Cybersecurity provide for leadershipin cyber security
Technology & Capacity and digital privacy, legislation and
Building innovation, in order to improve the
life of ctizens, the opportunities for
companies and the quality of public
administrations in major areas of
Cybersecurity & society and economy
Digital Privacy Policy
Cybersecurity Technology &
Capacity Building

• Ensure a future of strong digital

eGovernment & Trust resilence and privacy protection
information security and digital
provacy in the societal challenges

• Focus on innovative and next-

generation systems and generic
cyber security and privacy

148 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 149
 Arab Union Arab Innovation Accessibility & Arab eHealth
Knowledge for Arab Fintech
for Precision & Technology Communication Organization
Arabs Center Agency
Agriculture AUPA Institute (AIT) Excellence Center AeHO

• AUPA is made to • The Center is an • The AIT institute • The eHealth

• This center is Organization works • This Agency works
support farmers on excemptional partner enables cross-border responsible of with partners (such within financial
the small scale and in developing of Arab collaboration establishing regional as ministries) at the institutions in the
agriculture ministries new ideas and by provding an telecommunication regional and country Arab Region like
on a larger scale in
implementing ICT innovation hub in level to promote
the Arab countries by strategies and plans Central Bank,
regional projects each Arab state. It and strengthen the
providing customized in collaboration with use of ICT in health Community Banks,
information and • It manages offers the benefits of Arab Government Insurance Agencies,
development from
services that specialzed programs regional ecosystems, and ICT ministries. applications in the etc.
increase productivity, with an aim of partners’ facilities, It is responsible for field to regional
profitability and enhancing and factories and projects such as governance • The Agency aims
environmental classroom for joint • The Organization is
improving basic ICT Arab Data centers to support and
sustainability. programs and developed because
knowledge, culture and Cloud Services. empower a healthy
projects. of the increasing
• Such union can offer and educational National Broadband importance of and successful
many other benefits processes in • The AIT focus programs, IXPs the digital health financial system,
such as better all societal and on developing Development, etc. solutions and its where firms can
working conditions professional spheres potential to impact thrive and consumers
innovative products,
for farmers, • It also coordinates health in the Arab can place their
• The Center provides service and training states. As a result,
increased animals with consulting trust in transparent
ICT vocational in a specific area the organization will
welfare and the entities to develop and open markets,
training, cuztomized to create a new help to introduce
potential to improve
training programs for innovative and relevant project and merge new through introducing
various aspects technologies in the
SMEs, basic ICT skills creative generations. studies. technologies
of environmental healthcare sector in
stewardship. training etc. the Arab states.

150 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 151
 For more details and analysis of the work environment of the Arab
Commission for the Digital Economy, the parties that will cooperate
with it, the strategic partners and stakeholders, please refer to the
book “A guide for Arab vision programs for the digital economy”,
where it is exposed in more detail to the mechanisms of work,
financing and joint Arab cooperation.

Arab Union Modern Arabs

for Modern E-University
Manufacturing MAU
• The Union is
• MAU is a virtual
responsible for the
univesity that
implementation of
operates solely by
Smart Manufacturing
electronics means
and its practices to
using the Internet
ensure an up-to-date
and e-mail
skilled workforce.
It introduces
• MAU collaborates
new technologies
with global
in the modern
educational
manufacturing and
institutions to offer
industry 4.0
quality, affordable
and marketable
• The union is comitted
courses and program
to providing the
through a quality and
Arab communities
modernized learning
with Workforce
techniques for
Development,
undergraduates and
Education and
postgraduates
Training for the the
workforce to make
• The university works
the Arab’s Modern
regionally, cross-
Manufacturing
border and cross-
transition and
culture
implementation
successful.

Figure (11-b) ACDE’s stakeholders mapping

152 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 153
154
ARAB DIGITAL ECONOMY VISION
the digital economy
of the Arab vision for
Measuring the results

5.1 KPIs and Arab Digital Index

We have 25 KPIs to measure the performance of each cluster towards successful digital transformation:

Dimension 1:
Digital Foundation

Table 10 KPIs of Digital Foundation

Strategic Cluster 3 Cluster 2 Cluster 1 References/

Dimension Domain KPIs
Objectives 2023 2026 2029 2023 2026 2029 2023 2026 2029 Data Sets

Developing % of households
24.20% 30% 50% 61.20% 75% 85% 91% 99% 99% ITU
Telecom- with Internet
Fixed Broad-
munication Fixed Broadband
band
Infrastruc- penetration 2.2 5 10 9 18 25 11 20 30 ITU
ture (Subs./100 pop)
Mobile Device
Penetration 71 80 95 99 99 99 100% 100% 100% ITU
(per 100 people)
Digital Mobile Commission
Foundation Broadband of Science and
3G/4G
Enhancing 3.75% 10% 20% 63% 80% 90% 82% 90% 95% Technology for
Penetration (%)
the Internet Development
Ecosystem (CSTD)
Broadband Av.
1.82 2 4 1.82 2 4 1.82 2 4 ITU
Speed (Mbps)
Speed
ARAB DIGITAL ECONOMY VISION 155

Average
Download 1.05 2 3 1.05 2 3 1.05 2 3 ITU
Speeds (Mbps)
 Dimension 2: Digital Innovation

156
Table 11 KPIs of Digital Innovation

Strategic Cluster 3 Cluster 2 Cluster 1 References/

Dimension Domain KPIs
Objectives 2023 2026 2029 2023 2026 2029 2023 2026 2029 Data Sets
http://www3.
Building wefofum.
Capacity for In- org/docs/
Innovation 2.6 3.5 4.3 3.74 4.5 5.4 4.2 5.7 6.1 GITR2016/
novation (1-7)
Capacity WEF_GITT_
Full_Report.pdf

ARAB DIGITAL ECONOMY VISION

Creating
ecosystem http://www3.
which wefofum.
Internet access org/docs/
fosters 2.1 3 3.5 3.6 4.5 5.7 3.6 4.5 5.7 GITR2016/
at schools (1-7)
innovation WEF_GITT_
within a Full_Report.pdf
community
Digital http://www3.
Firm-level wefofum.
Foundation Promote org/docs/
the in- technology 3.4 4 4.5 4.8 5.5 6 4.9 5.8 6.5 GITR2016/
novation absorption (1-7) WEF_GITT_
through Full_Report.pdf
collabora- http://www3.
tion with Knowledge- wefofum.
the private org/docs/
intensive jobs, 17.60% 20% 27% 24% 27% 30% 27.40% 30% 35% GITR2016/
sector % workforce WEF_GITT_
Full_Report.pdf
No. of
Building
publications
Innovation 0.70% 0.80% 1% 1.60% 2% 2.50% 2.40% 2.60% 3% DESI
(papers,
Capacity
researches, etc.)

