Accelerating digitization in the Middle East: 2012 ICT leaders’ event
Attendees at the 2nd Annual ICT Leaders’ Event identified three imperatives that could reinvigorate the region’s digitization pace: accelerate the evolution of digitization policies and governance; expand the supply of digital products and services; and stimulate demand for digital products and services.
Accelerating digitization in the Middle East 2012 ICT leaders’ event
Strategy& is part of the PwC network
Beirut Bahjat El-Darwiche Partner +961-1-985-655 bahjat.eldarwiche @strategyand.pwc.com Dubai David Tusa Partner +971-4-390-0260 david.tusa @strategyand.pwc.com Houston Kenny Kurtzman Senior Partner +1-713-650-4100 kenny.kurtzman @strategyand.pwc.com Jakarta Alessandro Gazzini Partner +62-21-2358-4400 alessandro.gazzini @strategyand.pwc.com
Madrid José Arias Partner +34-91-411-5121 jose.arias @strategyand.pwc.com José Antonio Tortosa Partner +34-91-563-7693 joseantonio.tortosa @strategyand.pwc.com Milan Luigi Pugliese Partner +39-02-72-50-9303 luigi.pugliese @strategyand.pwc.com Moscow Steffen Leistner Partner +7-985-368-7888 steffen.leistner @strategyand.pwc.com
Mumbai Ashish Sharma International Director +91-98-9997-8128 sharma.ashish @strategyand.pwc.com Munich Martin Reitenspiess Partner +49-89-54525-522 martin.reitenspiess @strategyand.pwc.com New York Christopher A.H. Vollmer Partner +1-212-697-1900 christopher.vollmer @strategyand.pwc.com Paris Pierre Péladeau Partner +33-1-44-34-3074 pierre.peladeau @strategyand.pwc.com
Riyadh Hilal Halaoui Partner +966-1-249-7781 hilal.halaoui @strategyand.pwc.com Sydney Jonathan Harrison Partner +61-2-9321-1900 jonathan.harrison @strategyand.pwc.com Tokyo Toshiya Imai Partner +81-3-6757-8600 toshiya.imai @strategyand.pwc.com
This report was originally published by Booz & Company in 2013. This report was published in association with the World Economic Forum.
To examine the current state of digitization in the Middle East and North Africa (MENA), the Telecommunications Regulatory Authority (TRA) of the United Arab Emirates, the World Economic Forum, and Strategy&, formerly Booz & Company, organized the second annual Middle East ICT Leaders’ Forum in November 2012 in Abu Dhabi. This report collects and summarizes the main insights of the event. The case for digitization within the MENA region remains compelling, but in the past two years regional digitization has slowed, and in some cases, regressed. To reverse this trend, the major stakeholders in the region’s digitization efforts must pursue three imperatives: accelerate the evolution of digitization policies and governance, expand the supply of digital products and services, and stimulate the demand for digital products and services. Foundational infrastructure is required to accelerate the adoption of broader digitization policies and enact governance reforms. This infrastructure includes pan-regional online payment systems, regional cross-border trade facilitation and normalization, legal protection for digital entrepreneurs, public–private partnership frameworks, cybersecurity standards and regulation, and stakeholder collaboration forums. To sustainably expand the supply of digital products and services, established digital players, particularly telecom operators, need to develop new capabilities, business models and partnerships. Policymakers, regulators, industry players, investors, and educational institutions can encourage and support digital entrepreneurs by removing the obstacles facing them, including limited funding, a restrictive legal framework, and scarce talent with appropriate skills. To stimulate demand for digital products and services, many actions must be taken: beyond “foundational infrastructure” reforms, regional governments should continue to move services online and support commercialization of non-sensitive data in concerted “open data” initiatives; the media sector can promote awareness about e-services among consumers, the healthcare sector can move its processes online, the education sector can offer online services, and philanthropic institutions can bolster Arabic content online by supporting the translation of existing material and the digitization of centuries of cultural and historical Arabic texts.
