A dark blue star on a blue and white background is the logo of Dubai Knowledge Village. “Dark blue gives a feeling of longevity. It’s an enduring colour that will stand the test of time,” reads the caption. Appearing on billboards across the growing Technology Zone, it is a typically bold expression of the emirate’s hopes for the future.

Within recent memory most of the land around the new village, which is being financed by state-owned Dubai Holding, was barren desert. Now it is being purposefully developed as a community for scientists, researchers and businessmen.

The village is just one of the visible signs of the dramatic changes that have taken place in technological development across the Middle East over the past 50 years. And if government initiatives in other parts of the region are fulfilled, centres like this could become commonplace.

But it is only relatively recently that the sector’s potential has been recognised. “In the past 10 years alone the Middle East has witnessed tremendous change and improvement in terms of technological development,” says Yasser Elkady, managing director of Middle East & Africa operations at the US’ Cisco Systems. “But in the past five years, another wave of thinking has taken hold. Governments are now starting to see information and communication technology as a vehicle for economic growth.”

Within a generation, says Elkady, governments expect to bring standards of education, healthcare and transport up to levels comparable with the US and Europe – and the IT sector is expected to play the lead role in this transformation.

And these three sectors are just the beginning. Over the next 50 years, IT is seen as a way of rapidly improving communication between governments and their people, and addressing the growing spectre of high unemployment. “IT is being seen as a way of transforming governments by improving their services to citizens, as well as creating jobs and solving the high unemployment issues in the region,” says Elkady.

Education and training are key areas where IT can relieve pressure on public services (see box). And Cisco is also working with Cairo on a plan to improve its bloated government bureaucracy. Having to cater to one of the largest populations in the region, the system is under considerable strain. “The aim is to develop e-government with a particular focus on the bureaucracy required for the subsidy system, which is very costly to maintain,” says Elkady. “At the moment, food for low-income families is all subsidised.”

In the future it is hoped to link the subsidy system to other welfare programmes such as healthcare and education. “For various reasons, some low-income families are not keen to send their children to school. By improving the subsidies system and healthcare in co-operation with the Solidarity Ministry we hope to persuade families to send them to school.”

IT as a driver of economic and social development across the region has won wide popular and governmental support. The goal is to dramatically increase the number of IT-literate graduates in the region. But what will they all do? With India to the east and the developed US and European markets to the west, what will be the Middle East’s niche in 50 years’ time?

Research centres like the Dubai Biotechnology & Research Park (Dubiotech) are being promoted as one vision of the future. “Research and development should be a key focus over the next 50 years,” says Abdulqader Alkhayat, Dubiotech’s chief executive officer.

Dubai is focusing its efforts on the biotechnology boom. Covering a 3-million-square-metre area, Dubiotech aims to offer international companies a combination of free zone privileges and exemptions with specialised research facilities, office space and accommodation. Similar parks already exist in Europe and the Far East but the research park is the first of its kind in the Middle East.

Dubiotech aims to create up to 20,000 local jobs – with most white-collar positions targeted at UAE graduates. The park has already signed agreements with Sharjah University and UAE University to jointly promote life science research and education.

These agreements will see the universities and Dubiotech combine their scientific research expertise to start joint projects and develop academic programmes to create a pool of local graduates.

Table: Middle East internet usage

Internet usage in December 2000 Internet usage latest data, March 2007 % population (penetration)
Bahrain 40,000 155,000 21.0
Gaza/ West Bank 35,000 243,000 7.9
Iran 250,000 7,500,000 10.6
Iraq 12,500 36,000 0.1
Israel 1,270,000 3,700,000 51.1
Jordan 127,300 629,500 11.7
Kuwait 150,000 700,000 25.6
Lebanon 300,000 700,000 15.4
Oman 90,000 285,000 11.6
Qatar 30,000 219,000 26.6
Saudi Arabia 200,000 2,540,000 10.6
Syria 30,000 1,100,000 5.6
UAE 735,000 1,397,200 35.1
Yemen 15,000 220,000 1.0
Total 3,284,800 1,9424,700 10.0

Source: InternetWorldStats, Nielsen/ Net Ratings/ ITU

Alkhayat argues the region should use its geographic location between other emerging markets to attract the top global companies to invest. “Other countries such as Egypt and Syria, which have vast manpower potential, can draw on the example of Dubai,” says Alkhayat.

Others agree that the Middle East should make use of its geographic position but see an alternative route for IT development in other parts of the region. “The Middle East has to focus on what areas it should play in,” says Elkady. “For example, India is far ahead in terms of software development so we must focus on what we can develop and achieve. The development of application- oriented networks rather than traditional financial software is something the region should focus its efforts on.”

Intelligent information networks which allow access to information from a computer direct to a mobile phone are the sort of technologies which are becoming increasingly popular worldwide. “The region’s role could be to assist in the development of software for this kind of technology as well as providing a technical support role by setting up call centres to service markets in Europe,” says Elkady.

Countries such as Tunisia and Morocco could build on their French language skills while Egypt and Jordan can target the English-speaking market, with the time differences between North Africa and the Levant giving them a competitive advantage. “Service-related call centre businesses in Egypt, Morocco and Tunisia could provide a skilled, inexpensive option to Europe as well as the advantages of proximity and language ability,” says Ali Farawamy, executive vicepresident for Europe, Middle East & Africa at Microsoft.

But whichever route the region takes it will need finance to achieve its goals. Relying on investment from multinationals is only one part of the solution. IT start-ups across the region lack the support of a developed network of venture capital firms that they can call upon in comparison to the US and Europe. “The main pillar in creating an advanced IT society is to develop closer links between research and venture capital,” says Alkhayat. Most start-ups say they are still reliant on friends and family.

But in some parts of the region such as Jordan, government programmes have emerged with help from foreign backers to address the problem. Institutions such as National Fund for Enterprise Support (Nafes) were created to provide direct support to small and medium-sized enterprises with five to 100 employees, a category into which many start-ups fall.

The Japan International Cooperation Agency dedicated two years of research and development to helping Amman establish the operating structure of Nafes. Nevertheless, a persistent conservative attitude towards investing in start-ups is still one of the main reasons why few of them get off the ground.

Although problems such as these must be addressed if the Middle East is to move its technological revolution forward, it would be well to remember just how far some countries have come. “Even as short a time ago as early 2000, there were a lot of questions raised about investment in IT in the region,” says Farawamy. “But now with the Egyptian experience of e-government and the Jordanian experience in education, they are being used as examples at international conferences attended by countries from Asia and Africa.”