Saudi Arabia ranks 19th globally in creating a competitive ICT market

Saudi Arabia ranks 19th in terms of creating a competitive market, affordable services and excellent quality of service

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The Kingdom of Saudi Arabia ranks 19th in terms of creating a competitive market, affordable services and excellent quality of service thanks to the country’s significant investment into ICT, Huawei said recently in its Global Connectivity Index (GCI) report.

As the only country named in the GCC, Saudi Arabia scored well in embracing digital reformation where businesses are most likely to have created and is in the process of executing company-wide transformation, recognizing ICT as the core enabler, the report noted.

At its annual Cloud Congress (HCC) held in China, Huawei released the GCI report that details the commitment and progress that various countries have made in bettering their own connections and the impact it is having on GDP.

The findings detail 25 developing and emerging countries, which account for 78 percent of global GDP and 68 percent of the world’s population. It reviews 10 industries including finance, manufacturing, education, transportation and logistics, providing a quantitative assessment of connectivity and its value from both national and industrial perspectives.

According to market intelligence firm IDC, Saudi Arabia is the biggest ICT market in the Middle East accounting for more than $7 billion in predicted spending in 2014, with the public sector allocating $1.63 billion to improve government services, education, healthcare and transportation amongst others.

Huawei forecasts that by 2025, as many as 100 billion connections will be generated globally, 90 percent of which will come from intelligent sensors. This increase will be attributed to enterprises becoming enabled by the Internet. By leveraging connectivity to streamline business processes, reduce costs and improve efficiency, enterprises will drive innovation and move the focus from a consumer driven Internet to an industrial one.

During the Huawei Cloud Congress, William Xu, Chief Strategy and Marketing Officer, Huawei said, “Focusing on Pipe Strategy, Huawei has remained dedicated to enhancing connectivity and communications. Today, our products and solutions enable close communication for a third of the world's population. The global expertise we have enables us to challenge how connectivity can be developed in a scientific, comprehensive and objective manner.”

Enterprises from both developed and emerging countries were included in the study, providing data across ten industries including finance, manufacturing, education, transportation and logistics, while also assisting with analyzing the findings and identifying trends.

The GCI study found that country connectivity correlates with GDP, with Huawei’s analysis of 16 indexes showing that for each GCI percentage point increase the GDP per capital increases 1.4–1.9 percent, relatively higher for emerging countries. Among the countries surveyed, Germany ranks first due to its strong commitment and ongoing investment in information and communications technology (ICT) development, resulting in a market with competitive vitality.

The study also found that developing countries have also started to accelerate growth by investing strategically in ICT capabilities. The GCI report showed developing countries such as Chile, Kenya and Egypt had the highest growth momentum. Through centralized planning, potential connectivity can be fully leveraged and ICT capabilities will support positive growth of national economies.

The report looked at how different enterprises invest in and gain value from ICT to further identify why some industries are undergoing a digital transformation while other are not. In this process, the report was able to allocate each industry to one of four quadrants, Transformers, Strategists, Tacticians and Stragglers. It identified that Transformers regard ICT as a core driving force for business transformation and continuously invest and proactively reshape their ICT business models. Industries such as finance, education, oil and gas and manufacturing demonstrate ICT enabled transformation. With 71 percent of finance enterprises indicating their ICT investment will increase by more than five percent over the next two years, it is the highest ranking industry for development. The GCI reports that 65 percent of enterprises plan to increase their ICT investment over the next two years.

Mobile broadband, cloud computing, Big Data and the Internet of Things (IoT) are the four technological engines that most enterprises aim to focus on when completing ICT enabled transformation. Huawei forecasts that by 2020, global ICT spending will increase to approximately US$5 trillion. Today, ICT technologies based on connectivity remains significant as a support system, but this traditional role is giving way as ICT becomes increasingly integrated with production systems, driving value creation. Connectivity has become a new factor for production in addition to land, labor, capital, and technology.

William Xu added, “It is our hope that the GCI will not only indicate ICT investment and development in various countries and industries but, more importantly, serve as a reference for industry policymakers and enterprise decision-makers. Looking ahead, Huawei will continue to work closely with industry partners to facilitate closer connections between people and people, people and things, things and things, creating a Better Connected World.”

This article was first published in the Saudi Gazette on September 30, 2014.

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