By accelerating the adoption of cloud computing, the United Arab Emirates (UAE) is poised to unlock an additional economic value of $181 billion over the next decade.
According to a report commissioned by Amazon Web Services (AWS), this amount represents 2.5 percent of the UAE’s cumulative GDP.
The findings of a comprehensive study conducted by Telecom Advisory Services, under the guidance of Raul Katz, Director of Business Strategy Research at the Columbia Institute for Tele-information (Columbia Business School), introduce an advanced econometric approach to measure the overall productivity gains experienced by economies that embrace cloud computing.
This research goes beyond previous studies that primarily focused on individual firms’ productivity, establishing cloud adoption as a catalyst for national productivity and economic expansion.
Accelerating the UAE economy with cloud
The report revealed that the UAE experienced a significant boost in its economy in 2021, thanks to the widespread adoption of public cloud services. It noted that this adoption contributed 2.26 percent to the country’s GDP, resulting in an economic value of $9.5 billion. Notably, this contribution represents the largest impact of public cloud adoption on GDP in the region. The positive influence on the economy is not limited to productivity alone but also encompasses the construction aspect of establishing and operating cloud infrastructures within the UAE. For instance, the AWS UAE Region is projected to contribute $11.2 billion to the UAE economy by 2036 and create nearly 6,000 full-time equivalent jobs annually.
In the MENA region, the UAE stands out as the country where cloud adoption drives the most significant economic growth through spillover effects. The report reveals that a one percent increase in cloud adoption by UAE organisations leads to an average GDP growth of 0.21 percent, equivalent to $854.7 million. This growth rate is three times higher than the MENA average, making it the highest in the region. Remarkably, over 91 percent of this impact can be attributed to the national productivity gains or spillover effects on the economy, while the remaining nine percent is driven by cloud spending from both public and private organisations in the UAE. As an economic catalyst, cloud computing proves to be 17 percent more effective in stimulating the UAE’s economy compared to mobile broadband.
Yasser Hassan, the Managing Director of the Commercial Sector in the MENAT region at AWS, highlighted that the findings underscore a remarkable opportunity for the UAE to expedite its economic growth and establish itself as an appealing and influential economic centre, which aligns with the government’s “We the UAE 2031” vision.
“As cloud computing continues to gain momentum, it is imperative for the UAE to continue to support cloud adoption and develop a skilled workforce to enhance the country’s competitiveness on a global scale. With the support of AWS, the UAE can accelerate its digital transformation and unlock new opportunities for economic growth and social development,” he added.
With a strong focus on digitisation, the UAE has set ambitious goals to diversify its economy. In 2021, cloud computing adoption among organisations in the UAE region reached 43 percent, slightly lower than the adoption rates of 49 percent observed in Western Europe and North America. However, with the government’s steadfast commitment to digital transformation, the UAE is well-positioned to emerge as a leading hub for cloud computing within the region.
The report highlights four primary benefits associated with cloud computing. Firstly, it enhances business efficiency and effectiveness by optimising processes and yielding improved outcomes. Secondly, it provides access to a diverse array of services, enabling businesses to harness advanced technologies. Thirdly, it enhances productivity by fostering collaboration, mobility, and agility among the workforce. Lastly, cloud computing contributes to environmental sustainability by reducing carbon emissions per unit of data transmitted.
