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Deregulation and User Protection Needed to Create Competitive Arab Tech Scene

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The Arab world needs to fast-track balanced regulation that supports the opportunities created by the Fourth Industrial Revolution while protecting data privacy, if it is to capitalize on the region’s emerging technology scene.

The Middle East and North Africa boasts a growing number of start-ups, with a 31% increase in investments to $900 million in 2018 compared to 2017 across sectors including transport, healthcare and fintech. Such businesses offer the potential for a new wave of economic growth in a part of the world traditionally handicapped by weak infrastructure and a limited industrial base.

“I view the Fourth Industrial Revolution as our opportunity to catch up, as our opportunity to leapfrog and actually get to parity with the rest of the world,” said Mudassir Sheikha, Co-Founder and Chief Executive Officer of ride-hailing firm Careem.

Careem has emerged as a poster-child for the Arab digital economy after it was acquired last month by Uber for $3.1 billion – a milestone for Arab tech deal-making. It comes on the heels of the $580 million purchase of Dubai-based e-commerce company Souq by Amazon in 2017.

After steam, mass production and information technology, the Fourth Industrial Revolution is bringing accelerating cycles of innovation, driven by artificial intelligence, robotics and biotechnology. It offers the promise of new high-tech jobs in a region struggling with high levels of youth unemployment – provided countries can deliver the right educational foundations.

But the rapid pace of change also raises concerns at a time when digital giants such as Facebook are confronted by a growing “techlash” over data privacy. Regional sensitivities over cultural norms add an extra level of complexity.

“It’s a very nuanced situation,” said Wafa Ben-Hassine, Counsel, Middle East and North Africa (MENA) Policy at Access Now, who argues that governments in the region must adopt a user-centred framework to ensure privacy and freedom from surveillance and censorship.

Some countries are already moving to embrace the new technological future, with Bahrain – recently selected as the site of new Amazon data centres – having passed a law allowing data stored there by foreign companies to be governed by laws of their home country.

“We think that is going to be a ground-breaking law,” said Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board. “We, of course, have to manage risk but we have to not ignore opportunity.”

The United Arab Emirates, meanwhile, has appointed Omar bin Sultan Al Olama as the world’s first Minister of State for Artificial Intelligence, underscoring the Gulf state’s determination to carve out a niche in the new digital world.

“Not one country is going to lead in the Fourth Industrial Revolution,” Al Olama said. “There are going to be hubs of excellence across the world and each hub is going to champion one or two domains – and we want to champion the domain of government, first and foremost.”

For governments and companies alike, the new digital economy will bring pluses and minuses, especially when it comes to employment prospects – a dilemma showcased vividly by Careem, which has created 1 million jobs since it started operating seven years ago, but could also destroy employment with the arrival of autonomous cars.

In practice, Sheikha said, the impact of self-driving cars will be felt more gradually in the Middle East thanks to cheaper labour costs, with driver costs accounting for an average 25% of trip expenses in the region against 80% in the United States.

In region known for its big governments, it is important that regulations do not create stumbling-blocks to optimizing the benefits of technology, according to Murat Sönmez, Managing Director and Head of the Centre for the Fourth Industrial Revolution Global Network, World Economic Forum. “We need to make sure we don’t get in the way of the potential.”

And Klaus Schwab, Founder and Executive Chairman, World Economic Forum, warned that the Middle East simply cannot afford to be left behind. “Those countries that absorb the potential of the Fourth Industrial Revolution first will be the most competitive countries,” he said. “We have to make sure that countries and regions are not lagging behind.”

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Deloitte TMT Predictions 2020: Previously Hyped Innovations Become a Reality

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Deloitte today released the 19th edition of its “Technology, Media & Telecommunications Predictions,” which looks at three overarching themes: individual technologies are becoming ever more interconnected and interdependent, increasing their impact and value as a result; smartphones, computers, TVs, enterprise data centers and software, and IoT will drive most of the technology, media and telecommunications (TMT) industry’s revenue; and lastly, many previously hyped services and products will finally become a reality in 2020.

“In 2020, we will start to see a canopy effect where industry players will work more closely together as individual technologies like edge artificial intelligence (AI) chips, robots and private 5G become better connected, and promising innovations like low-earth orbit satellites finally come to life,” said Paul Sallomi, vice chairman, Deloitte LLP, global TMT industry leader and U.S. technology sector leader. “This year’s predictions are a helpful guide for TMT business leaders to break through the clutter and understand what to do next in order to help be successful in 2020 and beyond.”

“These disruptive forces will continue to challenge traditional tech, media and telecom companies to keep pace with new-age, digital native companies. Those that can innovate, swiftly bring the latest developments to market and satisfy the demands of increasingly savvy consumers are the ones most likely to be rewarded,” said Sandra Shirai, vice chairman, Deloitte LLP and U.S. technology, media and telecommunications leader.