• In 2009–10, the digitization pace in the MENA region, as ranked by the World Economic Forum’s Networked Readiness Index, was among the fastest in the world. In 2011–12, however, the region’s overall pace of digitization faltered. MENA’s e-commerce volume accounts for 0.7 percent of the total purchases in the region, compared with nearly 5 percent in developed markets. A remarkable 85 percent of online transactions are paid by cash on delivery because the MENA lacks a pan-regional payments system and cross-border trade tariffs are not normalized. • MENA telecom operators earn 2 to 5 percent of their revenues from digital services; by comparison, operators in developed markets are earning as much as 25 percent of their revenues from these services. If the pace of digitization in the MENA region were to accelerate, digitization could incrementally contribute up to US$820 billion to regional GDP and create over 4 million new and muchneeded jobs by 2020.
Present at the event
Present at the event
Organization Aramex Bahrain eGovernment Authority Booz & Company
Attendee Hussein Hachem Bahjat El-Darwiche Danny Karam Karim Sabbagh Louay Abouchanab Ramez Shehadi Dr. Soumitra Dutta Osman Sultan Jeremy Foster Dr. Kamal Shehadi Nasser Bin Obood Mohamad Mourad Ali Al Khulaiﬁ Amina Hamam Abdelmajeed Shamlawi Dr. Bruno Lanvin Dr. Salim Al Ruzaiqi Eddy Skaff Malika Krafsig Bocar A. BA Mohamed Al Jasser
Position CEO Partner Principal Senior Partner Principal Partner Dean, Samuel Curtis Johnson Graduate School of Management CEO Head of Marketing, Government & Industry Relations, MENA Group Chief Legal and Regulatory Ofﬁcer Chief Government Relations & Communications Ofﬁcer Regional Gulf Manager ICT Market Development Manager Senior ICT Career Specialist CEO Executive Director CEO Senior Advisor, Information & Communications Technology Advisor to Group CEO CEO Vice President, Enterprise Business Unit
Mohammed Ali Al-Qaed CEO
Cornell University du Ericsson Etisalat Group Google ictQATAR Intaj Jordan INSEAD, eLab Information Technology Authority Oman Mubadala Qtel Group SAMENA Telecommunications Council Saudi Telecom Company Telecommunications Regulatory Authority UAE University of Washington School of Law World Economic Forum
Executive Director, Regulatory Affairs Fintan Healy Deputy Director General, Telecommunications Sector HE Majed Al Mesmar HE Mohamed Al-Ghanim Director General Scott David Danil Kerimi Derek O’Halloran Hala Hanna Rod Beckstrom Nassib Abou-Khalil Executive Director, Law, Technology and Arts Group Head of Information and Communications Technology, Government Community Associate Director, Head of IT MENA Global Leadership Fellow Vice Chairman, Global Agenda Council on the Future of the Internet General Counsel and Head of Public Policy, MENA
The digitization imperative
Digitization — the mass adoption of connected digital technologies and applications by consumers, enterprises, and governments — is already demonstrating its power as an engine for global economic expansion and job growth. Governments and other major stakeholders in the MENA region’s information and communications technology (ICT) sector are well aware of digitization’s promise. In 2009–10, their combined efforts set a digitization pace, as measured by networked readiness, that was among the fastest in the world. In 2011–12, however, the region’s overall pace of digitization faltered. To better understand the current state of digitization in the Middle East, why its pace has slowed, and how it can be reinvigorated, the Telecommunications Regulatory Authority of the United Arab Emirates, the World Economic Forum, and Strategy&, formerly Booz & Company, organized the second annual ICT Leaders’ Event. Held in November 2012 in Abu Dhabi, the event was attended by 26 executives, representing ICT policymakers, regulatory authorities, academics, industry bodies, telecom operators, professional service providers, investment authorities, and industry experts. This report collects and summarizes the main insights of the event.
