As reviewed in Part 1 of this article, I made the case that the economic doldrums caused by the Covid-19 pandemic are also a great opportunity for a "Tech New Deal" in Dubai. This is a strategic opportunity for the public sector to funnel investment into critical infrastructure, boosting the market through digital assets and information highways for an innovation-led economy.
So, where is the investment going? What are the tech areas that are the most promising? Looking at reports in entrepreneurship, tech, and start-up space, it's becoming clearer where public sector investment might flow.
Here's what's in the spotlight:
Blockchain
In a recent HSBC report, 49% of respondents thought that governments and the private sector were investing adequate time and money into digital networks – including Blockchain – for them to become the norm by 2025.
Dubai is primed for tapping the potential of these digitally distributed ledgers, first designed for cryptocurrency, and in 2018, Dubai inaugurated its own Blockchain Center with CEO, Dr. Marwan Alzarouni. A strong leader in the sector, Alzarouni explained Blockchain's critical role in the city's aim to build better trust models for digital goods and services in a post-Covid world.
The Dubai Blockchain Strategy 2020 and the Emirates Blockchain Strategy 2021 seeks to save AED 11 billion, reduce 77 million paper processing work hours annually, and eliminate the environmental cost of 398 million printed documents per year. According to the World Economic Forum, in collaboration with the folks at Dubai Future Foundation, the UAE Blockchain ecosystem already includes 40+ government entities, 120+ Blockchain companies, and over 200 Blockchain initiatives.
Artificial Intelligence
AI has had the misfortune of becoming a buzzword, savior, and a scare story. It means different things to different people, but AI and machine learning is already a remarkable part of our everyday lives if you look beyond the hype. Machine learning makes our gadgets more intuitive and personalized, from news feeds on our smartphones to home assistants like Alexa that operate via voice recognition. On a macro scale, AI manages vast data reserves for organizations of all sizes and scope, from governments to banks to social media giants, through data modeling, science, and analytics. Locally, AI is being used to harness and distribute large troves of public-sector data via Dubai Data. Smart Dubai is also building a futuristic community that offers unparalleled, intelligence-based facilities, and lifestyle options.
AI has a national investment profile with the UAE AI National Programme and the UAE Artificial Intelligence Strategy 2031. With an appointed Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications, it's not surprising that last year's EY and Microsoft study showed the UAE coming in as the second-highest regional investor over the last decade, investing USD 2.15 billion (AED 7.9 billion) in the sector.
E-commerce
It's not exactly new, but it's still an incredibly potent driver of tech innovation. The UAE is attracting a brand new wave of e-commerce ventures looking for a strategically located hub with easy access to serve other markets. In fact, an OC&C report commissioned by Google on the state of tech entrepreneurship shows that the current crop of UAE tech start-ups are mainly operating in the e-commerce and SaaS sectors, with 52% of them in B2C ventures, and 93% located in Dubai.
Instead of the government opening its own e-commerce platforms, public sector investment can ease barriers, including first-year licensing and registration costs and an early-stage regulatory framework.
Supporting the Ecosystem
Public sector investment in digital infrastructure is also being directed towards improving the overall ecosystem. The UAE is responsible for around 40% of the region's top exits, holding the regional record for a successful exit with Careem selling to Uber for USD 3.1 billion — creating the first UAE unicorn. In the distance at no. 2 is the USD 600 figure set by Souq.com's buy-out to Amazon.
Improving this ecosystem is key to our Tech New Deal and our ability to accelerate non-oil economic diversification. This requires R&D investments and a sustained focus on STEM capabilities in education and innovation projects. According to the OC&C report, the government's role in improving general tech competitiveness can be extensive, through favorable terms, incentives for high-growth start-ups, and influence on a holistic, constructive environment for a thriving tech sector.
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The future of the Tech New Deal offers the potential for a much-needed stimulus in the region. With the support of local officials, incubators, and entrepreneurs, Dubai will be one of the biggest catalysts for positive change through direct tech investment. See another area primed for growth? Drop a comment below.