AI has the edge
A new generation of edge AI chips will reduce frustrations caused by lack of internet connection on smartphones by bringing AI to the device. Deloitte predicts that in 2020, more than 750 million edge AI chips — chips or parts of chips that perform or accelerate machine learning tasks on-device, rather than in a remote data center — will be sold, and that the edge AI chip market will continue to grow much more quickly than the overall chip market.

Private 5G: Enterprise untethered
Deloitte predicts that more than 100 companies worldwide will begin testing private 5G deployments by the end of 2020, collectively investing a few hundred million dollars in labor and equipment. For many of the world’s largest businesses, private 5G will likely become the preferred choice, especially for industrial environments such as manufacturing plants, logistics centers and ports.

Meet your new colleague, a robot
Of the almost 1 million robots Deloitte expects to be sold for enterprise use in 2020, just over half of them will be professional service robots, generating more than US$16 billion in revenue — 30% more than in 2019. Professional service robots will pass industrial robots in terms of units in 2020 and revenue in 2021.

Can I have an ad with my content?
Deloitte predicts that global revenue from ad-supported video services will reach an estimated US$32 billion in 2020. Asia, including China and India, will lead with $15.5 billion in revenue in 2020, nearly half of the global total. In China, India and throughout the Asia-Pacific region, ad-supported video is the dominant model of delivering streaming video to consumers. By contrast, in the United States, most direct-to-consumer video offerings are pursuing an ad-free subscription model.

“As major networks and studios continue to launch their own direct-to-consumer streaming services in 2020, competitors will likely scramble to offer content libraries broad enough to both attract and retain customers. There is an opportunity for media and entertainment companies to reaggregate their content libraries with a wide array of offerings — from video, music and gaming services to ad-supported content,” said Kevin Westcott, vice chairman, Deloitte LLP and U.S. telecommunications, media & entertainment leader. “For telecom providers, on the other hand, the emergence of 5G will offer unprecedented opportunities for companies to grow and achieve new levels of productivity. However, helping shape (and manage) customer expectation regarding its possibilities will be a big challenge in the coming year.”

Terrestrial TV’s surprising staying power
Antenna TV will thrive in 2020 with at least 1.6 billion people worldwide, representing 450 million households, enjoying some of their TV viewing via an antenna. Antenna TV will help the global TV industry keep growing even in the face of falling TV viewing minutes and, in some markets, increasing numbers of consumers cutting the pay-TV cord.

More insight from Deloitte’s 2020 TMT predictions:

Low-earth orbit satellites soar: By the end of 2020, there will be over 700 satellites in low-earth orbit (LEO) seeking to offer global broadband internet, up from roughly 200 at the end of 2019. These new “mega-constellations” of orbiting broadband stations will potentially add more than 16,000 individual satellites to that count over the coming years.

Give a listen: In 2020, the global audiobook market will grow by 25% to US$5 billion and the global podcasting market will increase by 30% from 2019 to reach US$1.1 billion in 2020, surpassing the US$1 billion mark for the first time.

A smarter smartphone: The smartphone multiplier market (hardware, content, services) will drive US$459 billion of revenue in 2020 alone and will grow between 5 to 10% annually through 2023, lifted by continued robust growth in its largest components. This means that in 2023, the smartphone multiplier market is likely to generate revenues of more than a half-trillion dollars per year.

The workhorse of the internet: Deloitte also predicts the global Content Delivery Network (CDN) market will reach US$14 billion in 2020, up more than 25% from 2019’s estimated US$11 billion. The market will double to US$30 billion by 2025, a compound annual growth rate of more than 16%.

Roll to work: Tens of billions of additional bicycle trips per year will take place in 2022. The increase in bicycling will double the number of regular bicycle users in many major cities around the world where cycling to work is still uncommon. Deloitte predicts a 1 percentage point rise in the proportion of people who bike to work during the three years from 2019 to 2022. Between 2020 and 2023, more than 130 million e-bikes (using all battery technologies) are expected to be sold.

“The rising competition for consumers’ attention across technology, media and entertainment industries means companies that serve these consumers should focus on what matters most in order to succeed,” concluded Dr. Jeff Loucks, managing director, Deloitte LLP and executive director, Deloitte Center for Technology, Media and Telecommunications. “Whether it’s delivering on 5G, offering a streaming service that entertains and does not overwhelm or fulfilling the promise of AI in 2020, consumers will look to companies that demonstrate an understanding of their desires and an urgency for making those desires a reality.”