The current state of digitization
Globally, the expansion of the digital economy continues unabated. Growth in e-commerce is outpacing that of every other retail channel. In China, Taobao Marketplace, an online shopping outlet, is recording 800 sales per second, a higher volume than that of the country’s five largest bricks-and-mortar retailers combined. In Kenya, m-PESA, a mobile payment system, processes transactions equal to one-fourth of GDP. In Singapore, 3 million people — 60 percent of the population — receive healthcare via teleconsultations. Globally, one of every two photographs is taken with a camera phone; the most popular device on Yahoo’s photo sharing service, flickr.com, is the iPhone. There are no signs that the demand for digital products and services will slow in the near future. By the year 2020, an entire generation of digital natives, Generation C (for “connected”), will have come of age. Soon, the several billion devices currently linked to the Internet will swell into the trillions. Governments around the world are preparing for this new digital reality and positioning their economies to capture a share of the growth that it will create. Mayor Michael Bloomberg, for example, intends to establish New York City as a center of digital entrepreneurship, thereby adding a third pillar to that city’s economic foundations in media and finance. In 2011, Bloomberg announced that Cornell University would build Cornell NYC Tech, a 12-acre applied science and engineering campus on Roosevelt Island in Manhattan. Functioning in academic partnership with the Technion, the Israel Institute of Technology, it will serve as a wellspring of research and high-tech entrepreneurship, and anchor the city’s digital innovation ecosystem.
The case for digitization within the MENA region remains as compelling as ever. The population of Internet-enabled and technology-savvy 15- to 35-year-olds in MENA, the so-called Arab digital generation (ADG), will expand by 40 percent by 2014, significantly faster than the global growth rate of 20 percent.1 These influential and entrepreneurial young people want to live in technologically advanced countries: 83 percent of them use the Internet daily; 40 percent of them use it for five hours or more each day. Many in the ADG believe that their quality of life is dependent on digitization: 48 percent of them think that the region’s healthcare services need a technological upgrade; 43 percent of them believe this of education services.
Measuring the impact of digitization in the Middle East
Strategy& conducted a multivariate econometric analysis on a set of 207 countries and territories between 2004 and 2011 to measure the impact of digitization. We used a Digitization Index of 23 indicators for each country to measure ubiquity, affordability, reliability, speed, usability, and skills. Our analysis revealed that a 10 percent increase in the Digitization Index contributes 0.48 percent real GDP growth for countries in the constrained stage of digitization and 0.71 percent for countries in the advanced stage of digitization. In terms of jobs, a 10-point increase in the Digitization Index contributes a 0.66 percent absolute decrease in the unemployment rate for countries at the constrained digitization stage and a 0.36 percent drop for countries at the advanced stage of digitization. Assuming that MENA countries accelerate their pace of digitization (based on historical growth trends achieved in benchmark countries), the impact of digitization in the region between 2012 and 2020 should be $820 billion in additional nominal GDP and 4.4 million extra jobs.
In addition, digital products and services will drive the next wave of growth in the ICT industry. MENA’s digital market is expanding at a compound annual growth rate of 12 percent and is expected to be worth $35 billion by 2015.2 This is but a small portion of a potentially rich digital return: Strategy& estimates that were the pace of digitization in the MENA region to accelerate it would add a cumulative $820 billion to regional GDP and create an extra 4.4 million much-needed jobs by 2020. This gain would accrue from the transformational effect of digitization on productivity and output across the region’s economic sectors, including the enablement of more effective and efficient business models, commercialization strategies, and production and operating processes.
Initially, the MENA region aggressively pursued the benefits of digitization. However, in the past two years, the region’s digitization pace has slowed, and in a number of cases has regressed (see Exhibit 1).
Exhibit 1 Progress toward networked readiness has slowed in the MENA region
MENA Countries Ranking Change (2010/2011 to 2011/2012)
Country Kuwait Bahrain Jordan Oman Lebanon Saudi Arabia Algeria Qatar Egypt Syria United Arab Emirates Morocco Countries with Increasing Ranking Countries with Decreasing Ranking
2012 Ranking 62 27 47 40 95 34 118 28 79 129 30 91
Ranking Change (+13) (+3) (+3) (+1) (0) (-1) (-1) (-3) (-5) (-5) (-6) (-8)
Source: World Economic Forum, “The Global Information Technology Report 2012,” Networked Readiness Index rankings 2012
Furthermore, only limited progress has been achieved in implementing effective digitization policies and governance in the region, as defined during the 2011 ICT Leaders’ Event.3 These goals included: • The elevation of ICT policy on the national agendas of MENA countries. • The adoption of a systemic view of digitization that acknowledges its reach across the telecom, IT, and media industries, and its influence on most other sectors of the region’s economy. • Collaboration across borders and a multi-stakeholder engagement approach, both key enablers of regional digitization.
