The United Arab Emirates (UAE) is making significant progress on its growth path towards economic diversification, with non-oil sectors contributing an estimated 72% of GDP in 2021. Small and medium enterprises (SMEs) and start-ups are expected to take up the mantle as the UAE’s next engine of growth, as they already account for around 60% of non-oil GDP, with this figure expected to increase in the coming years. However, there is still significant potential for digitalisation levels to increase among SMEs in the UAE. Almost three in four SMEs are using manual processes and basic communication tools to engage with customers and suppliers, with little to no cloud adoption, reflecting a ground reality that can be better aligned with the UAE’s new growth engine of digitalisation. A robust digital infrastructure is necessary to bridge this digital transformation gap and capture the untapped potential for SMEs and start-ups in the UAE.
This report, commissioned by Amazon Web Services (AWS) and Dubai Chamber of Digital Economy, finds that SMEs and start-ups in the UAE are expected to gain a total of USD 17.1 billion (AED 62.6 billion) in economic benefits from hyperscale cloud computing between 2022 and 2030, equivalent to 2.3% of the UAE’s GDP in 2021. This consists of USD 10.1 billion (AED 37 billion) in user benefits, and USD 7.0 billion (AED 25.7 billion) in partner benefits. From the perspective of cloud users, access to a hyperscale regional data centre in the UAE can accelerate hyperscale cloud adoption and unlock significant economic and non-economic benefits, including increased productivity and cost savings, revenue boosts from scaling up markets and products, job creation, improved sustainability, security, and operational resilience. From the perspective of cloud partners, the adoption of hyperscale cloud computing supported by the presence of a hyperscale regional data centre also enables local technology partners in the UAE to be part of a global ecosystem of IT partners and generate up to USD 7 billion in benefits between 2022 to 2030.
Adoption of the hyperscale cloud also enhances the UAE’s status as a global start-up and innovation hub, while future-proofing its data needs. The UAE has been ranked first in the 2022 Global Entrepreneurship Index and is aiming to have 20 tech unicorns by 2030, underlining its big ambition to be a global ‘Entrepreneurial Nation’. Beyond accelerating an entrepreneurial culture, key policy objectives at the sub-sector level will also necessitate greater technology adoption and an accompanying increase in data needs. For example, medium-term plans such as the Dubai Autonomous Transportation Strategy, which aims to automate a quarter of all transportation in Dubai by 2030, will require robust digital infrastructure and cloud access. Such key policy goals will require significant public cloud data services with low latency, high availability and reliability, and access to AI and Machine Learning capabilities provided by hyperscale cloud, underlining the importance of having state-of-the-art digital infrastructure to support future-readiness.
The report outlines three key recommendations, calling on governments to harmonise and simplify digital and data regulations, work with the private sector and technology companies to bridge the digital skill gap, and increase collaboration between regulators and technology companies to ensure regulations do not hold back adoption.
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