Now in its 19th year, Deloitte’s annual TMT Predictions provides an outlook on key trends in the technology, media and telecommunications industry sectors worldwide.

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African Development Bank launches digital tool to help African youth learn to code

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The African Development Bank and technology firm Microsoft today launched the ‘Coding for Employment’ digital training platform, an online tool to provide digital skills to African youth, wherever they are across the continent.

The platform, launched at the 2019 African Economic Conference in Sharm El Sheikh, Egypt, aims to promote a continuous learning culture among young people and build their capacity to shape the continent’s future.

The high-level event drew heads of state and government, ministers and leaders from the private sector and academia to discuss how this new tool and other technological innovations could be used to spur development across the continent.

“The youth employment and skills development challenge is a complex issue that requires systemic thinking and bold partnerships … to address the existing skills gap and link youth to decent and sustainable employment,” said Hendrina Doroba, the African Development Bank’s acting director for Human Capital, Youth & Skills Development.

“The skills training platform launched today is a testament to the impact that such partnerships can achieve and the Bank looks forward to strengthening similar partnerships.”

The  platform teaches technical courses such as web development, design, data science and digital marketing and will be constantly adapted to respond to market demand. It is accessible on mobile devices, even in low internet connectivity settings and has an affordable, easy-to-navigate, secured and private interface.

“A defining challenge of our time is ensuring that everyone has equal opportunity to benefit from technology,” Ghada Khalifa, Director of Microsoft Philanthropies for the Middle East and Africa, said at the launch.

“Forward-thinking initiatives such as the digital training platform represent our commitment to helping drive the momentum needed. Though there is still much work to be done, we believe that through dynamic partnerships such as these, we can help build a knowledge-based economy in Africa that leaves no person behind.”

The Coding for Employment Program is a crucial part of the African Development Bank’s strategic agenda to create 25 million jobs by 2025, and to equip 50 million African youth with competitive skills. The Bank piloted the program in five countries (Nigeria, Kenya, Rwanda, Senegal and Côte d’Ivoire) in partnership with The Rockefeller Foundation and Microsoft and is currently developing 14 ultra-modern centers specialized in ICT and entrepreneurship skills trainings for youth.

The goal is to scale up the program to 130 centers of excellence across the continent over a 10-year period. It will create nine million jobs by building synergies with the public and the private sector globally to deliver demand-driven, agile and collaborative skills to empower young people to become innovative players in the digital economy.

The Coding for Employment training platform can be accessed here across 54 African countries.

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ADB’s First Satellite Financing to Expand Internet Access in Asia and Pacific

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The Asian Development Bank (ADB) signed a $50 million agreement with Kacific Broadband Satellites International Limited (Kacific) to provide affordable satellite-based, high-speed broadband internet connections to countries in Asia and the Pacific, especially in remote areas of small island nations in the Pacific and larger island nations like Indonesia and the Philippines. This is ADB’s first satellite financing.

The Asia-Pacific Remote Broadband Internet Satellite Project will help make broadband internet connections more widely available to countries in the region, where more than 2 billion people do not have reliable internet access due to inadequate infrastructure, geographical challenges, and the high cost of services.

“Better access to reliable, high-speed internet can help improve education services, expand access to information, attract investments, reduce rural–urban development gaps, enhance trade and connectivity, and stimulate local economies,” said ADB Director General for Private Sector Operations Mr. Michael Barrow. “It will also help improve communication, especially during emergencies and times of disaster when terrestrial networks might be damaged.”

“ADB’s role was key in getting this transaction closed,” said Kacific Founder and CEO Mr. Christian Patouraux. “ADB’s involvement has helped secure the necessary financing for this highly developmental project. The benefits of connectivity are life-changing—from increased tourism, access to information, financial services, to health care and education for many remote communities in the region.”

The project will support the construction, launch, and operation of a shared geostationary earth orbit, high-throughput satellite. Kacific-1 is scheduled to be launched by SpaceX in December 2019 and will be operational in early 2020.

The financing comprises loans from ADB and the Leading Asia’s Private Infrastructure Fund (LEAP), which is administered by ADB. Established in March 2016 with support from the Japan International Cooperation Agency, LEAP is one of ADB’s cofinancing vehicles dedicated to private sector infrastructure in Asia and the Pacific.

ADB will be working with GuarantCo, a Private Infrastructure Development Group (PIDG) company, to guarantee additional private cofinancing for the project. GuarantCo provides credit solutions for infrastructure development in lower income countries in Africa and Asia and is funded by the governments of the United Kingdom, Switzerland, Australia, and Sweden through the PIDG Trust and the Netherlands through FMO, the Dutch Development Bank, and the PIDG Trust. PIDG is a development and finance organization delivering pioneering infrastructure in the poorest and most fragile countries.

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