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Information and communication technologies (ICT) is one of the industries the GCC has chosen to bank upon for its diversification and future growth.
How can this be made possible?
Although the GCC countries face obstacles to sustaining growth, the industrial sector is playing greater role in promoting reforms and global competitiveness. This trend, coupled with regional government initiatives, such as liberalisation and privatisation of the telecom industry and setting up of technology parks, are fostering growth in the GCC ICT industry.
There has been growing demand for ICT products and services among residential and corporate segment. Penetration in mobile market has already surpassed 100 per cent in some of the countries. The UAE, followed by Qatar and Bahrain, enjoys the most developed mobile network infrastructure among the GCC countries.
But how do ICT parks help in the process of economic diversification?
In the process of economic diversification, ICT parks will play a central role by helping to nurture fledgling technology industries by building pools of talent, says a study by Booz & Company. Existing GCC ICT parks focus on either achieving commercial success or fostering development of local talent, but not both together. To be effective, next-generation ICT parks will need to create stronger links between government, education, and industry in the ICT arena.
"To attract and retain talent, these parks will need well-appointed offices, desirable living amenities and other consumer services," says Karim Sabbagh, a partner at Booz & Company. Structured correctly, they will operate along the full ICT value chain, from ideation to commercialisation, and will be positioned to help fulfil the economic missions of the GCC.
The study notes that because the region relies on imported skilled labour, most technology projects go to foreign contractors, who are not typically committed to the long-term growth of a grass-roots technology industry.
To change this, and to organically grow and enhance technology skills and knowledge, the GCC is turning to ICT parks. They allow a leap into the digital age by creating a dynamic environment to incubate, cultivate, and share talent. Next-generation ICT parks will serve as prime drivers in diversification efforts.
ICT can be both a core industry, where it offers products and services that improve people's lives; and an enabling one, providing technology solutions to other sectors of an economy, allowing them to operate more efficiently and improve services.
ICT spending in the GCC grew to $33 billion in 2007 - over twice the average of OECD countries and 50 per cent higher than the global average, this spending is expected to grow. "This is driven by increased demand for ICT in telecommunications, oil and gas, construction, healthcare, and public institutions," says Sabbagh.
To promote the development of ICT, GCC countries are directing investments toward state-of-the-art ICT R&D and are forging partnerships with world-class technology universities. They are also improving availability of ICT services and capabilities: Dubai Internet City and Qatar Science & Technology Park (QSTP) encourage the development of local ICT resources and cater to their countries' fast-changing ICT needs. They set up Special Economic Zones (SEZs) to create favourable economic and regulatory climates for ICT companies.
The GCC has more than a half dozen parks. The primary purpose of ICT parks is to develop local ICT talent and create greater socioeconomic development. These ICT parks can play a pivotal role in integrating government, industry, and educational institutions, says Ramez Shehadi, another partner at Booz & Company.
To create self-sustaining ICT parks, countries must put in place a hierarchy of value propositions starting relatively basically that gives tenants the "right to compete." It then needs value propositions that are critical for transition to a knowledge-based society followed by those that give ICT parks sustainable ecosystems for long-term viability.
There are four basic value propositions that are essential to ICT parks to compete - cost advantage, world-class business infrastructure, holistic business support and market insights and opportunities. ICT parks play an important role in identifying business opportunities for tenants by providing insights on, and entry into, local and regional markets. These again are especially important for start-ups and smaller enterprises.
After establishing basic value propositions, ICT parks can begin to implement elements critical to transition to a knowledge-based society including advanced ICT education and research, assistance with transforming ideas into businesses and integration of government, industry, and education, he says.
The final and most advanced tier of value propositions makes it possible for an ICT park to ensure its own long-term viability. This is achieved via a long-term commitment to ICT development and a sustainable lifestyle for workers.
