At a time when commercial, geopolitical and demographic dynamics are shifting in monumental ways across the globe, the Arab World finds itself in a promising period of business acceleration. Sectors such as telecommunications and financial services have never experienced so much growth in such a short period across the Middle East and North Africa (MENA). This fact is driven by the following trends:
- A rising population of digitally savvy millennials
- An increasingly open social fabric throughout the region
- The proliferation of technology that bolsters direct connections between entrepreneurs and the $3.3 trillion consumer market across MENA
However, across these trends, no dynamic has the potential to unlock more economic development for the Arab World than the Fourth Industrial Revolution (4IR). Given how critical data is, an intentional embrace of its value and its responsible flow across borders can only serve to facilitate business growth further.
The Middle East and Africa will experience higher cloud computing traffic expansion than any other market in the world between 2016 and 2021, at a compound annual growth rate of 35%. Data - ethically collected and maintained, secured and anonymized - represents the essential compass needle that can reorient our region’s digital aspirations and unlock harmonized economic potential. However, recent policy shifts in other regions of the world show us that confidence in the responsible management of cross-border data flows is not a given.
Since 2005, the world has seen cross-border bandwidth for transferring data increase forty-five-fold. But data localization policies have also surged in recent years, taxing or even reprimanding companies that leverage data across borders to serve their multinational clients. This stance is short-sighted and hinders true alignment with the economic potential of the 4IR. Instead, we must collectively develop policies that establish trusted partnerships between governments, enterprises and ultimately the users and consumers that keep our economies thriving.
The following three principles provide a blueprint to enable data flows that can allow the region to realise the full potential that the 4IR holds for our region’s unique economies:
1. Lead by example
Governments exist to serve as the connective tissue between the various "organs" of society, including corporate entities and the consumers they serve. Partnerships based on transparency and forward movement remain the ideal means of creating economically stimulating policies that work in the interest of all facets of society.
In the Middle East, cloud computing is among the fastest-growing areas of technology adoption, but organizations based there find themselves playing catch-up with peers outside the region. To facilitate the rapid growth forecasted by leaders such as Cisco, governments must step in to set expectations of optimal operating procedures from the top. Bahrain, for example, has adopted a government-wide Cloud First Policy that puts our public sector on a path to embrace digitization. By setting this example, we are empowering a top-down approach to inspire a more agile private sector, enabled by a business environment based in the cloud.
2. Reduce stagnation-inducing red tape
The future of commerce is e-commerce, which hinges on the secure and free flow of digital information across borders. Efficiency in data processing is the lifeblood of the 4IR. Consumers crave it and, as global markets converge, businesses demand it when considering market expansion.
Therefore governments should align with private sector players in ways that optimize their national business environments and encourage "e-trade". Successful models of such practices have played out across the MENA region, where senior officials from various ministries are much more likely to sit together with CEOs and investors to create effective solutions to business challenges.
Simultaneously, those entities that collect and process digitized information must continue to act responsibly, ensuring that data on the move is neither a threat to national security nor to consumer well-being. Overall, the inclination to collaborate across the public-private dynamic, rather than maintain divergent "swim lanes", will help our societies remain on a path to unlock the full potential of the 4IR. Heightened collaboration will trigger both the transparency and the trust that lead to more direct connections between government and business leaders.
3. Push the boundaries of what is possible with policy
A 2017 report by the Information Technology & Innovation Foundation, a tech-forward think tank, highlights a worrying trend for digital-first businesses in almost every corner of the world - government policies that add cost and burden to the transmission of data across borders. Often referred to as "data localization" policies, these regulations amount to a sort of data protectionism that hinders the ability of start-ups and large businesses to scale their solutions in ways that benefit their customers.
For the MENA region, sensible policy measures that align our countries with the promise of the 4IR should spur economic growth by holistically serving all facets of society, from the labour force to entrepreneurs to regulators to consumers.
For instance, Bahrain took a lesson from the UK’s 1998 Data Protection Act to develop and enact a new Personal Data Protection Law, enabling responsible growth for our surging digital economy. The regulation serves as a signal to innovators, investors and consumers that we are taking solid steps to instil transparency and accountability into our increasingly digitized economy while imposing minimal burden on businesses. Corporate leaders have heard the signal loud and clear, and Bahrain will introduce a new hyperscale data centre in 2019, through collaboration with Amazon Web Services, to enhance network readiness and data flow capacity across the MENA region.
Where do we go from here?
There is no doubt that secure data flows, anchored in responsible handling of digital information, introduce opportunity and convenience into our lives, from banking to automatic temperature adjustments in our homes.
Given that cloud computing traffic will surge more rapidly in the Middle East and Africa than in any other region, Gulf Cooperation Council governments must collaborate to inspire further confidence among both consumers and businesses in the value and security of data flows.
Our role as a hub of business connectivity will only intensify in the future, from sharing in global trends such as the hyper-adoption of digital technology, to understanding unique characteristics of the MENA region, such as sharia-compliant business practices. We stand ready to lead with a collaborative mindset and policy innovations that will allow the Arab world to derive the full value that the Fourth Industrial Revolution holds for our region.