Dimension 3:
Digital Government

Table 12 KPIs of Digital Government

Strategic Cluster 3 Cluster 2 Cluster 1 References/

Dimension Domain KPIs
Objectives 2023 2026 2029 2023 2026 2029 2023 2026 2029 Data Sets
The Global
Increase Information
Technology
inter-Gov- ICT use & gov’t
3.1 3.5 4.2 3.68 4.6 5.9 5.2 5.9 6.2 Report 2016
ernment efficiency (Networked
interactions Readiness In-
dex) (GITR)
Creating
ecosystem e-Government
Global Open Data
which Development http://index.
Index (measures
fosters Index 10% 11% 13% 18% 19% 20% 25% 27% 30% okfn.org/
the openess of
innovation dataset/
government data)
within a
Digital
community
Foundation
BBVA,
Promote Government
DiGiX: The
the in- Online Services 0.05 0.2 0.3 0.56 0.74 0.8 0.75
Digitization
novation Index, 0-1 (best)
Index
through
collabora-
tion with Global Cyber
the private Security Index 0.16 0.15 0.3 0.47 0.65 0.73 0.54 0.6 0.75 ITU
sector (Score 0-1) ITU
Cybersecurity
ARAB DIGITAL ECONOMY VISION 157

Building Secure Internet

Innovation Serves (per 2.14 15 20 23 34 40 171 200 240 ITU
Capacity million pop.)
 Dimension 4: Digital Business

158
Table 13 KPIs of Digital Business

Strategic Cluster 3 Cluster 2 Cluster 1 References/

Dimension Domain KPIs
Objectives 2023 2026 2029 2023 2026 2029 2023 2026 2029 Data Sets
Open
Market Business to BBVA,
for more Business Internet DiGiX: The
3.94 4.3 4.8 4.49 5.1 5.8 5.63 5.9 6.25
additional Use (min. 3.37, Digitization
max. 6.36) Index

ARAB DIGITAL ECONOMY VISION

economic
growth
Increase the Business to Con-
http://index.
sumer Internet
Digital em- 3.05 3.8 4 3.39 4.5 5.6 4.72 5.5 5.95 okfn.org/
Use (min. 2.90,
ployment dataset/
max. 6.30)
Promote
Digital of SMEs No. of workers BBVA,
Foundation through in ICT as a DiGiX: The
2.60% 2.80% 3.10% 3.10 3.50% 3.60% 3.80% 3.90% 4%
adopting e-Business percentage of the Digitization
digital tech- total population Index
nology
No. of Start
ups related to
0.04 0.05 0.07 0.08 0.09 1.1 2.05 2.1 2.25 DESI
technology / 1000
Open
individuals
Market
https://
for more Contribution of
www.export.
additional eCommerce to
<0.1% 0.05% 1.50% 0.20% 0.80% 1.70% 0.40% 1% 2% gov/arti-
economic the GDP in the
cle?id=Unit-
growth cluster’s
ed-Arab
Contribution of
eCommerce to 1% 1.20% 1.50% 1% 1.50% 2% 1% 2% 3%
the total trade

Dimension 5: Digital Citizen

Table 14 KPIs of Digital Citizen

Strategic Cluster 3 Cluster 2 Cluster 1 References/

Dimension Domain KPIs
Objectives 2023 2026 2029 2023 2026 2029 2023 2026 2029 Data Sets
Enhance the
Fixed broad- No. of Internet
35% 40% 50% 57% 65% 75% 91% 92% 93% ITU
band Internet Users
tariffs
Basic Skills
Ensure
& Usage Regular Internet
Inclusive and
Users
Equal Access 32.49% 50% 70% 51% 65% 80% 81% 90% 95% ITU
(% of Internet
to Digital
Digital users)
Technology
Foundation The Global
Information
Enhancing
Technology
Digital
Internet E-Participation Report 2016
Literacy 0.08 0.2 0.4 0.552 0.67 0.7 0.66 0.75 0.89
Users Index, 0-1 (best) (Networked
and Social
Readiness
Inclusion
Index)
(GITR)
ARAB DIGITAL ECONOMY VISION 159
 Conclusion

Digitization is a technology/supply shock which affects the

main economic aggregates, notably via enhancing competitive
environment, productivity and employment effects, as well
as through its interaction with institutions and governance.
Understanding digital transformation and the channels through
which it influences the economy is therefore critical to the

Conclusion
construction of monetary policy.

All regions and countries around world have to deal with the
thematic field of digitization in one way or another. Digitization is
in fact a reality that presents both opportunities and challenges.
Industrial nations in particular see digitization as a key driver of
development. The fundamental themes of digitization are clear: it is
all about education and qualifications, expansion of infrastructure,
and the use and security of data. This wave of digitization is
creating and giving rise to new solutions and new business models.
New services are expected from digitization. Hence, digitization
has the potential to become a turning point in addressing many
issues in the Arab world including social welfare, job creation and
employment, etc.

Governments of Arab countries face a major challenge in promoting

acceptance of new technologies and digital adoption by populations
and companies. With a well-defined strategy and action plans, Arab
countries can undergo successful digital transformation. Some
of the recommendations include energizing digital acceptance
with holistic digital public policies, measuring the digital impact
in economies and promoting digital telecommunications
infrastructure, redefining traditional regulatory frameworks
and institutions, fostering digital and banking penetration, and
understanding the implications of each new business model.

In order to develop a reliable strategy for a successful digital

transformation in the Arab countries, we have used three main
inputs:

