Coronavirus prompts digital transformation in Gulf countries

The virus has shifted work and other key elements of everyday life to the online space for much of Arab Gulf society.
Sunday 05/04/2020
A student attends an online course at home in Riyadh, March 23. (AFP)
Digital solutions. A student attends an online course at home in Riyadh, March 23. (AFP)

DUBAI - The global coronavirus pandemic has prompted a dilemma for organisations on the question of digital transformation. As business activity slows and even comes to grinding stop in places, many organisations will be inclined to hold on to cash and wait until the storm has passed before committing budget and resources to major new projects.

The socioeconomic impact of coronavirus has been dramatic but it has shifted work and other key elements of everyday life -- from grocery shopping to banking to schooling –- to the online space for much of society around the Arab Gulf.

Within this backdrop, a growing number of organisations, particularly businesses in the private sector, have been forced into a rethink about whether now is the appropriate time to make investments into digital technology and infrastructure.

Internet traffic around the Arab Gulf has surged since millions of workers have taken up advice about physical distancing to stay home, much as elsewhere in the world where social lockdowns have needed to be enforced.

Across different sectors, medium- and large-sized organisations, including hospitals, banks, financial institutions and universities, have pivoted quickly to digital solutions and tools to ensure business continuity. The number of services going digital  -- basically becoming available from internet-connected devices at home or on the move -- has been growing larger every day for some time but coronavirus has suddenly accelerated the demand for this even more.

In recent years, the United Arab Emirates has established itself as a regional leader in digital transformation. The Emirati government has played a pioneering role as it embraces the "smart government" model but it has also provided a future vision, infrastructure investments and a string of initiatives for private sector organisations to begin their own journeys towards a digital future in a way that is timely but also safe and secure.

The world did not predict coronavirus but years earlier Smart Dubai 2021, Abu Dhabi Economic Vision 2030 and the UAE Strategy for Artificial Intelligence were initiated together with more than two dozen interrelated strategic initiatives and projects already under way now that have been designed to transform how the United Arab Emirates works, plays and lives in the near future.

Across major parts of the UAE, today, telemedicine has replaced face-to-face consultations with doctors, schooling is continuing at home through remote learning and even Dubai’s real estate developers have taken their sales teams virtual to discuss investment options on-demand. Emirati government leaders have been pictured dispensing everyday duties and working remotely using teleconferencing and other cloud collaboration tools.

Cloud technology that can enable instant communications and team collaboration has meant many businesses and government organisations around the Arab Gulf have been able to pivot digitally at short notice even if they were not ready with their digital posture before.

The long-term impact of this pivot will be large on how businesses, government organisations and consumers behave and go about their business in the future, too. Coronavirus has effectively forced the world at large and especially key parts of the Arab Gulf to take a big step into the digital future.

Saudi Vision 2030 and Oman Vision 2040 likewise place huge premiums on realising digital transformation nationwide in order to unlock new value in the countries' economies and facilitate strategic efforts to achieve economic diversification.

In banking and finance, mobile payment solutions are a good example – the Financial Sector Development Plan (FSDP), which supports Vision 2030 in Saudi Arabia, has targets to increase non-cash transactions in the country to 28% this year and up to 70% by the end of the decade. Coronavirus is likely to help not hinder these targets.

Along with Internet of Things (IoT), the other key elements of digital transformation include the use of artificial intelligence, blockchain technology and machine learning, essentially to enrich the user or customer experience.

The Middle East and Africa are expected to spend $30 billion directly on digital transformation this year alone —  geographically the Arab Gulf states and sector-wise banking and energy will be at the forefront of much of this spending. 

Overall digital transformation is said to make up around a third of total spending on information technology in the Middle East and Africa but is expected to rise in the years ahead.

Buoyed by technology providers rolling out cloud solutions and tools on low-cost or no-string-attached trials, more and more of the private sector is learning that, with the right technology, training and management controls, they can remain productive even when most of their teams work from home. 

Google is offering free access to advanced features of Hangouts Meet to all G Suite and G Suite Education customers while Microsoft is offering free trials of Microsoft Teams to large organisations that need to overcome challenges created by physical distancing.

The Alibaba-owned DingTalk and Tencent’s WeChat Work are other cloud solutions and tools that enable team meetings and collaboration remotely that are seeing user subscriptions accelerate.

For much of the Arab Gulf, the unplanned but sudden pivot to digital solutions and tools has facilitated business continuity and helped preserve tens of thousands of jobs and also allowed some sense of normalcy to be preserved in what are otherwise chaotic times for much of the world.

There is nothing to celebrate about coronavirus but the accelerating demand for digital transformation triggered by the outbreak in the Arab Gulf will ultimately help promote sustainability and preserve the environment as well as lend long-term momentum to economic diversification efforts in ways that few could have anticipated.