In the second of a two-part series to start 2020, we asked five experts to share the tech trends they see influencing the Middle East over the next digital decade.
Ranging from 5G to AI, retail tech, and efforts to facilitate new investment and innovation, here are their top predictions for Middle East tech in 2020 and beyond.
Matthew Reed, practice leader, Middle East and Africa at Ovum
5G will take center stage in the Middle East's tech sector in 2020. All the high-income Gulf markets – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE – launched commercial 5G services during 2019, but it's in 2020 that the take-up of 5G will really get underway, as more 5G devices including smartphones become available.
The initial use cases for 5G in the Middle East will be for faster mobile broadband and fixed wireless broadband, but there are also likely to be opportunities to use 5G in the region for automation and remote operations in sectors such as oil and gas, transport and automotive, smart cities, and healthcare.
And given the Middle East's youthful demographic profile, there could also be good prospects for 5G to transform consumer services such as gaming.
It's early days for these sector-specific 5G services but expect to see progress in 2020.
Additionally, state-of-the-art technologies including 5G and smart-city systems will be incorporated into Dubai's Expo 2020 exhibition, which will run for six months from October 2020 and will be a flagship event for Dubai and the UAE.
At the start of January 2020, Uber closed its $3.1bn acquisition of Middle East ride-hailing service Careem, which represented the biggest deal of its kind in the Middle East and is expected to spur further development in the region's e-commerce and startup sector.
However, technological infrastructure is less advanced in lower-income or unstable quarters of the Middle East. In Iraq, for example, the national telecoms operators have yet to launch 4G, though the Iraqi authorities are expected to move ahead with 4G licensing in 2020.
Carrington Malin, entrepreneur, marketer, and writer focused on emerging technologies
Will the Middle East and North Africa become more than simply a consumer of artificial intelligence?
While Saudi Arabia and the UAE announced some strategic, well-funded AI initiatives and policy moves last year, it's as well to remember that much of the region has been much slower off the mark. Predictably, most new government policy has had a heavy focus on preparing the public sector for AI.
Despite early public-private partnerships to encourage AI startups around the region, viable AI-focused startups remain thin on the ground, no matter where you look.
SEE: IT pro's guide to the evolution and impact of 5G technology (free PDF)
Building new ventures that harness the scale of the region's consumer buying power is now a well-trodden path and so e-commerce, ride-hailing and retail logistics ventures commanded the lion's share of venture-capital funding in 2019.
Government effort has largely focused on providing the framework, investment and leadership necessary for public-sector change. However, there is recognition that winning the AI talent war and nurturing startup ecosystems that encourage AI development are vital pieces of the puzzle.
The UAE has perhaps made the boldest steps in talent development with its new AI Talent Hunt Program, the launch of the '1 Million Arab Coders' training initiative in 2018 and the opening of the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) in October, which is offering graduates full-scholarships to join its masters and PhD programs this year.
Arguably, if we're going to see a wave of new AI startups in the region, then 2020 is the year that they will begin to come to the fore.
Jawad J Abbassi, head of Middle East and North Africa at GSMA
The 5G era has begun in the Arab world, with 12 commercial networks launched across five GCC Arab States during 2019. Mobile operators in these countries are aiming to be global leaders in 5G deployments, while some governments view the technology as a potential enabler for their digital transformation ambitions.
The technology is expected to play a key role in the implementation of various smart-city initiatives, with operators already exploring opportunities in key verticals, such as transport, health and utilities.
The 2020s will see 5G activities become more widespread across the region, with trials and commercial launches expected in non-GCC countries in the coming years. GSMA Intelligence forecasts that there will be around 45 million 5G connections by 2025, equivalent to 6% of total mobile connections.
SEE: Middle East tech's biggest trends in 2019? Startups, 5G – and internet shutdowns
Meanwhile, 4G adoption continues to grow apace, and is expected to surpass 3G to become the dominant technology by 2021. Coverage expansion and operator efforts to migrate 2G and 3G users to 4G networks are the main growth drivers for 4G, although device affordability remains a concern for many consumers in low-income brackets.
By 2025, 4G will account for just over half of total connections, up from a third in 2019, according to GSMA Intelligence.
Racha Ghamlouch, chief aggregator at the Digital Digest
As e-commerce encroaches on the sustainability of retail stores in markets outside the US – we know the story of how many chains Amazon has put out of business – optimizing and modernizing brick-and-mortar outlets takes center stage.
The conundrum is so pressing that McKinsey decided to rent out its own retail outlet at Mall of America in Minneapolis to help with trialing technology and exploring how retail can thrive in a changed world.
Retail tech is already happening in stores near you. There are two key areas of retail tech to explore for 2020: consumer tech and analytics tech.
Consumer tech includes everything from robots that can provide you with basic guidance and interaction, real-life augmentation such as smart mirrors and AR apps, improving payments and receipt management, to targeted OOH advertising.
By providing such experiences retail outlets are hoping to cut back on staffing costs, but most importantly engage with shoppers. This tech is not new, but we finally see more examples starting to roll out globally.
On the analytics side, stores are adopting more cameras and sensors to track everything from heat maps to improve store layout and flow, body language and customer sentiment, facial recognition for more bespoke experiences, down to tracking items on shelves for inventory optimization.
All this data can help outlets optimize their working hours, layouts, service, and even offerings. These solutions are becoming very common in retail stores, malls and multiple venues already, and we expect to see even more adoption.
In the region, Chalhoub Group launched its Greenhouse incubator to tap into local innovators, but we also see strategic big moves from Asian companies to capitalize on the strong retail sector.
Tom Strodtbeck, managing director at Global Growth Hub
The region continues to generate exciting new technology companies. Tech entrepreneurs are finding increased opportunities nationally, regionally, and internationally.
We're seeing young tech companies continue to challenge incumbent businesses like financial services, and in particular retail banking and payment processing. We expect that trend to continue with more challenger banks coming online.
These banks will empower consumers to participate more fully in online marketplaces, which in turn will lead to more need for delivery, online retail and more.
We also expect an increased role for AI in the region's businesses and government services. PWC sees the potential economic impact of artificial intelligence to be up to $320bn and governments will continue to support the sector through programs and investment.
Finally, regional governments continue to strive to make their economies more investor-friendly. Our work shows there is still great opportunity for international investors interested in the region's technologies and conversely, Middle East investors are looking to build networks and opportunities in the UK and Europe.