160 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 161
I. Sectoral benchmarks: We selected priority sectors for digitization to economic performance. In other words, countries
digitization. Prioritized sectors were chosen because of highest with political and regulatory environments which facilitate ICT
economic and employment impact if digitized, and also because penetration and the development of business activities as
of the easiness of digitization. well as governments that lead and succeed in developing and
implementing strategies for ICT development, are expected to
II. International benchmarks: We studied countries’ success witness higher growth rates of GDP per capita.
stories and best practices in digital transformation and
analyzed them to come up with lessons learnt. • The digital business, followed by digital innovation dimension,
has the highest association with lower unemployment.
III. Current situation analysis: We provided an overview of the
current state of national digital strategies in Arab countries. • Digitization is related to the economic and social performance
The analysis also identified the prioritized Arab countries of Arab countries. However, the strength of this relation is
based on their declared policy objectives for developing their lower in magnitude than that in the rest of the world.
digital economy and society. Our analysis of the Arab countries’
current situation revealed that formulating and effectively • The economic and social impacts of digitization differ among
implementing an “Arab Digital Agenda”, must consider the Arab countries according to their level of digital performance.
heterogeneity among Arab countries in terms of income,
competitiveness, infrastructure, innovation, e-government • For Arab countries with low digital performance, digitization is
development and ease of doing business. less correlated with growth and some dimensions of digitization
correspond to lower growth rates. However, the relationship
between digitization and job creation is higher in magnitude,
The strategy is built on five dimensions: Digital foundation, compared to the rest of the world.
digital innovation, digital government, digital business and digital
citizen. Twenty objectives, 15 themes and 50 programs have • In digitally-advanced Arab countries, the relationship between
been developed for the five dimensions. The programs have been digitization and unemployment is negative but lower in
directed to selected Arab countries. magnitude compared to the rest of the world. On the other
hand, the relationship between digitization and growth does
An assessment of the economic and social impact of digitization not differ from that of the rest of the world.
has been established in Arab countries, through estimating the
relationship between the proposed dimensions of digitization on
one hand, and GDP per capita growth rate and unemployment It is worth noting that although the magnitude of the gap between
rate, on the other. The regression results showed that digitization Arab countries and the rest of the world concerning the relationship
does matter for all countries and for Arab countries. Below we between different aspects of digitization, on one hand, and growth
provide the main findings of the model: and unemployment, on the other, is not sizeable, the direction of
this gap, whether positive or negative, differs with respect to the
• Digitization is significantly positively related to economic level of digitization of the Arab countries.
growth and employment.
As mentioned above, the Implementation plan includes 50
• The political and regulatory environments, as well as programs. These programs are the primary path for the digital
government usage are the most correlated dimensions of transformation of the region. There is a defined dashboard/

162 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 163
platform for each program which covers the description, objectives
of the program, main phases, prerequisites, required budget,
stakeholders, etc.

Following that, a prioritization scheme has been established to

identify high to low priority projects. The results of the matrices
have led to the selection of ten highest priority programs to become
pilot programs.

A governance model has been established to define the roles

and responsibilities of the ACDE, the organizational structure,
stakeholders’ mapping, etc., noting that eight independent
bodies would operate under the umbrella of the ACDE. These
are: Arab Union for Precision Agriculture (AUPA), Knowledge
for Arabs Center, Arab Innovation & Technology Institute (AIT),

APPENDIX
Accessibility and Communication Excellence Enter, Arab eHealth
Organization (AeHO), Arab FinTech Agency, Arab Union for Modern
Manufacturing and Modern Arabs E-University MAU.Also, Potential
funding sources have been identified, taking into consideration
their scope of funding and latest funding seal or limit per year.

Finally, in order to measure the strategy’s impact and performance

in the upcoming years, a list of defined KPIs and standards have
been delineated for the upcoming years. Those KPIs are identified
for each of the five dimensions of the strategy and for each of the
clusters.

164 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 165
Appendix 10% increase in digitization reduces unemployment rate by 0.84%
for the whole sample of countries.
Appendix 1: The economic and social impact of the proposed
digital strategy Accordingly, the proposed econometric model estimates the
relationship between digitization and two variables: a) GDP per
Methodology and data capita growth; and b) unemployment rate.

This part of the report tries to analyze the economic and social The model takes the following form:
impact of the proposed digital agenda for the Arab countries,
distinguishing between the different dimensions of the digitization yit= β0+β1digitalizationit+β2digitalizationit*Arab country dummyit+
process i.e. the 5Ds: digital foundation, digital innovation, digital β3 Xit+εit .. (1)
business, digital government and digital citizen.
where:
Assessing the impact of digitization could be tackled either from
the macro or the micro (or sectoral) level. However, the report y: is the dependent variable representing each of the two outcomes
at hand is confined to analyzing the macroeconomic impact of (economic growth, and unemployment).
digitization. The main reason behind this macro-level analysis is
the difficulty of accessing, and sometimes the unavailability of, a digitization: a variable that indicates some digital aspect proxying
comprehensive and lengthy micro or sectoral data set, especially each dimension of the digitization process (5Ds).
for the Arab countries. It is worth noting, though, that the micro-
level analysis usually provides more specific insights as to the Arab country dummy: is a dummy variable that takes the value
importance and impact of different aspects of digitization. of 1 for Arab countries and 0 otherwise.

It is argued that by 2020, the digital market will have added USD X: is the vector of control variables which includes the main
95 billion52 every year to the Middle East’s annual GDP. Ultimately, determinants for each outcome, based on what is standard in the
a unified digital Middle East could contribute up to 3.8% annually to literature.54
the GDP, or approximately USD 95 billion. Another study analyzed
150 countries using a classical production function model to assess ε: is the error term, the subscripts i and t identify the country and
economic impact, controlling for number of variables. Results the year, respectively.
showed that a 10% increase in digitization leads to an increase
in GDP per capita by 0.60% worldwide, 0.50% in constrained The dataset covers about 144 countries, of which 16 are Arab
countries, 0.51% in emerging countries, 0.59% in transitional countries over the period (2012-2016).55 The Arab countries
countries, and 0.62% in advanced ones.53 It was also found that a included in the sample are: Algeria, Bahrain, Egypt, Jordan, Kuwait,

52 54
Tarek Elmasry, Enrico Benni, Jigar Patel and Jan Peter aus dem Moore. (2016), “Digital The choice of the control variables for each outcome (i.e. growth and unemployment)
Middle East: Transforming the region into a leading digital economy”, Digital McKinsey. is based on theory and data availability.
53 55
Karim Sabbagh , Bahjat El-Darwiche , Roman Friedrich and Milind Singh (2012),”Max- The main reason behind choosing this time period is data availability, especially for
imizing the impact of digitization, PWC, pp. 8-17 , this report Previously published in Arab countries, which are our main focus here. In addition, the WEF adopted a new
“The Global Information Technology Report 2012: Living in a Hyperconnected World,” methodology to construct the Networked Readiness Index (NRI) since 2012, which differs
World Economic Forum, 2012, and by Booz & Company in 2012. from the one used before 2012. Thus, for consistency purposes, we chose to start from 2012.