• The development of public–private partnerships (PPPs) to appropriately balance the risks and returns of digitization. Several factors have contributed to slower digitization progress. The ramifications of the Arab Spring have led to new government priorities across the region. Middle East governments have faced the same challenges encountered by policymakers around the globe as they seek to evolve their policies and governance. These challenges stem from the continuously changing nature of the industry, the number of stakeholders involved, and the need to balance market-driven initiatives with state-led initiatives. At the same time, challenging conditions in the
Mohamed Nasser AlGhanim, TRA UAE; Bahjat El-Darwiche, Strategy&, formerly Booz & Company
Osman Sultan, du; Hussein Hachem, Aramex
global economy have led to a shift in national investment priorities from technology to other areas, such as defense, security, health, education, and mega-infrastructure development. A closer analysis of the World Economic Forum’s Networked Readiness Index reveals that the MENA region has progressed in relative terms in four key digitization dimensions: business and innovation, affordability, skills, and government usage. However, its progress in terms of political and regulatory environments, infrastructure and digital content, individual usage, and business usage requires greater effort. Hence, the participants in this year’s ICT Leaders’ Event focused their discussion on three issues critical to driving digitization in the MENA region: • How can the establishment of foundational digitization policies and governance models be accelerated? • What is needed to expand the supply of digital products and services? • What is required to stimulate the demand for digital products and services?
Middle East governments have faced the same challenges encountered by policymakers around the globe as they seek to evolve their policies and governance.
Soumitra Dutta, Cornell University; Karim Sabbagh, formerly Booz & Company
Accelerating policy and governance evolution
Sound policy and governance are essential enablers of digitization. Further, policy needs to be prescriptive and provide tangible guidance. As one event participant said, “Now, I’m not saying this because I have a strong point of view about who is supposed to do it, who is supposed to fund it, and who should subsidize it, but these questions will have to be answered.” To be effective, digital policy and governance in the MENA region must also accurately reflect the changing realities in the ICT industry, as well as country-specific conditions and goals. As one participant eloquently put it, the telecommunications industry is moving “from the age of unshared certainties to the age of shared uncertainties.” In the broader ICT space, power is shifting to the hands of connected and empowered users. The supply of digital products and services is moving from centralized to distributed sources, from infrastructure to applications, and from a vertical to a horizontal industry structure. In addition, the supply base is expanding as new competitors enter the digital market. Demand, too, is increasingly fragmented among consumers, enterprises, and governments in both location-specific and location-agnostic contexts. Without a firm foundation in these realities, policy initiatives will be stillborn.
Salim Al Ruzaiqi, ITA Oman; Mohammed Ali Al-Qaed, Bahrain eGovernment Authority
Participants highlighted five foundational priorities needed to enable the enactment of broader digitization policies and facilitate governance evolution: • Payment systems: Of the 22 member countries in the Arab Monetary Fund, only 12 have real-time cross-border settlement systems. Saudi Arabia, the region’s largest economy, allows online merchants to use credit cards for their websites, although penetration is relatively low. SADAD (the Saudi payments system) will launch an online capability at the end of 2013. In the meantime, banks and others cannot set up their own online payment systems (including mobile payments, or “m-payments”). • Cross-border regulation and tariffs: Currently, cross-border trade in the MENA region is uncompetitive. It is less expensive to ship goods from New York to Saudi Arabia than to ship them from Dubai to Saudi Arabia. Such trade is also highly regulated. “Customs rules and regulations are geared toward heavy, big packages and not small packages,” said one participant. “The documentation needed for each and every package that you want to move across the region is enough to block trade.” • Legal protection for digital entrepreneurs: Except for Saudi Arabia, none of the MENA countries rank among the top 30 in the World Bank’s global Ease of Doing Business index. Larger companies can accept the risk of doing business in the MENA region. However, the region’s onerous regulations for setting up new businesses and its complex bankruptcy laws can act as substantial disincentives for the entrepreneurs who are needed to create a vibrant, innovative digital economy.
