Published on: December 2019
Category: Future Government and Innovation
Led by digital platforms and increasing digitalization of manufacturing, energy and agriculture, the digital economy worldwide was 15.5 per cent of global GDP in 2016 and is projected to grow to 24.3 per cent by 2025. In addition, the development of a cloud-based, high-speed digital infrastructure is particularly critical for the development of jobs in urban areas positioned to be service hubs. A digital economy is indispensable to the development of the countries in the Middle East and North Africa (MENA). In this respect, citizens as well as SMEs in the region need affordable broadband internet and well-functioning digital payments to capitalize the digital opportunities created by this new economy. However, digital infrastructure in MENA lags other emerging regions and digital payments in some countries of the region see a slower diffusion. In addition, Internet speed is significantly slow. Internet access costs have decreased over the last three years, but they remain high, especially to the bottom of the pyramid. Many internet markets in MENA countries have monopolies or entry barriers, making MENA the region with the highest Internet market concentration in the world. Entry barriers limit internet infrastructure development and this constraint limits innovation across the whole internet value chain. Better connectivity, along with complementary regulatory measures, could develop data centers, unleash the potential of data intensive businesses, and help MENA in the transition towards a data-driven economy. The opportunity for the MENA Region to leapfrog by adopting ambitious targets of broadband development, broad diffusion of digital payments, and through a wide diffusion of technologies in the economy, is advocated by the new World Bank report "A New Economy".