166 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 167
Libya, Lebanon, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, High_Arab country dummy: is a dummy variable that takes the
Syria, Tunisia, United Arab of Emirates, and Yemen. Other Arab value of 1 if the Arab country has high digital performance and 0
countries are not included in the model due to the unavailability of otherwise.
data on digitization and/or macroeconomic variables.
Due to the short time span of the dataset, the above-mentioned
Equation (1) is estimated several times, where we include one equations (1) and (2) will be estimated using cross-sectional
indicator accounting for each dimension of digitization, one at time-series Feasible Generalized Least Squares (FGLS) with
a time. Moreover, an interaction term between the indicator of heteroscedastic robust standard errors.
digitization and the Arab country dummy is included. This is to
assess whether the relation between digitization, accounted for The dataset was built by screening different international data
by each dimension, on one hand, and growth and unemployment, sources of ICT and selecting data, which covers the 5Ds of the
on the other, differs in the Arab countries compared to the rest of proposed digital agenda, from the Networked Readiness Index
the world. (NRI) of the World Economic Forum (WEF). The main reason behind
relying on the NRI is that it is considered the most comprehensive
Nevertheless, since the digital performance differs among the Arab index for digitization that takes into account and incorporates
countries themselves, we further divide the Arab countries in the indicators for almost all the components of the adopted framework
sample into two groups: the first includes the Arab countries with of digitization.
high digital performance (Bahrain, Jordan, Oman, Kuwait, Qatar,
and United Arab Emirates), and the second includes Arab countries The data for the dependent variables (GDP per capita growth
with low digital performance (Algeria, Egypt, Lebanon, Libya, rate and unemployment), as well as the control variables in each
Mauritania, Morocco, Tunisia, Syria and Yemen). The rank of these equation is derived from several databases, including the World
countries in the latest Networked Readiness index (NRI) issued by Development Indicators (WDI) published by the World Bank and
the World Economic Forum (WEF) in 2016 is the criteria behind the UN statistics. For quality of government, we rely on the data
this classification. Accordingly, we construct two dummy variables of the World Governance Indicators (WGI) published by the World
for these two groups, and incorporate interaction terms between Bank.
digitization dimension and these dummies. This allows us to test
whether the relation between digitization in each dimension and For the growth equation, our empirical model builds on the neo-
growth or employment differs as the level of digital performance classical growth theory, where the real per capita GDP growth
varies. Hence, the equation of the model takes the following form: rate depends on the initial value of GDP per capita, to test for the
convergence hypothesis, as well as a set of structural indicators
yit= β0+β1digitalizationit+β_2digitalizationit*low_Arab country dummyit+ and other factors influencing growth, including population growth,
β_3digitalizationit*high_Arab country dummyit+β4 Xit+εit .... (2) investment ratio to GDP, the ratio of government consumption
to GDP, inflation, as well as a measure of openness to trade. In
where: addition, the world governance indicator for rule of law is used as
a control variable, to reflect the institutional environment in the
Low_Arab country dummy: is a dummy variable that takes the country. As for the unemployment equation, previous literature
value of 1 if the Arab country has low digital performance and 0 shows that unemployment is determined by productivity, as well as
otherwise. sociological and political patterns of each country. Thus, we include
the following variables as controls in our model: urbanization rate,
per capita GDP, degree of exposure to international trade, Inflation
rate and rule of law.

168 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 169
Concerning the variables reflecting the proposed dimensions of Moreover, the skills index, as one of the proposed digital foundation,
the digitization process, we employ seven variables: the Political & reveals no significant correlation with growth. The most influential
Regulatory Environment Index (1st pillar of the NRI) to proxy the variable is the political and regulatory environment index, followed
policies and regulations theme of digital foundation, the Business by the government usage index, whereas the least association is
and Innovation Environment Index (2nd pillar of the NRI) to proxy for the business usage index. An improvement in the political and
the innovation dimension, the Infrastructure Index (3rd pillar of the regulatory environment index and the government usage index
NRI) to proxy the infrastructure theme of digital foundation, the by one unit, is associated with an increase in the GDP per capita
skills index (5th pillar of the NRI) to proxy the human capital skills growth rate by about 0.9 and 0.77 percentage points, respectively.
theme of digital foundation, the Individual Usage Index (6th pillar However, an improvement in the business usage index by one
of the NRI) to proxy the digital citizen dimension, the Business unit is coupled with an increase in the growth rate by about 0.25
Usage Index (7th pillar of the NRI) to proxy the digital business percentage points. Adequate political and regulatory environments
dimension, and finally the Government Usage Index (8th pillar of are believed to facilitate ICT penetration and the development of
the NRI) to proxy the digital government dimension. business activities which in turn enhances growth.

It is worth noting that this exercise should be seen as a first Furthermore, these positive relations are also significant for Arab
attempt to assess whether and how differently the proposed digital countries, but are less in magnitude, since all the interaction
dimensions in the Arab digital agenda are linked to the aggregate terms between the digitization indices and the dummy of the
performance of both economic and social variables of the Arab Arab countries are significantly negative. In Arab countries, an
countries of interest, in comparison to the rest of the world. improvement in any aspect of digitization by on unit is associated
with higher growth, but by a factor that is expected to be less by
• Regression results around 0.2 percentage points compared to the effect of the same
the detailed empirical results of the different models estimated are aspect of digitization on growth in the rest of the world.
shown in the full report. In all models, most of the control variables
included are significant and have the expected signs in accordance Nevertheless, the negative association of individual usage with
with theory and literature. growth is more pronounced in Arab countries, the gap is estimated
to be about 0.13 percentage points. MENA region ranks 2nd
As for digitization variables, Table (14) reports the coefficients worldwide in number of YouTube video views. It has the fastest
of these variables and their interaction terms with the dummy growing video consumers on FB. SMEs with online presence, on
variable of Arab countries. Concerning GDP per capita growth, the other hand, are reported to be around only 15%. The skills
the results in Table (14) show that all dimensions of digitization index is negatively significant for Arab countries, compared to the
are positively related to GDP per capita growth, except for the rest of the world. An improvement in the skills index by one unit
digital citizen dimension, proxied by individual usage. This may in Arab countries is associated with a decrease in the growth rate
be attributed to the fact that digital consumer adoption is mainly by about 0.19 percentage points. This signals deficiency in the
devoted to high levels of smart phones penetration and social capacity of the population to make effective use of ICTs.
media adoption, especially in less developed countries. The effect of
such phenomena is frequently argued to be minimal or destructive As for unemployment, all the indices of digitization are associated
to growth, especially when being mainly used in nonproductive with lower levels of unemployment, except for the political and
activities.

