The UAE has increased equity investment in technology firms from $100 million to $1.7 billion in just two years
UAE tops Arab world in competitiveness
The UAE, which leads the Arab region in terms of competitiveness, and is home to many tech firms, needs to increase efforts to expand the use of latest digital technologies to further enhance its dominance.
Research by the World Economic Forum shows that by 2020 one in five jobs in the Arab world will require digital skills. Its report assessing the future of employment and skills requirements in the Middle East and North Africa region estimates 47 per cent of all work activity in the UAE faces increased automation.
“Diversifying the economy, developing the private sector and creating opportunities for the youth will require increasing the innovation content of the non-oil sector and navigating through the Fourth Industrial Revolution, said the Arab World Competitiveness Report 2018. It was released by the World Bank Group in association with World Economic Forum this week.
The revolution is characterised by the range of new technologies that are fusing the physical, digital and biological worlds.
While some Arab countries have already put in place long-term strategies and heavy investments, “the entire region still has to fill the gap with the rest of the world when it comes to adopting and developing the most advanced technologies and the industries of the future”.
The UAE has increased equity investments in technology firms from $100 million to $1.7 billion in just two years, according to the report’s findings. In a bid to minimise its reliance on hydrocarbons, Abu Dhabi government-owned Mubadala Ventures, the venture capital arm of Mubadala Investment Company, will invest $1bn in local and global technology start-ups by 2021. Mubadala also aims to create a $400m fund to invest in leading European technology companies.
In the report, the UAE is ranked 17th globally in terms of competitiveness and it is followed by Saudi Arabia (30th), Kuwait (52) and Oman (62).
The survey says that Arab economies urgently need to diversify and foster entrepreneurial freedom to increase opportunities for young people and prepare the region for the technological transformations ahead. “Further progress will require Arab societies to rethink their existing social and economic models in order to increase competitiveness,” it said.
Concerns about cyber-dependency have increased dramatically in the resource-rich economies, meaning this trend has the third-highest potential impact on the region, the report said.
“In the UAE, half of companies are worried about cyber attacks (up from about 30 per cent in 2016),” the report said. One in five (up from one 10 in 2016) regards data fraud as one of the major risks.
“Large increases in concern were also observed in Bahrain and Saudi Arabia,” added the report.
Because of fluctuating oil prices over the past few years, countries in the region have been forced to take measures to stabilise fiscal budgets and facilitate private-sector development beyond oil. Last year, 40 per cent of businesses in the UAE were concerned about energy price shocks; while it was 42 and 46 per cent in Kuwait and Saudi Arabia, respectively. The report did not provide comparative figures for 2016.
“The world is adapting to unprecedented technological changes, shifts in income distribution and the need for more sustainable pathways to economic growth,” said Mirek Dusek, deputy head of geopolitical and regional affairs at the WEF.
“Diversification and entrepreneurship are important in generating opportunities for the Arab youth and preparing their countries for the Fourth Industrial Revolution.”