Here are the foundational elements of Middle East’s digital economy

As we look to the close of 2021, the digital economy has truly taken shape in the Middle East. The backbone of this digital economy is a new era of hyperconnectivity; one that is enabled by robust investments in digital infrastructure.

This evolution is not by chance. It results from deliberate efforts by regional industry and government leaders to lay a foundation for economic and social transformation. At the government level, in particular, Middle East countries have recognised the transformational power of the digital economy and have made ICT a cornerstone of their growth strategies and national visions even before the pandemic.

Key to realising these gains in the year ahead will be the expansion of 5G applications for industry, the greening of ICT infrastructure, and the fostering of digital talent across the Middle East.

Beginning at the network
The Middle East has in fact made significant progress in the adoption of digital technologies over the last decade. A great example of this is how organisations in the region have prioritised 5G rollouts. Several regional telecom operators were among the earliest adopters of the technology globally. The number of 5G subscribers in GCC countries alone is estimated to exceed 10 million by the end of 2021.

Underpinning this investment is the realisation that 5G goes beyond mere communication. Since the pandemic, industry digitisation and online business have gained strong momentum. The next important step in 5G development is 5GtoB – applying 5G technologies to all industries.

In this model, 5G will have a lasting impact on national economies, employment, and industrialisation. Already we see incredible 5G use cases emerging in the region in domains such as Industry 4.0, smart city services, and much more. Other 5G applications in manufacturing, mining, and ports have already passed the trial phase and are being replicated at scale. At the same time, 5G enables social change and progress through advancing education, healthcare, and inclusion. We estimate that there are already 10,000 projects exploring B2B applications of 5G worldwide in the enterprise space.

Leaning into sustainability
As core infrastructure like 5G expands across the region, optimising ICT infrastructure with sustainability in mind is necessary to achieving a prosperous digital economy. By 2030, humanity will enter the era of YB (1 YB = 1000 ZB) data. The proliferation of data will result in increased energy consumption challenges to ICT infrastructure. According to data economy forecasts, the world’s data centres will consume a fifth of the earth’s power by 2025. In parallel, the cloud is now central to the realisation of the digital economy. Because of developments in cloud and digital sovereignty, many countries have accelerated the construction of data centre facilities. These realities highlight the urgent need to build green, efficient, and intelligent ICT infrastructure that transforms resources like data centres into sustainable, low-carbon engines of the digital economy. For example, through a combination of AI and power electronics technologies, we can now reduce power usage effectiveness (PUE) for data centres from 1.45 to 1.2, which is very competitive in the industry.

Developing future talent
When we consider the anticipated growth of ICT infrastructure – and the need for this to be managed sustainably – we come to an issue that is at the crux of the digital economy equation: talent development. All countries in the region now recognise that more robust skills development is essential for the digital economy. Of course, closing the digital skills gap is multifaceted. Digital enterprises are increasingly investing in technologies such as robotic process automation, AI and machine learning capabilities to ease pressure on tech talent. Accelerated public investment in STEM education – such as the examples given in coding, AI, and others – is also redesigning knowledge exchange for the digital era. Equally important is how technology companies engage with the broader ICT ecosystem to help develop talent. At Huawei alone, programmes such as our Seeds for the Future initiative, our annual ICT competition, the ICT Academy, and others are now producing skilled digital practitioners together with the public sector. Many of these individuals are quickly embraced within the region’s digital economy.

A new economic paradigm
The expansion of 5G applications for industry, the greening of ICT infrastructure, and the fostering of digital talent across the Middle East are important foundational elements of the digital economy. These subjects have never been more important to the world as our society has become more connected and more interdependent than ever before. As these three forces create a new economic paradigm in the Middle East, the prosperity of nations will depend on continued advancements in knowledge, innovation, and technology.

At Huawei, we are in a position to help drive this next wave of innovation in the digital economy. We are leveraging R&D investments that have exceeded $110bn over the past decade. We are also directing many investments into joint innovation programmes – including many in the Middle East – together with governments, academia and private sector partners. Through open collaboration and seeking shared success, these efforts will not only help countries reach underserved segments of their populations, but will have far-reaching impacts on economic competitiveness, employment creation and sustainable development.