Mohamed Al Jasser, STC; Nasser Bin Obood, Etisalat Group
• Public–private partnerships: PPPs are essential enablers of digitization. As one event participant noted, “Operators and other major ICT players are burdened with actually investing, while only being rewarded for direct economic returns based on that investment. Given the impact on growth and employment, government stakeholders need to consider how they can incentivize these players to continue investing, because if they can’t generate an adequate economic return, their shareholders will not allow them to invest.” There is no shortage of industry players who would like to partner with the region’s various government authorities. Unfortunately, a lack of standardized contracts and frameworks, as well as the need to negotiate every PPP from scratch, are slowing partnership development. • National cybersecurity frameworks: Only a handful of countries in the Arab world have adopted concerted cybersecurity efforts, which are essential to addressing the increasing number of cyber threats of greater sophistication. A holistic framework that drives the development of a national agenda and coordinates activities across stakeholders would improve overall response capability and resilience to potential cyber threats and attacks.
Hala Hanna, World Economic Forum; Kamal Shehadi, Etisalat Group
The MENA region’s governments need to put into place the regulatory, legislative, and collaborative frameworks needed to overcome these obstacles to digitization. Regulatory frameworks are necessary to enable not only online payment, but also the economical and efficient fulfillment of online orders. Legislative frameworks have to guarantee digital security and encourage entrepreneurship. Collaborative frameworks are needed to stimulate private investment, especially in digital infrastructure, where increasing investments are required to support the accelerating pace of digitization. Regional, cross-sector, and intra-sector cooperation is required to build a vibrant digital economy. Although all these elements of digitization infrastructure require the enactment of regulatory, legislative, and governance changes, starting with any of them will facilitate broader policy reform and strengthen the environment for developing both supply and demand of digitization.
Collaborative frameworks are needed to stimulate private investment, especially in digital infrastructure.
In the new digitization era, supply goes far beyond the traditional local telecom operator to include IT service providers, hardware and device manufacturers, software and application service providers, and content providers. Suppliers are also no longer restricted to established players — startups and even individuals are gaining a larger role in the ecosystem. Products and services have also expanded beyond connectivity to include applications, content, and managed integration and support services. Successful digitization requires a continuous supply of innovative digital products and services. Established companies and entrepreneurs will provide these offerings, and the MENA region needs to pursue practical initiatives to encourage the development of digital businesses on both ends of the commercial spectrum.
