Middle East and Africa firms to spend $30bn on digital transformation

Experts caution that the region is facing a talent shortage, which could delay the process of digital transformation

Artificial intelligence is expected to contribute up to $182bn to the UAE's economy by 2035, according to Accenture

di Alkesh Sharma

Organisations in the Middle East and Africa are expected to spend $30 billion on digital transformation this year, driven largely by industries such as banking and energy.

«Total IT spend in the MEA will be $90bn in 2020 and one-third of this will directly go towards digital transformation initiatives,» Jyoti Lalchandani, group vice-president and managing director for MEA and Turkey at International Data Corporation, told The National.

The Massachusetts-based research company is expecting significant growth in technology investment in the coming years and projected that spending will grow at a compound annual rate of 18 per cent in the region over the next four years.

With more number of industries, such as banking and energy, leveraging new technologies to transform their operations, « there would be a significant rise in digital transformation spending» said Mr Lalchandani.

The banking and finance industry will spend $13.23bn on technology this year but IDC forecasts this figure will reach $15.4bn by 2023, growing at a compound rate of 4.7 per cent.

Resource industries - including oil and gas mining - will spend $5.33bn on technology this year. This is predicted to grow to $5.79bn over the next three years.

Dubai Internet City, one of the investment zones in the emirates, foresees lack of good talent as a hindrance in the ongoing digital transformation drive.

«Our government is pushing digital transformation in a big way and positive results are before everyone… Dubai Internet City is also playing a crucial role in attracting new talent and technologies,» said Ammar Al Malik, managing director of DIC. «But we still need to do more and the industry is facing a talent shortage,» said Mr Malik.

Currently, more than 25,000 people are working at DIC and the authorities expect this number to reach 40,000 in the next six to seven years.

Korn Ferry, a Los Angeles-based management consulting firm, predicted that there will be a global tech talent shortage of more than 85 million people, which is roughly equivalent to the population of Germany, over the next ten years. This could result in $8.5tn in unrealised revenues, it added.

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