As part of its efforts to develop the digital economy, the government of Oman launched the National Digital Economy Programme (NDEP) in October 2021 to accelerate the sultanate’s technological transformation and build on the National ICT Strategy established in 2017. The programme is designed to aid the country’s progress in line with the goals of Oman Vision 2040, the country’s blueprint for its long-term socio-economic development. Vision 2040 envisages a diversified economy propelled by innovation and suitably equipped to compete in the global knowledge and information economy.
Oman Vision 2040
Boosting value addition while integrating strong circular economy and green economy principles are central to the Vision 2040 framework. Success in those areas will depend on Oman’s ability to integrate advanced technologies across all sectors of the economy. Under the NDEP, specific attention will be paid to manufacturing, fisheries, mining, education, transportation and logistics, as well as tourism. In addition, the education, research and innovation ecosystems are set to provide the basis for a prosperous digital economy.
The NDEP consists of a series of executive programmes focussed on artificial intelligence (AI) and advanced technologies (see overview), the digital transformation of the government, e-commerce, financial technology (fintech), space, infrastructure, digital industry and cybersecurity. Some of the objectives of these programmes include doubling the percentage of payments made electronically and increasing the contribution of the digital economy to GDP to 3% by 2025. Oman’s digital economy accounted for around 2% of GDP as of October 2022, with some 4500 companies employing over 30,000 employees identified as contributing to that figure. Through the NDEP the government aims to increase the digital economy’s contribution to the country’s GDP to 3% by 2025, 5% by 2030 and 10% by 2040.
Digital Government
According to the Oman Vision 2040 Implementation Follow-Up Unit’s 2021 annual report, the Government Digital Transformation Programme (GDTP) 2021-25 plans to streamline services and procedures in more than 50 government institutions. The programme looks to improve efficiency and transparency, simplify business models and implement frameworks to allow the government to swiftly integrate technological innovations.
Government data shows that the GDTP is already bearing fruit. Abdulaziz Al Kharusi, the programme’s director, said during a June 2022 press briefing that GDTP initiatives had saved the government nearly OR159m ($413m), equalling almost the OR170m ($442m) it had pledged to spend on the programme. Al Kharusi added that actual savings were likely higher, as some initiatives implemented in 2021 still needed time to gain traction.
In June 2022 the government signed an agreement to move its ICT infrastructure onto Oracle Cloud Infrastructure – a significant step in accelerating the expansion of Oman’s digital transformation. The implementation will be carried out by ITHCA Group, the ICT-oriented arm of the Oman Investment Authority, enhancing the sultanate’s localised management of data storage and protection, in addition to its latency parameters.
Improving the sultanate’s business environment is one of the keys to the country’s economic plans. Invest Easy Oman is the government’s e-portal for investment and business licensing. When it first launched in 2016, the e-portal offered online applications, registration and the issuance of around 800 types of business licences; by May 2022 that figure had risen to over 1500, or 88% of all types of business licences. The improvements made by Invest Easy in terms of efficiency, transparency and accessibility have doubled the number of business licences issued since the platform’s initial launch.
Workforce
Digital transformation necessitates the development of a diverse local talent pool, and national academic curricula are being adapted to this end. “It has not always been easy to find tech-related talent to match the country’s needs, and this is to be expected following the recent challenges faced by the economy,” Abdullah Al Sakiti, co-founder and COO of oil and gas well services provider Nafun International, told OBG. “The local ICT sector is once again attracting more talent due to the current positive growth scenario. Moving forwards, Oman needs to focus on helping new generations of workers develop the capabilities and skills that the future ICT labour market will require.”
GCC nations are taking a regional approach to strengthening ICT infrastructure and capacities. In November 2021 Oman and Saudi Arabia signed an agreement to enhance cooperation in digital transformation. Part of the agreement is workforce development, with the MTCIT and the Saudi Ministry of Communications and IT collaborating to design digital skills training programmes. As of October 2022, 120 Omanis had completed courses in cybersecurity, the internet of things, artificial intelligence and programming, with 240 starting the programme that month. For the second group, the course syllabus includes networking, network development, game development and business analysis modules. Oman’s international collaboration extends beyond the GCC, as the MTCIT signed a memorandum of understanding with Microsoft in May 2022. Microsoft will work to raise the capabilities of Omani students, academic institutions, public sector workers and small and medium-sized enterprises (SMEs) in the areas of digitalisation and AI.
Start-Up & SME Ecosystem
In Oman’s bid to advance its digital economy to benefit its business community and workforce, the government is cultivating a more vibrant start-up and innovation ecosystem, offering financial incentives and training programmes to entrepreneurs and SMEs. Technology start-ups are key to economic growth, innovation and job creation. SMEs accounted for around 15% of GDP in June 2022, a figure that Oman’s Public Authority for Small and Medium Enterprises Development (Riyada) expects to double over the medium term. Indeed, recent growth has been significant, with 81,460 enterprises registered with Riyada at the end of July 2022, a 46.8% increase from the corresponding month in 2021 when there were 55,491 SMEs registered. Around 16,800 of the entities were registered in the first seven months of 2022, compared to 6822 in the same period in 2021.
International collaboration is key to the government’s plans to strengthen its SME base and develop its digital economy. In December 2022 Oman hosted the Investment and Start-ups summit for local and international stakeholders. Attendees discussed methods through which investment could be attracted into Oman’s tech start-up scene, with broadening the sultanate’s base of incubators, accelerators and investment funds a key theme of the summit. One established start-up-funding facility is the Oman Technology Fund, which was established in 2016. The fund invests in various incubators, accelerators and venture capital programmes.
Targeted Areas
Fintech and e-commerce enterprises and infrastructure are integral to raising the efficiency of both business-to-business and business-to-consumer processes (see Banking chapter). Highlighting this, both segments have executive strategies dedicated to their development.
According to a 2019 survey conducted by Deloitte, companies that use fintech solutions are three times more likely to experience revenue growth. Dubai’s status as a global fintech leader and Saudi Arabia’s recent, rapid progress in developing its fintech capabilities both offer blueprints for success for Oman’s own expanding fintech sector.
Fintech applications are instrumental in conducting e-commerce activities, providing requisite payment solutions for online retail and wholesale platforms. Oman’s e-commerce segment has been on an upward trajectory for a number of years, with the Covid-19 pandemic resulting in increased activity and the reinforcement of related infrastructure.
In response to the sector’s growth and the government’s identification of e-commerce’s potential for enhancing commercial efficiency and revenue, the Ministry of Commerce, Industry and Investment Promotion established a dedicated Electronic Commerce Department in September 2019 that is responsible for formulating a set of regulations to guide the sultanate’s e-commerce growth. The establishment of the department and public statements by the ministry in July 2022 on a national plan to regulate e-commerce offer further evidence of the government’s willingness to create an attractive, modern business environment that benefits the local and international business communities.