Ramez Shehadi, formerly Booz & Company; Danny Karam, formerly Booz & Company
There is a large, as yet untapped, growth opportunity for MENA’s telecom operators in delivering digital solutions and infrastructure. Currently, they are earning 2 to 5 percent of their revenues from digital services (such as managed services, systems integration, cloud computing, solutions development, applications and content, and machine to
machine applications), far less than selected operators in developed markets that are earning as much as 25 percent of their revenues from these sources. Further, the digital initiatives of regional operators are still in their early stages, and there is insufficient digital innovation in the region. “Telcos are starting to develop services for the different verticals, such as e-health,” said one participant, “but these systems will not pick up until the whole ecosystem is developed.” There are some encouraging signs as to the potential for digital entrepreneurship in the MENA region, but the level of supply that existing startups bring to market is insufficient. Jordan, for example, is the source of 32 percent of the region’s digital startups, with approximately 100 new companies being created annually. By comparison, in 2011, 193 digital companies were founded in the city of Chicago alone. Several factors explain this dearth of entrepreneurship. Monetization opportunities are limited. Less than 6 percent of the region’s advertising is delivered through digital channels; compare this to nearly 20 percent in developed economies. E-commerce volume is quite low, making up just 0.7 percent of the total purchases in the region (the proportion is nearly 5 percent in developed markets). Skilled digital entrepreneurs are scarce primarily because the education sector is not training and retraining people as quickly as new digital businesses and
Scott David, K&L Gates; Malika Krafsig, Qtel Group
technologies emerge. One participant put it this way: “You’ve got a lot of really interested, excited guys and gals who can’t take ideas into operating reality.” The region also lacks sufficient smart capital for funding new businesses. Several governments in the MENA region have established ICT funds, but they are underutilized. Only approximately 40 private
venture capitalists (VCs) operate in the region. In contrast, Europe has approximately 75,000 VCs, and the U.S. has 250,000. When new businesses in MENA are able to get off the ground, there are limited alternatives for exit strategies, because the IPO and acquisition markets are relatively new. Legal and cultural systems in the region are not tolerant of failure and rarely give second chances to bankrupt companies and individuals, for example. Established telecom operators should develop the required capabilities such as innovation, solutions delivery, and commercialization expertise to tap into the digitization entrepreneurship opportunity. These capabilities can be developed either internally or through partnerships and acquisitions. Stimulating digital entrepreneurship requires a holistic approach that addresses the significant challenges in the ecosystem, including talent, financing, and legal frameworks.
Amina Hamam, ictQATAR; Rod Beckstrom, World Economic Forum
Bocar A. BA, SAMENA Telecommunications Council; Bruno Lanvin, INSEAD, eLab
The third major component needed to accelerate the pace of digitization in the MENA region is demand from consumers, businesses, and governments. Demand is increasingly complex — it is determined by individuals, enterprises, and governments across all economic sectors. The primary inhibitors of digital demand are the limited uptake of e-services and the lack of digital content in Arabic. Although the MENA region has significant potential for e-commerce, most of the online activity in the region is devoted to free entertainment venues, such as YouTube, and social media sites. The region’s fast-growing digital generation often shops for products online. However, very few people actually buy online because they do not trust the region’s online payment and fulfillment systems — or these systems are not yet in place.
Mohamad Mourad, Google; Abdelmajeed Shamlawi, Intaj Jordan
A remarkable 85 percent of online transactions must be paid with cash on delivery (COD). This is “a killer for e-commerce,” according to one participant, because items bought via COD have a 20 to 30 percent higher return rate than those bought via online payments, and COD payments have an adverse effect on cash flow and working capital. Even if a payment infrastructure were available, a shift in consumer purchasing behavior would be needed. Only 2 percent of the ADG use credit cards on a daily basis; 74 percent never use credit cards at all for online purchases. Meanwhile, even though the amount of online content in Arabic is doubling annually, individuals are generating most of it informally. There is still a lack of online content in Arabic from government, educational, healthcare, and commercial institutions. This is also likely inhibiting the demand for digital products and services in the MENA region.
Mohamed Al Jasser, STC; Fintan Healy, TRA UAE
Members of the ADG prefer to communicate in their native language when online: more than 50 percent of them use Arabic for digital communications within the region and 23 percent of them use a mixture of Arabic and English in their messages. In the MENA region, 32 percent of Internet searches are conducted exclusively in Arabic, and 41 percent of searches use a mix of Arabic and English.
The dearth of Arabic content online may be resolved naturally as MENA’s digital markets expand over time. “There is no structural problem in content, but someone has to pay for it,” explained one event participant. “Digital advertising is growing in MENA and is increasingly rewarding Arabic content.” Nevertheless, a fully functioning digital sector must be in Arabic, in terms of both content on individual websites and the Internet’s top-level domains. Demand-side inhibitors of MENA digitization can be removed in several ways. As the largest spenders on ICT, the region’s governments can promote demand by moving their services online and offering incentives for using them. In Bahrain, for example, the use of e-government services was encouraged by offering rebates to customers who used e-services. Governments should also consider embracing the “open data” movement and use their huge databases to support the commercial development of digital applications and other services. Furthermore, digital activity in the MENA region can and should be measured, and the data subsequently used to direct future investment in more effective ways. Other public and private stakeholders can also help stimulate the demand for digital services. The media can play a major role in creating awareness about the importance and convenience of e-services. The healthcare sector can begin to move certain processes online, such as booking appointments. The education sector can offer online services, engage young people in digital activities, and promote Arabic language studies. Philanthropic institutions can bolster online content in Arabic by supporting collective action, such as translating the content of major information sites and advancing the digitization of centuries of cultural and historical Arabic content.
