Middle East 2022: Growth on the horizon, but talent gap of concern

The Middle East is continuing to develop its digital transformation initiatives across government and industry, but challenges such as skills shortages and the need to grow quickly amid increasing demands.

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Rasto SK / Shutterstock.com | IDG

Digital growth in the Middle East continues apace, with significant investment in emerging technologies supporting the digital transformation of consumer, business to business, and government-to-citizen spaces.

A recent report by Gartner predicted a 4.5% annual increase in IT spending in the MENA region to $171.3 billion this year as businesses increasingly digitise amid the changing demands of the pandemic. Government efforts have centred on future growth and cementing uptake of digital approaches. The UAE’s Fourth Industrial Revolution Network, for example, will promote innovative technologies in industry. Sarah Al Amiri, Minister of State for Advanced Technology, told Gulf Business that if the UAE meets the programme’s goal, it will add Dhs25bn to the national economy by 2031.

Consumer uptake has also been growing. A recent study by MoEngage found that close to 70% of Middle East consumers were likely to switch to digital channels in 2022 to engage with top brands.

Such growth and goals, though, demand a wealth of talent to support developments in this space and this is a challenge for the region, although the groundwork has been laid through several existing and emerging initiatives.

Talent gap places pressure on sector

As Jebin George, senior program manager of customer insights and analysis at IDC, recently told CIO: “As Middle East enterprises go through accelerated digital transformation initiatives, the need for tech specialists is increasing exponentially. At the same time, the shortage of skills is one of the biggest challenges CIOs face regarding their digital transformation plans.” Skills in artificial intelligence, data and analytics, cybersecurity, and cloud are particularly in demand, according to an IDC CIO survey.

The region has approached the issue in multi-faceted ways, with Dubai, for example, launching its Digital Nomad visa, a remote work visa that allows individuals to live in the UAE while continuing to work for their existing employer, outside the UAE. Dubai sees this as an “opportunity for entrepreneurs and talents to innovate in the UAE’s safe and attractive business environment, with access to all the necessary services including world-class utilities and telecoms”.

Similarly, the Golden Residency programme that encompasses the whole of the UAE, allows for a 10-year residency for individuals who meet the criteria, including computer, electronics, programming, electrical and biotechnology engineers, and those with specialised degrees in artificial intelligence (AI), big data and epidemiology. The country also launched a National Programme for Coders, which “aims to create the best ecosystem in the world for coders to develop, grow and thrive” and has a particular focus on artificial intelligence. Kuwait and Egypt have also sought to address digital first approaches through vision-led programmes such as Digital Egypt.

While countries are looking to address the skills shortage through education and incentives, companies are also seeking to collaborate to address the talent pipeline. Customer experience solutions company Genesys, which has customers and operations in over 100 countries, is looking to expand its Genesys Creators programme to the Middle East in 2022. Genesys Creators is a collaborative project pioneered with Coventry University in the UK that offers students the opportunity to participate in a customer-led challenge in the field of CX, obtain training in CX and on Genesys cloud systems, and apply for internships and graduate placements with Genesys partners and customers.

Apple is looking to capitalise on the tech hubs in Saudi Arabia and others in the region and support skills development through the launch of its developer academy, which will train app developers and designers through a collaborative initiative with the Saudi Federation for Cybersecurity and Programming. The focus there will be on supporting women in the country to develop skills in iOS development so that they can create start-ups via digital platforms.

VC funding likely to see continued growth

Following 2020’s bumper year for VC investment in start-ups, which hit $1 billion, driven largely by investments in start-ups such as EMPG ($150 million), Kitopi ($60 million) and Vezeeta ($40 million), 2021 has seen the Middle East smash those records. It is expected to more than double by the end of the year, according to a report by consultancy RedSeer.

According to MAGNiTT’s most recent report, more than $1.2 billion in funding flowed through startups in the MENA region in the first part of 2021, representing percent year-on-year growth of 64%. The bulk of this was secured by the UAE, accounting for 26% of total deals in the region being valued at $755m. Saudi Arabia and Egypt also demonstrated strong performance over this year. RedSeer’s report highlighted the strong growth potential for the Software-as-a-Service, healthTech, edTech, and E-commerce sectors in the region.

This trend looks set to continue into 2022 as more investors look to capitalise on opportunities in the region. Azimut and GELLIFY Group recently announced the launch of a $50-Million VC Fund for the Middle East and North Africa (MENA) Region that will focus on B2B tech startups. Statista reports the value of venture capital investments in the financial technology industry in the Middle East region is expected to increase to approximately 2.3 billion U.S. dollars in 2022.