Middle East: Transforming into a Leading Digital Economy

Middle East: Transforming into a Leading Digital Economy


Digitization is gripping every geography and business. It is contributing to industry growth that is leading towards massive business expansion across the world. The Middle East isn’t far behind. It is a pivotal opportunity and moment for the region to transform itself into a leading digital economy. However, this will require comprehensive, concrete and collaborative action.

The Middle East is steadily progressing towards a massive digital revolution. Countries like Qatar, UAE and Bahrain are leading the charge with high usage of social media and increasing smartphone penetration. All these are leading the region to reinvent itself and take the charge towards becoming digital.

  • UAE, Qatar and Bahrain are among the top countries with more than 100% smartphone penetration and over 70% of social media adoption, which is higher than United States.
  • Some Middle Eastern governments are spearheading the implementation of core digitization initiatives.
  • Digital transformation has the potential to add over $90 million annually to Middle East’s GDP by 2020.

Data Speaks

Digitization of the Middle East region is simply not a passing trend. It is a revolution and it is here to stay picking up speed each day. The region has invested heavily in digital age, among customers.

  • In UAE, 70-80% of the consumers are carrying a smartphone.
  • The Middle East and North Africa region (MENA) ranks only second in number of daily YouTube video views at over 310 million. 
  • MENA region is among the fastest growing consumers of videos on Facebook. 
  • 50% of the population falls under the age bracket of 25. The tech savvy youth of the Middle East will boost the digital adoption rate in years to come.

The above data points towards the propagation of better feature phones and social media consumption along with increased access to mobile internet. This means companies specializing in mobile app development will be gaining new business and business shall find new ways to reach, inspire, and educate a new generation of the 21st century. Mobile app development companies in Middle East.

On the business front, the progress still needs to pick up speed. According to a recent survey:

  • Only 18% of the Small and Medium Sized businesses (SMBs) in UAE, 15% in Saudi Arabia, and meager 7% in Egypt have an online presence. However, more and more business processes and activities are being digitized.
  • It is projected that by 2019, Middle East and Africa will have the world’s highest cloud traffic growth rate at 41%. 
  • The current wave of digitization encompasses recent innovations in big data, internet of things (IoT), virtual reality etc.

Despite the higher rate of smartphone adoption in countries like United Arab Emirates, Bahrain and Qatar, owing to lower percentage of penetration in the overall Middle East region, the overall smartphone reach is considerably low. The current rate of smartphone adoption rate of the two third Middle East population is only 20%; however, estimates suggest that by 2020, the region will reach to 60% of the overall smartphone adoption rate which will be in line with the rest of the world.

Fragmented IT Industry

As of now, Middle East has small and fragmented IT companies. The top public traded IT companies of the Middle East do not rank in the top 600 by revenue. However, looking towards the next generation of IT players, the percentage of growth is quite slim. Mobile app development companies in the Middle East need to rise up in terms of growth and expansion in the world.

The number of startups registered at Angel List indicates that 1 startup per day is established in Middle East as compared to over 60 in the United States. Reason being, economies in the region are adoption digital trends differentially with large variations.


The prevalent gap between consumer usage and digitization among business and government sectors as well as supply and innovation proves that there is huge potential for digital growth in near future. The reason being, customers are primed and ready to embrace new digital offerings. In addition, the demographic data proves that the tech savvy youth in the Middle East will boost up digital adoption in times to come. 

Going digital can have a significant impact on an economy and its society. It contributes effectively to economic growth, job prospects and is a key enabler of productivity. Leaders in the Middle East region recognize the impact that digital can make in the nation and hence are increasingly supporting visions and strategies to adopt new technology.