170 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 171
regulatory environment index, which is positively related to Table (15): Impact of Digitization on Growth and
Table 15 Unemployment, with Arab Country Dummy Variables
unemployment. This could be explained by the argument that
regulations could be job killing,56 especially in the short-run. The
Unemployment
introduction of new technologies, accompanied by enhancements GDPPC Growth
Variables Rate
in the political and regulatory environments and the development
of business activities, might change the mix of labor and capital, (1) (2)
and that change could decrease the amount of labor required for a Political and regulatory
0.901*** 0.680***
given unit of output. The most influential indices on unemployment environment
are the business usage index followed by business and innovation Business and innovation
0.332*** -1.647***
environment index and government usage index, since an environment
improvement in these indices by one unit is associated with a
Infrastructure 0.277*** -1.484***
reduction in the unemployment rate by nearly 2.7, 1.7 and 1.6
percentage points, respectively. This could be attributed to the Skills 0.0726 -0.724***
leading role of the business sector in creating new jobs due to digital Individual usage -0.228*** -1.604***
transformation. Finally, the least related variable to unemployment
is the skills index, as an improvement in this index by one unit is Business usage 0.254*** -2.782***
associated with a reduction in the unemployment rate by only 0.7 Government usage 0.766*** -1.634***
percentage points, keeping all other variables constant.
Political and regulatory
environment -0.160*** 0.140**
For the Arab countries, empirical results show that digitization is *Arab country dummy
significantly related to unemployment, but with lower magnitude
compared to the rest of the world. In other words, enhancement Business and innovation
environment -0.216*** 0.243***
of any aspect of digitization is associated with a reduction in
*Arab country dummy
unemployment rate, but this relation is less tight for Arab countries
by about 0.2-0.3 percentage points compared to the rest of the Infrastructure
-0.150*** 0.263***
*Arab country dummy
world. This is with the exception of skills and business usage
indices where their relation to unemployment in Arab countries Skills*Arab country dummy -0.191*** 0.0824
does not differ from that in the rest of the world. The coefficients
Individual usage
of the interaction terms of these two variables with the dummy *Arab country dummy
-0.129** 0.260***
of Arab countries are statistically insignificant. On the other
hand, the positive relation of the political and regulatory index Business usage
-0.206*** -0.110
*Arab country dummy
and unemployment is stronger in Arab countries compared to the
rest of the world. An improvement in the political and regulatory Government usage
-0.206*** 0.305***
index is associated with a decrease in the unemployment rate *Arab country dummy
by about 0.82 percentage points in Arab countries compared to Controls Yes Yes
0.68 percentage points in the rest of the world, assuming all other
variables are constant. Number of observations 537 660

Number of countries 142 144

56
https://publicpolicy.wharton.upenn.edu/issue-brief/v1n3.php#ftn15

172 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 173
Table (15) reports the coefficients of digitization indices and their Concerning unemployment, again all digitization dimensions are
interaction terms with the dummy variables for high and low associated with lower levels of unemployment, except for the
digital performance Arab countries. For economic growth, the political and regulatory environment. In Arab countries with low
results show that most of the digitization dimensions are positively digital performance, digitization and unemployment relate more
related to growth, except for the digital innovation, as well as skills strongly compared to the rest of the world, except for the innovation,
dimensions which have no significant effect on growth. The digital as well as the infrastructure dimensions, where their relationship
citizen dimension is still associated with lower growth. with unemployment does not differ from that in the rest of the
world. The negative relation of each aspect of digitization with
For Arab countries with low digital performance, political and unemployment is stronger by about 0.3- 0.5 percentage points
regulatory environments, as well as the government usage are in Arab countries with low digital performance compared to the
the only two aspects of digitization that are positively related to rest of the world, holding all other variables constant. Moreover,
growth, but with a lower magnitude compared to the rest of the the positive relation of political and regulatory environment and
world. An improvement in these indices by one unit is associated unemployment is lower in magnitude in these countries compared
with an increase in growth rates by about 0.8 and 0.7 percentage to the rest of the world by nearly 0.3 percentage points.
points respectively in the rest of the world, while Arab countries
with low digital performance witness an increase of only 0.5 and Impact of Digitization on Growth and Unemployment,
0.4 percentage points, respectively. However, other dimensions Table 16 with Dummies for Low and High Digital performance
of digitization correlate with lower growth in these countries. of Arab countries
Moreover, the individual usage index has a higher association with Unemployment
lower levels of growth in these countries by about 0.4 percentage GDPPC Growth
Variables Rate
points compared to the rest of the world. (1) (2)

As for Arab countries with high digital performance, the opposite is Political and regulatory
0.832*** 0.617***
environment
true. All digitization aspects are negatively related to unemployment,
but with a lower magnitude, compared to their effects in the rest Business and innovation
0.157 -1.867***
of the world, by about 0.3- 0.5 percentage points (except for environment
business usage index, since the coefficient of its interaction term Infrastructure 0.263*** -1.455***
is insignificant). However, the positive correlation of the political
and regulatory environment index with unemployment is higher by Skills -0.0159 -0.844***
nearly 0.2 percentage points in these countries compared to the Individual usage -0.249*** -1.580***
rest of the world.
Business usage 0.206** -2.825***

As for Arab countries with high digital performance (mainly Gulf Government usage 0.707*** -1.700***
countries), the effect of digitization on growth does not differ
from its effect in the rest of the world, since all the interaction Political and regulatory
terms with the high-performance Arab countries are statistically environment*low Arab country -0.281*** -0.263*
insignificant. This could be explained by the fact that Gulf countries dummy
are considered digitally advanced and have already achieved
high growth rates. Thus, further digitization and growth in these
countries would not differ from that in other countries of the world.

174 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 175
 • Estimation of digitization impact
Business and innovation
environment -0.361*** -0.157 Enhancing digitization and creating digital markets can result
*low Arab country dummy in considerable economic and social benefits to societies and
communities, through its potential to increase productivity,
Infrastructure
-0.331*** -0.185 accelerate growth, facilitate job creation, and enhance the
*low Arab country dummy
quality of life for society in general.
Skills
-0.332*** -0.285***
*low Arab country dummy

Individual Usage
-0.406*** -0.246**
*low Arab country dummy

Business usage
-0.385*** -0.532*** Macroeconomic Sectorial
*low Arab country dummy
Variables Impact
Government usage
-0.266*** -0.264*
*low Arab country dummy

Political and regulatory

environment 0.0478 0.221***
*high Arab country dummy

Business and innovation

environment 0.0154 0.374***
*high Arab country dummy Economic Job Education Public Healthcare
Growth Creation Sector
Infrastructure
0.0827 0.353***
*high Arab country dummy

Skills
0.0126 0.284***
*high Arab country dummy

Individual usage
*high Arab country dummy
0.0848 0.339*** Promote Social Manufacturing Trade Financial
Innovation & Welfare
Business usage Competition
0.0477 -0.0964
*high Arab country dummy
Figure 12 Macroeconomic and Sectoral Impact
Government usage
-0.0893 0.469***
*high Arab country dummy One can easily make a rough estimation of the impact of digitization
Controls Yes Yes on the Arab region by comparing the gap between the before and
after of digitization in the EU, China, Japan, etc. and consider this
Number of Observations 537 660 amount of change as the value by which the Arab economy will be
affected by digitization.
Number of Countries 142 144
Note: *** p<0.01, ** p<0.05, * p<0.1 The Arab world GDP is currently estimated at USD 2.6 trillion. The
following represents the main sectors and their contribution to the
GDP:

176 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 177
 Sectors Contribution to The digitization contribution on
Arab World GDP (%) The six economic sectors in us dollars

Wholesale Wholesale
& Retail Manufacturing Financial & Retail Manufacturing Financial

