Industry 4.0 meant the technology sector was already growing steadily, however the sudden surge in remote working, online shopping, digital health and virtual learning boosted demand for business technology and communications solutions.
Across Saudi Arabia this surge further fortified the role of technology in alliance with Saudi Vision 2030 which aims to transform Saudi Arabia into a globally competitive ICT hub, with modern technologies and an empowered information society.
As one of the largest IT markets in the MENA region, with spending reaching USD45bn at the end of 2019, the country enjoys a strategic location to become a main IT service and cloud hub with access to international connectivity through the Red Sea and Gulf.
Furthermore, the countries e-commerce market size reached 28.5bn SAR1, which has since continued to grow at speed as a result of a post pandemic buying trends.
Businesses within Saudi Arabia and the wider Gulf need to consider the global IT trend and its impact to the region, along with businesses based in the industry.
In fact, Grant Thornton’s global research – which provides insight into the views and expectations of businesses – found that 44% of tech firms globally grew their revenue by more than 5% in 2020, compared to 35% across all industries. Additionally, 34% of tech firms grew their exports by over 5% and 21% moved into new geographic markets, compared to only 23% and 12% across all industries respectively.
As the world starts settling into the ‘new normal’, however, what will happen to this momentum? Some say 2020’s positive effects will linger well into 2021 and beyond, as people stick with new tech-enabled convenience and productivity. Others say some of the big winners in the pandemic won’t be as strongly positioned for a post-vaccine world. Our research shows that tech firms remain mostly on the cautious side of future business performance, with only 52% of firms expecting revenues to increase over the next 12 months.
Tech companies, and the services they provide, will be central in enabling the ‘new normal’, to continue to succeed, tech companies must be ready to adapt and rise to the challenges ahead. Across Saudi Arabia and the wider Gulf, the impending drive to diversify economies, build a digital-first approach and a heavy emphasis on tech driven investments and funding has further fortified the industry, bringing with it new opportunities which will drive buyer behaviour changes.
1. How can technology businesses build resilience against changing customer behaviour?
Customer behaviour changed almost overnight when the pandemic struck. Every industry had to pivot quickly in an ‘adapt or die’ scenario. Most behaviour changes resulted in a direct increase in technology dependence. For tech companies, many of the changes were already in the pipeline – just accelerated or magnified – putting them in a ‘grow or die’ scenario.
While optimism in many economies rose sharply, 63% of technology firms surveyed say economic uncertainty is a major constraint in growing and expanding their business. Another constraint highlighted globally by 52% of respondents and by 54% of technology firms was an anticipated pullback in customer spending in the next 12 months. This is especially pronounced in APAC, where 61% of companies expect reduced demand to constrain business performance.
Explore further statistics here, along with insights on how tech businesses build access and retain tech talent as demand heats up, along with how to navigate the complexity of the digital world.
Contact Imad Adileh, Principal of Saudi Arabia Grant Thornton to discuss your tech challenges further.