A drive to attract new investment for Jordan’s ICT sector is gaining ground, as the country moves to strengthen support structures for start-ups and encourage greater private sector participation.
While firmly established as a key component of the national economy, Jordan’s ICT industry has endured a turbulent 14 years, first emerging as a major driver of growth in the early 2000s, but more recently contracting under the weight of the global financial crisis.
The sector rallied in 2013, with ICT revenues increasing 3.4% year-on-year (y-o-y), while the introduction of a national strategy aimed at attracting foreign investment, particularly through public-private partnerships (PPPs), looks set to spearhead new growth.
Launched last year, the National Information and Communications Technology Strategy (NICTS) aims to increase ICT revenues from $2.2bn in 2013 to $3.5bn by 2017 as well as raise internet penetration to 85%. Under the wide-ranging plan, Jordan also hopes to boost ICT investment to $450m annually.
“Jordan is working to develop its business environment to be competitive on an international scale to avoid existing Jordanian ICT companies, management and capital being pushed into migrating abroad, as well as to encourage more start-ups,” Azzam Sleit, the minister for ICT, told OBG.
According to the minister, areas identified by the government for foreign investment include call centres, IT support centres and IT-enabled business process outsourcing. Content production, particularly in Arabic, is another area of focus, with content for mobile phones a primary target.
The NICTS highlights the need to improve the business environment in which ICT companies operate through measures such as updating regulatory framework and new legislation in areas of e-commerce and data protection. It also urges the government to provide “the most favourable possible tax treatment to e-commerce and e-businesses providers”.
All eyes on e-development
In a key development, Jordan’s Cabinet endorsed an electronic transactions law in November 2013. The legislation, which still requires parliamentary approval, would pave the way for electronic signatures to be recognised and accepted. In the meantime, the Telecommunications Regulatory Commission launched a three-month consultation in October on the licensing and accreditation of electronic authentication and electronic signature service providers.
Jordan has begun taking steps to boost confidence in its ICT sector, including setting up a cybercrime centre, which is currently under construction. The authorities are aware of the need to ensure that the ICT infrastructure and standards of education, described by the NICTS as key national strengths, are maintained.
The success of tech start-ups is helping to address Jordan’s steady exodus of IT developers to other markets. Of the roughly 5000-6000 IT graduates in Jordan each year, about 3000 go abroad for better wages. Several new programmes are under way to train and retain the local IT workforce. One such initiative is
int@j’s public-private partnership (PPP) with the MoICT and the Ministry of Labour to take advantage of the existing state-sponsored Graduate Internship Programme (GIP). Other proposals include setting up a national IT professional training and certification centre.
The plan also calls for the authorities to enable private sector players to make use of the national broadband network, which was initially built with government institutions in mind, as part of a broader bid to attract investment for infrastructural improvements. A new PPP law passed in September is expected to pave the way for greater private sector participation.
A survey of Jordan’s IT and IT-enabled services (ITES), which was carried out by the Ministry of Information and Communications Technology and industry representative group, the Information and Communications Technology Association (Int@j), confirmed that the sector performed well in 2013.
The data, which was published in September, showed that ITES revenues, though small, have risen rapidly in recent years, reaching $10.3m in 2013, up from $3.2m five years previously. Foreign direct investment, meanwhile, hit $4.18m, marking a three-year high. The number of internet users increased, with figures showing a year-end total of 5.3m, up 23% y-o-y. The number edged higher to reach 5.4m by the end of June, according to TRC data, pushing penetration levels up to 73% from 29% in 2009.
Exports performed particularly strongly, according to official data, with revenues rising 8% y-o-y in a third consecutive annual increase. Noting the positive sales abroad, the NICTS called for Jordan to consider developing a national export house, which would further strengthen the segment.