156 286 312 156 286 312

Agriculture Healthcare Education Agriculture Healthcare Education

130 182 130 130 182 130

Sectors Contribution to The effect of digitization on the local product

Arab World GDP (%) upon reaching the stage of complete
digital maturity in the Arab region

12% Financial Services

13%

11% Manufacturing

Others 54%
7% Healthcare

6%
Wholesale & Retail
5%
5% Agriculture
Education
Figure 14 Sectoral growth per sector as a result of Digital
Figure 13 Sectoral Contribution to GDP Economy applications

178 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 179
 List of Abbreviations and Acronyms: DLT: Distributed Ledger Technology
IP: Internet Protocol
SDGs: Sustainable Development Goals
SMTP: Simple Mail Transfer Protocol
ICT: Information and Communication Technology
RFID: Radio-Frequency Identification
GDP: Gross Domestic Product
API: Application Programming Interface
Organization for Economic Co-operation and
OECD: HNWIs: High-Net-Worth Individuals
Development
UK: United Kingdom
UNDP: United Nations Development Programme
DFS: Digital financial services
United Nations Department of Economic and Social
UNDESA: EHR: Electronic Health Record
Affairs
EU: European Union B2B: Business to Business
USA: United States of America B2C: Business to Consumer
IoT: Internet of Things eBSN: European e-business Support Network for SMEs
GCI: Global Competitiveness Index RTP: Rural Transport Program
EGDI: The E-Government Development Index DEI: Digital Evolution Index
IDI: The ICT Development Index R&D: Research and Development
TII: The Telecommunication Infrastructure Index Info-communications Media Development
IMDA:
Authority of Singapore
GCC: Gulf Cooperation Council
GovTech: Government Technology Agency
SMEs: Small and Medium-sized Enterprises
MDEC: Malaysia Digital Economy Corporation (MDEC)
ACDE: Arab Commission for the Digital Economy
BDA: Big Data Analytics
AUPA: Arab Union for Precision Agriculture
GP: Golden Projects
AIT: Arab Innovation and Technology Institute
GOP: Government Online Project
AeHO: Arab E-Health Organization
EFSI: European Fund for Strategic Investments
MAU: Modern Arab E-University
Communications Networks and Content and
KPIs: Key Performance Indicators CNECT:
Technology
HDI: Human Development Index
NDS: National Digital Strategies
O2O: Offline to Online or Online to Offline
SDSN: Sustainable Development Solutions Network
ID: Identification
GCI: The Global Competitiveness Index
LDCs: Least Developed Countries
DiGiX: The Digitization Index
UN: United Nations
BB: Broadband
NRI: Networked Readiness Index
IXPs: Internet Exchange Points
IT: Information Technology
CERT: Computer Emergency Response Team

180 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 181
 UNHCR: United Nations High Commissioner for Refugees European Bank for Reconstruction and
EBRD:
DIF: Digital Innovation Framework Development
ADIA: Arab Digital Innovation Agency IsDB: Islamic Development Bank
ATUA: ArabTech Universities Alliance AIIB: Asian Infrastructure Investment Bank
AIH: Arab Innovation Hub KFAED: Kuwait Fund for Arab Economic Development
REM: Registered E-Mail OPEC: Organization of Petroleum Exporting Countries
PSC: Points of Single Contact OFID: The OPEC Fund for International Development
MENA: Middle East and North Africa SFD: Saudi Fund for Development
AFEC: Arab Federation of E-Commerce United States Agency for International
USAID:
Development
AGTECH: Agriculture Technology
DBSA: Development Bank Southern Africa
WEF: World Economic Forum
IDRC: International Development Research Centre
FGLS: Generalized Least Squares
AFD: French Development Agency
WDI: World Development Indicators
WGI: World Governance Indicators JICA: Japan International Cooperation Agency

USD: United States Dollar Spanish Agency for International Cooperation and
AECID:
Development
CAPEX: Capital Expenditure
IFAD: International Fund for Agriculture Development
OPEX: Operational Expenditure
EIB: European Investment Bank
United Nations Educational, Scientific and Cultural
UNESCO: Arab League Educational, Cultural and Scientific
Organization ALECSO:
Organization
E-Gov: Electronic Government
AFESD: Arab Fund for Economic and Social Development
WHO: World Health Organization
AGFUND: Arab Fund Program for Development
ITU: International Telecommunication Union
IT: Information Technology
UNICEF: United Nations Children’s Fund
ADB: African Development Bank
WTO: World Trade Organization
UN ES- United Nations Economic and Social Commission
CWA: for Western Asia
United Nations Conference on Trade and
UNCTAD:
Development
IMF: International Monetary Fund

182 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 183
Honor List Participants in Preparation of the Strategy (Executive
Committee):
This is based on the unlimited support provided during the
preparation and subsequent stages, and contributed to spreading HE Prof. Ali Mohamad Al-Khouri - Advisor to the Arab Economic
and adopting the “Arab Vision for Digital Economy” through various Unity Council – League of Arab States
regional and international platforms:
Dr. Mahmoud Al-Saeed - Dean of the Faculty of Economics and
Political Science - Cairo University, Egypt
HE Prof. Ahmed Aboul Gheit - Secretary General, League of Arab
States Dr. Adela Ragab - Director of the Center for Economic and Financial
Research and Studies - Faculty of Economics and Political Science
HE Ambassador Mohamad Mohammad Al-Rabeeh, Secretary - Cairo University, Egypt
General, Arab Economic Unity Council, League of Arab States
Dr. Nagwa Samak - Head of the Economics Department and Head
HE Ambassador Hussam Zaki - Assistant Secretary General, of the Research Team from Cairo University - Faculty of Economics
League of Arab States and Political Science - Cairo University, Egypt

HE Prof. Mohamed Osman Elkhosht, President of Cairo David Eaves - Lecturer of Public Policy at John F. Kennedy School -
University, Egypt Harvard University, USA

Katie Ragan - John F. Kennedy College - Harvard University, USA

Special thanks is extended to the Arab Vision for Digital Economy
committee and specifically the efforts of HE Prof. Ali Mohamad Phil Pollman - John F. Kennedy College - Harvard University, USA
Al-Khouri, for his countless efforts in this project in terms of his
knowledge contribution and general guidance and coordination of Dr. Hisham Danana - Vice Chairman, EFESO, Paris, France
the efforts of all parties, and his active role in managing, preparing
and reviewing the Arab Vision for Digital Economy. Ayman Ghoneim - Strategic Planning Advisor - Arab Federation for
the Digital Economy, UAE