Derek O’Halloran, World Economic Forum; Danil Kerimi, World Economic Forum; Mohamed Nasser Al-Ghanim, TRA UAE
The vital importance of digitization within the MENA region was reiterated throughout the 2012 ICT Leaders’ Event. Digitization represents a substantial opportunity for regional economic growth and diversification, as well as an opportunity to sustain development of the regional ICT industry. Moreover, digitization provides a way to engage and advance the quality of life of citizens in every part of society. When looking at digitization policymakers and business leaders should consider its utility in advancing broader national goals, in particular where digitization can enhance the impact of three major socioeconomic trends: the emerging Arab Digital Generation (ADG), the inclusion of women, and the participation of the poorest in the modern economy. The reacceleration of digitization in the MENA region will help meet the demands of the ADG. Members of this generation have entrepreneurial aspirations, believe in equal opportunities for both genders in education and employment, want to live in technologically advanced nations, and believe key economic sectors such as healthcare and education require reform through information and communication technologies. Digitization is an area in which young entrepreneurs can have considerable impact if policymakers and companies can provide them with the correct enabling environment. Policymakers can also use digitization to promote the economic inclusion of women. There are at least 90 million women in the MENA region who will join the workforce over the next two decades. These women are members of a global cohort of around one billion economically excluded women. Strategy& calls these women the “third billion” because their economic integration can have as significant an impact on growth and prosperity as the recent increased participation of the billion-plus populations of China and India in the global economy.4 Similarly, digitization is one means of bringing the poorest people in developing countries, those at the “bottom of the pyramid,” into the economy. Most of the MENA population, 68 percent, is at the bottom of the pyramid and they often cannot afford digital technology. Increasing their level of digitization can reduce poverty and is one of the best means of raising the national level of digitization.5 By closing the digital gap between the wealthiest and the poorest in the MENA region, governments and companies can provide part of the impetus needed to regain previous regional digitization progress.
See “Understanding the Arab Digital Generation,” Strategy&, 2012.
Bahjat El-Darwiche, Louay Abou Chanab, Jad Hajj, and Huy Nguyen-Tuong, “Winning in the digitization space: Differentiating capabilities for MENA telecom operators,” Strategy&, 2012.
Conference Insights, “Building the digital Middle East: 2011 ICT leaders’ event,” Strategy&, 2011.
DeAnne Aguirre, Karim Sabbagh, Christine Rupp, and Leila Hoteit, “Empowering the third billion: Women and the world of work in 2012,” Strategy&, 2012.
Bahjat El-Darwiche, Ashish Sharma, Milind Singh, and Rawia Abdel Samad, “Digitization in emerging economies: Unleashing opportunities at the bottom of the pyramid,” Strategy&, 2012.
Strategy& is a global team of practical strategists committed to helping you seize essential advantage. We do that by working alongside you to solve your toughest problems and helping you capture your greatest opportunities.
These are complex and high-stakes undertakings — often game-changing transformations. We bring 100 years of strategy consulting experience and the unrivaled industry and functional capabilities of the PwC network to the task. Whether you’re
charting your corporate strategy, transforming a function or business unit, or building critical capabilities, we’ll help you create the value you’re looking for with speed, confidence, and impact.
We are a member of the PwC network of firms in 157 countries with more than 195,000 people committed to delivering quality in assurance, tax, and advisory services. Tell us what matters to you and find out more by visiting us at strategyand.pwc.com/me.
This report was originally published by Booz & Company in 2013.
© 2013 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Disclaimer: This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.