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Overseas ambitions: global companies capitalising on Middle Eastern promise

Overseas ambitions: global companies capitalising on Middle Eastern promise

Key factors to consider when applying digitalisation across a vibrant and fast-changing part of the world

Overseas ambitions - Stephan Klink

Stephan Klink

Head of Commercial Expansion and Enablement

Digitalisation is transforming the economies of countries across the richly diverse region that is the Middle East. Whether it’s smarter transport systems or the delivery of remote healthcare services, new levels of connectivity are resulting in products and services which are changing the way that millions of people go about their daily lives.

Nowhere is this transition to smarter living more vivid than in Saudi Arabia, a country which for the past 50 years has depended on oil to power its economy. Now, Saudi Arabia is looking for new ways to diversify away from petroleum and create new digital jobs across a wide range of industrial sectors including automotive, manufacturing, energy, retail and healthcare.

Other countries in the region have similar ambitions: the UAE plans to make Dubai the smartest city in the world, while Qatar is investing heavily in connected infrastructure initiatives in view of the [football] World Cup 2022.

In Turkey, meanwhile, demographic trends are driving a rapid expansion of the country’s internet economy, with a host of initiatives aimed at providing businesses and individuals with secure and robust access to online services via mobile-based solutions. And Egypt – with the largest population in the region – is delivering on its enormous potential for digital growth, having undergone a significant upgrade to its networks.

This drive towards digitalisation is providing significant growth opportunities for the Internet of Things (IoT). The market for IoT in the Middle East is set to double in size by 2021, according to a report from research analysts International Data Corporation (IDC). This is attracting many international organisations who are looking to launch new digital services.

However, building a long-term strategy in an extraordinarily diverse region requires knowledge of multiple factors including variances around regulation, data-sharing and privacy laws. The Middle East is a dynamic and vibrant part of the world for IoT, but there are national influences that need to be considered when making deployment decisions.

Different countries have different laws: The Middle East remains an economically diverse region. Some countries are more open to inward investment than others and are therefore developing their digital infrastructures at different speeds. The economies of each country differ greatly across the regions, and that can have a major impact on the pace of IoT adoption. Taxation and import duties, for instance, vary considerably, presenting vital considerations for foreign organisations looking to invest.

Regulatory knowledge is invaluable: Rules and directives around issues such as data protection, privacy and national security can present obstacles to international organisations looking to extend their IoT reach or bring new products to market. Companies that are able to treat data consistently across their international operations can innovate more rapidly, achieve larger scale and reduce costs. Requirements in some parts of the Middle East for companies to store and process data domestically can therefore create unnecessary duplication. Seeking partnerships with IoT providers with knowledge of regulatory diversity is therefore key.

Access to overseas investors: Significant efforts have been made to enhance the rules around setting up businesses in the Middle East, with better regulations to protect intellectual property and patents. Licence approvals are still a factor, though, with applicants expected to demonstrate financial, technical and operational capabilities. This is particularly true for IoT start-ups looking to enter highly-regulated sectors such as healthcare.

Personal relationships matter: The Middle East is very different to Western markets in terms of the size and make-up of its industrial base. A high percentage of SMEs mean business relationships tend to be built on trust and understanding, and so the formation of local partnerships is seen as being vital. The speed of decision-making can be noticeably slower than in Western markets, especially in relation to technology-focussed markets such as IoT, where its acknowledged that real value can be delivered through upskilling.

Global players have big ambitions

All-in-all, the Middle East offers fantastic opportunities for IoT – both for international businesses wanting to extend their IoT reach and for those looking to bring new products to the market. The region, as a whole, is a youth-driven growth market, whose tech-savvy netizens are quick to recognise the benefits that improved connectivity can bring. The potential size of the prize for IoT in the Middle East makes it increasingly attractive for global companies. But with business and regulatory factors needing to be carefully considered, the decision around choosing the right IoT partner in the Middle East should be supported by knowledge, experience and partners on the ground.

Vodafone is in a unique position to meet such criteria, having established a strong presence in all key growth countries in the region. This means our customers are provided with the necessary products, resources and support to ensure successful IoT deployment, whatever the application.

Read our New Horizons whitepaper and find more about deploying successful IoT projects in the Middle East.

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