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UAE IT Market Set for Strong Growth

DUBAI — A Dubai Chamber of Commerce and Industry, or DCCI, analysis based on a recently-released Business Monitor International report, forecasts that the $3.2 billion IT market in the UAE, is to witness steady growth and become a leader in 
the region.

Fundamental drivers for this market include local and federal government initiatives and development of the non-oil sectors, which include real estate and tourism. Government spending and investment will provide support to the IT market.Positive growth due to these drivers should prevent stagnation of the UAE IT market due to the downturn.Therefore, the total size of the UAE IT market is expected to grow from $3.2 billion in 2009 to $4.7 billion in 2013.

The UAE internet penetration estimated to be at 54.3 per cent by the end of 2008, is far above the average for the Middle East and North Africa region. This highlights UAE’s position as one of the most advanced IT countries in the region. Dubai has traditionally been a re-export centre for consumer electronic items, with traders now assembling their own PCs. However the size of the domestic market is also increasing, driven by growing SME spending.

For domestic products, mobile computers and note books are becoming increasingly popular. Notebooks have become popular partly due to promotions and features such as wireless internet PC cards.

The UAE computer market remains dominated by international players with the top 5 brands dominating at least 50 per cent of the market.

The IT market in the UAE has been buoyant due to a series of reforms. The most important of these developments is the establishment of Dubai Internet City and an extension project costing $1.3 billion.

The government has also been encouraging the development of ‘smart cities’ and is also driving online government services provision to over 90 per cent of services provided.

The increasing popularity of e-commerce and e-government has increased awareness regarding the value of internet use. This should help boost the home PC market.

Increased use of IT has also been embraced by local governments in the UAE, who are promoting IT with a new law making IT a compulsory subject in schools. The government is also encouraging Research and Development and hardware production. It is expected that foreign ownership rules for the hi-tech, R&D and knowledge based industries, among other sectors, could be liberalised. Investment in knowledge based industries could increase with the liberalisation of foreign ownership rules.

The federal UAE strategic plan calls for strengthening of e-government services. This plan provides the framework for implementation of federal e-government programmes.

For example, in a recent initiative, the UAE’s Ministry of Justice has recently introduced new computer software to streamline judicial processes. In April 2009, the UAE Ministry of Education announced an allocation of Dh79 million for 2009, for an initiative to provide computers and internet to state schools. — business@khaleejtimes.com