Over the past several years, countries in the Middle East and North Africa (MENA) region have come a long way towards developing their telecommunications sectors. The region’s telecommunications players have seen unprecedented growth, which had scarcely been predicted by analysts even as late as 2002. While the region has seen significant success in improving access to and use of communications technologies, there remain difficulties in encouraging the use of communication tools for the purposes of knowledge exchange. Use of the Internet remains limited, with limited development and uptake of locally-relevant information technology applications.
The region has made great strides in developing ICT infrastructure. Driven by the forward-looking policies of regulatory authorities and policy makers, broadband infrastructure is widely available in most countries and most mobile licensees provide coverage to over 95% of their countries’ populations. Liberalization of telecommunications sectors has driven the success of regional players, allowing their expansion to neighboring countries. The market capitalizations of the top three regional players range between $18 and $34 billion. The ensuing competition has promoted the adoption of communications technologies with mobile penetration exceeding 100% in a number of countries.
Within the broader framework of ICT development, and paying particular attention to information technology, the region’s policy-makers have tried to address concerns of affordability and unequal access to the Internet. Projects such as PC for every home initiatives, IT clubhouses, and Internet community centers have strived to make the Internet affordable to large portions of the population. They have been supported by the recent wave of e- applications development — from e-government to e-learning initiatives — there is not a country in the MENA region that is not implementing such initiatives.
In the area of education, a number of public private partnerships and capability building projects have been developed to promote computer skills, curriculum development, and to improve children’s frequency of Internet access. In the realm of higher education the GCC region, lead by Qatar and the UAE, has begun to host a number of International universities. Saudi Arabia is launching its own King Abdullah University for Science and Technology with a multi-billion dollar endowment and strengths in graduate-level scientific research.
However, there remains a concerning communications information gap. While regulations and policies have seen the launch of a number of initiatives to promote ICT development and Internet adoption, the region’s appetite for Internet has not yet matched that for basic communications services.
A number of reasons explain the gap between interest in communications technologies and their use for knowledge exchange and information technology development. While affordability is often posited as an explanation, there are deeper reasons for the slow development of information societies in the region that policy makers need to address.
While countries in the region have made significant progress in the areas of training and curriculum development, a serious skills gap between what the region’s educational institutions are providing and what industry demands remains. In a survey of Arab executives, 30% sited the lack of qualified personnel as the most important challenge to successful innovation. The knowledge gap is furthered by the limited investment in research and development: by investing 0.2% of GDP in research, development and innovation, the Arab region falls far behind the world average of 1.7%.
The lack of Arabic content is another hindrance to the development of information societies in the region. Common to over 360 million people, the language has seen few successful efforts to develop content for this market. Major examples of Arabic online content and portals exist (including news sites and portals such as Jeeran.com, Maktoob.com, and Nassej.com), but they have a very small impact in terms of the amount of content an active online community requires. Arabic content is currently estimated at 0.5% of global online content. The Internet is its content; without sufficiently attractive, engaging, and informative Arabic content and applications, it will be difficult to effectively promote its use and adoption.
The lack of applications and content is partially driven by a regional investment bias towards traditional investment. For instance, of the private equity and venture capital funds in the region, those that focus on real estate have a combined size of more than $2.3 billion. Those that focus on technology, communications, and media are of a combined size of a little more than $1.6 billion. Within the ICT sector, investment in IT is much less popular than investment in telecommunications, as evident by the tremendous appetite at the most recent IPOs of telecommunications companies.
Given its experience, achievements, and remaining challenges, the MENA region must now carefully consider its trajectory. Strategies to improve access to communications services have been largely successful; however, the region must reexamine its efforts to include the I and T in ICT.
Success does not stop at connecting communities and schools to the Internet — this is a simple matter of infrastructure. Success comes in ensuring that this infrastructure is leveraged as a means to access and create greater knowledge and information. Success is not simply in the introduction of new e-curricula and training programs — success is in aligning educational institutions supply with industry’s demands, it is in the deepening of students’ intellectual curiosities. Success is not only in governments and NGOs pushing ICT applications — success is in the bottom-up, organic development of these applications on a larger scale.
A number of efforts can be undertaken to support a shift towards a more sustainable information society. To encourage information content and applications development on a large scale, we must start looking to the region’s small and medium enterprises, and support them in the areas of finance, administration and innovation.
Much financing in the region is skewed towards more traditional and ‘stable’ investments such as real estate. With that in mind, the region should encourage ICT innovation funding. It should consider providing soft loans for startups, creating innovation funds and competitions that encourage SMEs to produce, rather than governments to provide applications. The UAE has started down this path by launching an ICT Development Fund to provide grants, scholarships and advisory services to support ICT innovation.
The region must also look towards reducing and eliminating red tape barriers to innovation. Regionally, starting a business requires an average of 32 days; in Australia, it requires two. The region must take immediate action to modernize legislation and streamline registration processes in order to reduce this startup time and encourage entrepreneurs to continue innovating.
Public-private partnerships are an excellent medium by which governments have supported local SMEs. Jordan’s Education Initiative is a success-story of such an initiative. Bringing together over 35 international and local partners to develop infrastructure and curricula, Jordan encouraged the development of world-class applications, the injection of capital, the transfer of technology, and the sharing of ideas.
As a result of considered government involvement and regulatory perseverance, the region has come a very long way in a remarkably short period of time. While these actions have spurred the growth of communications technology, information technology is developing at a slower pace. The region’s next moves must further the goal of leaping from communications to information. Evidenced by its success on the communications front, the region has tremendous potential and there is no telling what it can achieve once it has attained the goal of becoming a sustainable information society.
Hana Habayeb is an associate at Booz & Company.