Patrick Osta - Technology Advisor - Arab Federation for the Digital

Economy, UAE

Dr. Umniah Helmy - Faculty of Economics and Political Science -

Cairo University, Egypt

184 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 185
Dr. Mona Badran - Faculty of Economics and Political Science - Vincenzo Aquaro - Head of the E-Government Sector in the United
Cairo University, Egypt Nations Department of Development and Social Affairs, United
Nations, USA
Dr. Hanan Nazeer - Faculty of Economics and Political Science -
Cairo University, Egypt Richard Kerby - International expert in digital transformation and
government development - Former United Nations Senior Inter-
Dr. Mona Essam - Faculty of Economics and Political Science - Cairo Regional Adviser, USA
University, Egypt
Barbara Ubaldi - Director of the Digital Government and Open Data
Dr. Salwa Abdel Aziz - Faculty of Economics and Political Science - Unit - International Economic Cooperation Organization, France
Cairo University, Egypt
Gregory Curtin - Global Advisory Board - Future of Urban
Dr. Asma Ezzat - Faculty of Economics and Political Science - Cairo Development and Services - World Economic Forum - United
University, Egypt States, USA

Hanan Kinan - Senior Consultant - EFESO, . France Gianluca Mysoraca - Senior Expert at the European Commission -
Joint Research Center, Spain
Maryam Taha - Consultant – EFESO, France
Khaled Abdel Shafi, Regional Programs Officer, United Nations
Coordination with International Advisory Group: Development Program - Arab Countries, UAE

Richard Kerby - International expert in digital transformation and Samia Melhem, Senior International Expert, Digital Development,
government development – Former United Nations Senior Inter- World Bank, United States, USA
Regional Adviser, USA
Nibal Idlib, Head of the Technology for Development Division, Head
Patrick Osta - Technology Advisor - Arab Federation for the Digital of Innovation, UN-ESCWA, Lebanon
Economy, UAE
Ayman El-Sherbiny, Head of Information and Communication
International Advisory Committee: Technology Policy Division, ESCWA - United Nations, Egypt

Organizations Khaled Wali, Director of Information and Communication

Technology Department, League of Arab States, Egypt
Mourad Wahba, Assistant Secretary-General of the United Nations
and Regional Director of the United Nations Development Program, Peter Diry - Digital Policy Advisory Minister - European Union
United States, USA Delegation to the United Arab Emirates,

Hani Torky, Senior Technical Adviser, Regional Office for Arab

Countries, United Nations Development Program, United States

186 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 187
Gregory Curtin - Global Advisory Board, Future of Urban Siim Sikkut - Head of Government Information Unit - Government
Development and Services, World Economic Forum, United States of Estonia, Estonia

Morten Meyerhof Nielsen - Digital Government Advisor - United Anir Chowdhury - Policy Adviser - Access to Information (A2i)
Nations University Operating Unit for Policy-Based Electronic Government of Bangladesh, Bangladesh
Governance (UNU-EGOV), Estonia
Khaled Salami, Director of the Digital Government Unit, Government
Alain Nkoyock, President and Chief Information Systems Officer, of Tunis, Tunisia
United Nations, Austria
Samia Shoukry, Director of Information Systems, Ministry of
Taghreed Hassan Badawood, Head of International Relations, Arab Administration Reform and Public Service, Morocco
Administrative Development Organization (ARADO), Egypt
Amr Badawi, Former President of Telecommunications Regulatory
Governments Authority, Telecommunications Regulatory Authority, Egypt

HE Atef Helmy, former Egyptian Minister of Communications and Geert Mareels, Director of the Digital Archives, Government of
Information Systems, Egypt Belgium, Belgium

Ruqaya Dirham - Secretary of State to the Minister of Industry, Bill McCluggage - Former Chief Information Officer, Government of
Investment, Trade and Digital Economy, Morocco Ireland, Ireland

His Excellency Habib Dababi - Secretary of State to the Minister of Mustafa Afyonluoglu - Head of E-Governance, Cybersecurity and
Communication Technologies and Digital Economy, in charge of the Capacity Development Department, Turkey
Digital Economy, Tunisia
Universities and Research Centers
Mukul Agrawal Director of Citizen Services Innovation, Department
of Human Services, Australia John Haigh - Harvard University, United States

Suvi Lindén - Former Finnish Minister of Communications and Jessica Dheere - Harvard University, United States
Member of the European Union Broadband Commission, Switzerland
Bruce Schneier - Harvard University, United States
Chris Ferguson - Director - National and International Research -
Cabinet Office - Government Digital Service, United Kingdom Mathias Risse - Harvard University, United States

Yolanda Martinez - National Digital Strategy Coordinator - Tom Wheeler - Harvard University, United States
Government of Mexico, Mexico
Dr. Fadi Salem, Director of Policy Research and Consulting, Dubai
Zhanat Zhakhmetova - Vice Minister – Ministry of Petroleum and School of Government Administration, UAE
Energy, Kazakhstan

188 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 189
Salam Yamout - Director of the Middle East Regional Office for the Dr. Jay Bal - Professor of Computer Science - University of Warwick,
former Internet Society, Lebanon UK

Birgitte Andersen - Executive Director - Great Innovation Center, Driss Kettani - Professor of Computer Science - The American
UK University in Afrane, Morocco

Ronald van Loom - Founder and President - Institute for Digital Catherine Garcia-van Hoogstraten - Lecturer and Researcher in
Transformation, Netherlands Data Management, Cybersecurity, Technology and Digitization
of the Public Sector - School of Public Administration, Law and
Theresa Pardo – Director of the Center for Technology in Security - The Hague University of Applied Sciences (THUAS),
Government - SUNY Albany University, USA Netherlands

Anne-Rachel Inné - Executive Director, Government Affairs and Prof. Philippe Baumard - Visiting Professor of Organizational
Public Policy at the American Registry for Internet Numbers Theory and Forensic Sciences at CNAM Stanford, Berkeley, New
(ARIN), USA York University, USA

Travis Hunter - Director of the MIT Regional Entrepreneur Jeanne Holm - Professor of Data Science - UCLA University, USA
Accelerator Program - Massachusetts Institute of Technology -
United States Muhammad Farmer - CEO and Founder - British Institute of
Technology and E-commerce, UK
Stuart P Krusell - Lecturer in Behavioral Sciences and Policy -
Massachusetts Institute of Technology - United States Muhammad Khurram Khan - Professor of Information Security -
Center of Excellence in Information Security - King Saud University,
Phil Budden - Technology, Innovation and Entrepreneurship / Saudi Arabia
Strategy Lecturer - Massachusetts Institute of Technology, USA
Prof. Ahmed Bonfour, Professor, Coordinator of the Networks
Soumaya Ben Dhaou - Research Fellow - United Nations University Research and Innovation Group, Universite Paris Sud , France
E-Governance Unit (UNU-EGOV), Portugal
Consulting Agencies
Anushka Siddiqui - Harvard University, USA
Tom Miller - Director of Stuart & Deville Consulting, UK
Naeha Rashid - Harvard University, USA
Thierry Delville - Partner of PWC France, France
Jane Fountain - Director, National Center for Digital Government -
University of Massachusetts, USA Abdullah Al-Hamid, Managing Director, INTERMID, Bahrain

