New technology businesses in the Middle East and North Africa (MENA) are set to cash in over the next few years as countries in the region power up their efforts in this sector.
Saudi Arabia and the United Arab Emirates (UAE) are at the forefront of the tech charge, with government and private investment helping to fuel massive growth.
It is estimated that start-ups in the MENA region attracted almost $4 billion in funding last year – a record high for the area.
Egypt joined Saudi and the UAE in benefiting most from the influx of cash, creating further windows of opportunity for tech start-ups.
Sovereign wealth funds have been the primary drivers for investment, with governments mandating them to establish sustainable tech ecosystems over the next few years.
The money invested in 2022 represented a 24 percent increase on the previous year, with the UAE accounting for almost half of the total figure at $1.85 billion.
Saudi Arabia and Egypt collectively benefited to the tune of £1.64bn, with the remaining money ploughed into businesses in other countries.
With further new investment already announced during the early part of this year, it is clear that MENA is set to become a major player globally in the tech sector.
An evolving regulatory landscape is one of the primary reasons why the region has become ripe for investment in recent times.
Gaming is among the biggest growth areas, with Saudi Arabia and the UAE both on a mission to establish an infrastructure that allows the sector to flourish.
The recent announcement that the 2025 Global eSports Federation (GEF) Games will be staged in Dubai was a landmark moment for the region.
Tons of new jobs will be created as a result, helping to cement MENA’s status as an emerging force in the tech industry.
Saudi Arabia is also poised to become a major player in eSports, with Crown Prince Mohammed bin Salman personally driving initiatives in the sector.
He is known to be a fan of video gaming and has set local start-ups a target of producing more than 30 new games between now and 2030.
The development of new games may well gravitate into other associated sectors, with online casino operators currently on a drive to establish a stronger foothold in the MENA region.
There are already several casinos for Arabic players operating in the area and many more are forecast to jump on the bandwagon in the near future.
The licensing and regulatory framework in this sector remains in a state of flux due to strict laws in several MENA countries, but moves are being made to establish a solution that works for everyone.
Blockchain is another emerging technology that looks likely to contribute significantly to growth in the sector over the next few years.
Traditionally linked to cryptocurrencies, blockchain actually has the capacity to influence innovation in numerous other industries.
These include healthcare, tourism, logistics and supply chain management, all of which benefit massively from the decentralised facilitation of digital transactions.
Artificial intelligence (AI) technology is also expected to become one of the biggest growth sectors in the region over the next few years.
Analysts have forecast that the Middle East will benefit by more than $300bn by 2030 from AI innovations in numerous industries.
In simple terms, AI can be used to automate tasks which are generally labour-intensive, thus helping businesses operate more efficiently.
Customer service functions, data analysis and marketing are among the areas where AI can have a significant impact on firms across the business spectrum.
Virtual reality (VR) and augmented reality (AR) technologies are also predicted to have a transformational impact across numerous sectors in the MENA region.
The second half of 2022 was extremely challenging for VR/AR, with some of the sector’s leading producers struggling to secure investment to fund future developments.
As is the case across other tech sectors, investment is no barrier to innovation in the MENA region, which creates a wealth of opportunities in the VR/AR sector.
Saudi Arabia’s sovereign wealth fund flexed its muscles at the end of last year to acquire more than 50 percent ownership of headset manufacturer Magic Leap.
Magic Leap’s partners include businesses in entertainment, healthcare and manufacturing, all of whom are eager to harness the power of VR/AR.
While the firm has its headquarters in Florida, the influx of Saudi money will undoubtedly result in a restructure of how the business operates.
VR/AR tech companies in the MENA region are guaranteed to benefit significantly from Saudi influence on Magic Leap’s board.
Given the efforts being made by MENA nations to become big-hitters in tech, the region looks certain to soon be challenging the supremacy of Asia and North America as major innovators in the sector.
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