Small and medium-sized enterprises (SMEs) make up the vast majority of business in Qatar, as is the case in the broader MENA region. Enterprise Qatar, the state-backed SME support vehicle that was established in 2011 and has since been absorbed by Qatar Development Bank, reported that SMEs constitute some 97% of the private sector. Qatar Development Bank further notes that between 8000 and 10,000 SMEs currently operate in the country, contributing some 15% to 17% of non-oil GDP, markedly lower than regional and international benchmarks. The development of this sector is therefore a core part of Qatar’s development plan, Qatar National Vision 2030, the strategy of which is diversifying the economy away from oil and gas revenues.
IT POTENTIAL: The scale of SME operations offers significant potential for the application of IT solutions to reduce the cost of doing business and to drive sales. Deloitte, the global consulting and accounting firm, forecast that SMEs in the Middle East will have increased their expenditure on ICT services to $22bn in 2014, representing 10% growth over the previous year.
This spending, which is driven by an expansion in the number of SMEs operating in the region and the growing need for core IT services such as website development, e-commerce, and cloud computing, represents over 23% of the total ICT spending in the region. Despite the size of this market, Deloitte estimates significant potential for future growth. The consulting firm notes that SMEs in the Middle East spend an average of $20,000 on ICT services, which is less than one-tenth of what SMEs in Western Europe spend and 13 times less than what is spent in North America.
A survey prepared by the ministry, ictQATAR, in 2012 revealed that 83% of SMEs spent less than 10% of their budget on ICT services. However, the survey also revealed that 42% of SMEs were planning to invest in cloud services within the next three years.
SME SUPPORTERS: A number of public and private players are eyeing this potential market. Along with direct business support, many initiatives are focused on using Qatar’s IT infrastructure to support SMEs. ictQATAR, for example, has developed an ICT SME Toolkit that outlines how cutting-edge IT solutions, such as cloud services, can benefit their businesses. Microsoft is also increasing its role within the market for SME IT solutions. In 2014 the software giant committed to supporting up to 10,000 SMEs with communications and data services that will enable businesses to virtually engage with other industry players. Local companies are also targeting SMEs with cloud services. Qatar’s Mannai Corporation’s ICT group, for example, is collaborating with Ooredoo and Microsoft to provide tailored cloud-based IT and communications solutions for SMEs.
INCUBATION: Qatar also has a number of business incubation programmes targeting SMEs and start-ups in the IT sector. ictQATAR, for example, houses a Digital Incubation Centre to assist small-scale technology enterprises. The centre offers three types of support: marketing and entrepreneurship engagement, start-up assistance and shared services.
The number of businesses that have emerged from the programme continues to grow. Souq Jalis, for example, is an online marketplace that started at the Digital Incubation Centre with a target of establishing an e-commerce portal that combines the concept of traditional souqs with an online platform for small-scale retailers in Qatar. Qubicle is another SME that has its roots in the centre. Established by four young Qataris, the company has recently launched Evently, the country’s first event listing mobile application.
Qatar Foundation’s Qatar Science and Technology Park (QSTP) is also playing a major role in nurturing a new wave of SMEs. QSTP has shifted towards supporting SMEs to help develop an enterprise community around the IT sector. QSTP has helped local firms expand in Qatar. iHorizons, which operates out of QSTP, has participated in the technology zone’s “Proof of Concept” funding scheme and is now developing an Arabic-language social media analytics application that will look at Arabic content on global media platforms such as Twitter.
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