Yousaf Darr - Internet Security Lecturer and Consultant, UK Ravi Gupta - Founder and CEO - Elets Technomedia Pvt Ltd, India

David Gurteen - Professor of Knowledge Management - Coventry

University, UK

190 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 191
Marc Ribes - Expert in Information and Communication Technology
and E-Government Development Strategies Consultant, France

Mark Madsen - Founder and President, Third Nature Foundation,

USA

Richard Labelle - ICT, innovation and digital technology expert -

Luvent Consulting, Canada

Holger Muller - Vice President and Senior Analyst, Constellation

Research Inc., USA

Julia Glidden - Corporate Vice President, Strategy and Operations,

Worldwide Commercial Business - Microsoft, USA

John Wells - Director - Cofluence Pty Ltd, Australia

Joshua Chambers - Founder, GovInsider, Singapore

Pierre Fau - Director, Abelum, France

Anurag Saxena - Global Head of Strategic Initiatives - MicroSave

Consulting, India

Anys Boukli - Founder and CEO - Digital Partners SA, Switzerland

Ezio Lattanzio - Founder and CEO - LATTANZIO KIBS, Italy

Sophia Boyer de la Giroday – President, Wise Media, Switzerland

Eric Kavanagh – Chief Executive Officer, Bloor Group, USA

Charles Coupet - Enterprise Architecture, Oracle Corporations, USA

Susie Ruston McAleer - Founder and President - 21st Century

Consulting, UK

Wyatt Kash - Vice President - Scoop News Group, USA

Ian Patterson, Chief Data Officer, Consultant, United Kingdom

192 ARAB DIGITAL ECONOMY VISION ARAB DIGITAL ECONOMY VISION 193
His Excellency Ahmed Aboul-Gheit,
Secretary General
Secretary General of
of the
the League
League of
of Arab
Arab States
States
Excerpts from the speech delivered during
Excerpts from the speech delivered during thethe inauguration
inauguration of
of the
the Arab
Arab Digital
Digital Economy
Economy conference
conference in
in
Abu Dhabi,
Abu Dhabi, December
December ‫ِىوي‬.
‫ِىوي‬.

The rapid
The rapid andand successive
successive developments
developments in
in information
information technology,
technology, that
that our
our world
world is
is witnessing
witnessing today,
today, will
will
result in
result in aa new
new type
type of
of economy,
economy, which
which is
is widely
widely referred
referred to
to as
as the
the ‘digital
‘digital economy’.
economy’.

The digital
The digital economy
economy has
has come
come to
to play
play aa significant
significant role
role in
in achieving
achieving sustainable
sustainable development
development goals
goals through
through
creating real
creating real investment
investment opportunities
opportunities in in all
all fields
fields and
and sectors,
sectors, as
as well
well as
as in
in achieving
achieving digital
digital inclusion,
inclusion, in
in
aa way
way that
that supports
supports economies
economies inin keeping
keeping pace
pace with
with global
global economic
economic modernity.
modernity.

Indeed, we
Indeed, we are
are facing
facing aa comprehensive
comprehensive revolution
revolution driven
driven byby digital
digital technologies,
technologies, ledled by
by the
the development
development
of artificial
of artificial intelligence
intelligence and
and big
big data.
data. Some
Some call
call itit the
the Fourth
Fourth Industrial
Industrial Revolution;
Revolution; toto show
show the
the intensity
intensity of
of
its impact
its impact onon various
various aspects
aspects ofof life.
life. In
In fact,
fact, there
there is is aa wide
wide international
international agreement
agreement on on the
the fact
fact that
that the
the
impact of
impact of the
the Fourth
Fourth Industrial
Industrial Revolution
Revolution will will be
be more
more powerful
powerful than
than those
those in
in the
the past.
past.

In today’s
In today’s fierce
fierce global
global competition
competition game,
game, ourour countries
countries cannot
cannot afford
afford getting
getting outout ofof this
this era
era
empty-handed, or
empty-handed, or even
even retarded
retarded in
in late
late ranks.
ranks. As
As creativity
creativity and
and innovation
innovation are
are the
the main
main drivers
drivers of
of this
this
new revolution,
new revolution, our
our Arab
Arab world
world finds
finds itself
itself facing
facing two
two options;
options; whether
whether toto innovate
innovate or
or to
to extinct.
extinct. Either
Either we
we
rush to
rush to prepare
prepare our
our educational
educational systems
systems and and our
our employment
employment markets
markets to
to keep
keep pace
pace with
with these
these profound
profound
changes in
changes in the
the structure
structure of of the
the modern
modern economy,
economy, or or that
that we
we risk
risk marginalization
marginalization andand slow
slow down
down andand pay
pay
the subsequent
the subsequent bill.
bill.

We cannot
We cannot accept
accept current
current performance,
performance, for for example,
example, that
that of
of our
our ecommerce
ecommerce market
market share
share which
which does
does not
not
exceed ْ‫ى‬
exceed ْ‫ ى‬of
of the
the global
global marketplace.
marketplace. ItIt is
is also
also no
no longer
longer acceptable
acceptable that
that the
the Arab
Arab citizen
citizen is
is not
not able
able to
to deal
deal
effectively with
effectively with the
the financial
financial technology
technology applications
applications that
that are
are invading
invading the
the banking
banking world
world atat an
an
unprecedented rate
unprecedented rate of
of acceleration.
acceleration.

ItIt has
has become
become clearer,
clearer, the
the increasing
increasing impact
impact of
of synergy
synergy between
between technology
technology applications
applications in
in the
the field
field of
of
communications and
communications and banking,
banking, as as technological
technological applications
applications play
play aa crucial
crucial role
role in
in achieving
achieving financial
financial
inclusion and
inclusion and digital
digital inclusion
inclusion in
in wider
wider sense.
sense.

The time
The time has
has come
come for
for Arab
Arab countries
countries to
to take
take advantage
advantage of of their
their abundant
abundant human
human capabilities,
capabilities, the
the very
very
important geographical
important geographical locations,
locations, and
and the
the sufficient
sufficient financial
financial and
and geological
geological resources
resources to
to achieve
achieve the
the
desired renaissance,
desired renaissance, and
and place
place our
our countries
countries in
in the
the levels
levels they
they deserve
deserve among
among the
the developed
developed countries.
countries.

ISBN 978-9948-34-341-7
Arab Vision for Digital Economy
22nd Print - V 3.0
3.0 - January 2020
2020