With a strong ecosystem in place, the coming years should see Abu Dhabi more deeply embedding advanced technologies in government and business procedures to propel economic growth. The emirate benefits from its advanced digital infrastructure, with the emirate and the UAE both having achieved high rankings in multiple global digital readiness indices. Governments across the GCC have traditionally been the key funding bodies for economic development programmes, but a region-wide focus on reducing government spending and attracting private investment has taken centre stage. In a bid to establish the UAE and its constituent emirates as leading investment destinations, federal and emirate-level authorities are implementing advanced digital government services to increase bureaucratic transparency, and make business procedures and transactions more efficient.
Various funds have been rolled out by federal and emirate-level government bodies in recent years, enabling technology start-ups to flourish, while investment incentive packages are attracting internationally prominent firms. Regulatory frameworks covering advanced technology have been enacted and updated. With the UAE now a leading destination for ICT-related investment in the GCC, the country aims to expand beyond the MENA region to become a global centre of technology and innovation. Considering its financial resources and status, Abu Dhabi is set to play a key role in this effort.
Structure & Oversight
The UAE’s Telecommunications Regulatory Authority was established by Decree No. 3 of 2003 to regulate the country’s telecommunications sector and enable the smart transformation of national and emirate-level government bodies. In April 2021 the authority announced that it had changed its name to the Telecommunications and Digital Government Regulatory Authority (TDRA), reflecting how the digitisation of government services and operations in recent years has become a national strategic priority. The TDRA’s duties include overseeing licensing procedures and criteria, resolving disputes, promoting the development of disruptive technologies, and enhancing national ICT-related human capital through training and public awareness initiatives. As of April 2023 more than 1500 federal government services were provided through over 180 smart platforms and apps, while up-to-date information on a range of topics was available across 500 government websites. In addition, there are more than 280 government service centres offering resources and assistance.
At the emirate level, the Abu Dhabi Digital Authority (ADDA) works to implement the goals laid out by the TDRA’s digital government strategy, formulating and implementing initiatives, policies and partnerships for Abu Dhabi. Its key areas of focus are government services; government solutions; data and artificial intelligence (AI); cybersecurity; and digital enablement. ADDA’s various policies and standards relating to those areas can be viewed on its official website.
In August 2022 the Abu Dhabi Blockchain and Virtual Assets Committee held its first meeting. The body is filled by high-ranking stakeholders in various public entities, such as Masdar and Abu Dhabi Global Market. The committee’s focus is on promoting compliance with global practices and local regulations, regulating blockchain-related activities and boosting the emirate’s competitiveness in the segment. In doing so, Abu Dhabi aims to attract investment in high-growth sectors in which blockchain technology is a core operational component. Those sectors include agriculture technology, financial technology (fintech), health care and biopharma, energy, tourism and ICT.
Strategy
At the federal level, the UAE Digital Government Strategy 2025 aims to accelerate the implementation of digital government services across the country’s seven emirates. The strategy was formulated partly in response to gaps and inefficiencies highlighted in the government’s service provision by the stresses of the Covid-19 pandemic. It therefore features a strong focus on digital inclusion, and increasing the resilience and adaptability of society in times of crisis through the digitisation of vital services. Cross-ministerial and cross-sectoral digital integration is also a priority.
The core objectives of the new strategy see the government working to establish and maintain a globally competitive digital infrastructure with user-friendly services and applications; offer a platform and digital enablers; provide integrated digital services tailored to user needs; improve local digital literacy and competencies; establish robust legislative and regulatory frameworks for using advanced digital technologies; and increase the efficiency of government work. In addition, the UAE Digital Government roadmap is playing a role in the primary strategy. The roadmap is designed to align with the country’s digital transformation-related strategies, including the Unified Digital Platform Policy, the National Policy for Quality of Digital Life and the UAE Strategy for AI, among others, while also operating alongside emirate-specific digital initiatives.
The Abu Dhabi eGovernment Strategy aims to catalyse the emirate’s digital transformation. A core component of the strategy is the unified digital government services portal, TAMM. This system is the primary service point for individuals, businesses, and visa and residency procedures, making it vital for foreign investors. “Abu Dhabi is investing heavily in digital transformation to improve the delivery of government services, foster innovation and drive economic growth,” Mohamed A Haykal, executive chairman of Abu Dhabi-based business software firm Transtek Systems, told OBG.
In March 2023 the TDRA announced that its Government Services Bus initiative, which six federal and two emirate-level entities joined in April 2017 to establish interconnectivity and data-sharing facilities between federal and local government authorities to streamline customer service, had recorded 1bn transactions. In addition, ADDA’s drive to digitise government services has seen a range of plans and initiatives recently implemented. In October 2022 ADDA announced during GITEX Global, a technology expo, that it had enlisted US technology company Cisco to implement its Country Digital Transformation programme in Abu Dhabi. Cisco tailors such programmes to the requirements of each place, establishing the capacity necessary to deliver advanced value-added digital services.
Harnessing Data
In January 2022 the UAE’s Personal Data Protection Law took effect. The new legislation refines data security and privacy protocols, and applies to companies that process the data of UAE citizens and residents inside or outside of the country. Key articles in the new law cover issues such as data storage limitations, transparency on how data is processed, data breaches and their potential impacts on individual privacy, and greater rights for citizens relating to both data security and data erasure. Meanwhile, tighter regulations on cross-border data transfers and third-party involvement have been established. Entities exempt from the provisions of the new law are those that do not process large amounts of personal data; in addition, the law does not apply to data related to government entities, personal health, personal banking and credit information, or free zones, as there is separate legislation on these matters.
ADDA also unveiled the Abu Dhabi Data Programme at the GITEX 2022 expo. Through this programme, ADDA intends to work towards more deeply integrating data analytics, and AI processes and capabilities into government services and operations. By facilitating skills development and enabling a more streamlined flow of data between government entities, the government of Abu Dhabi plans to establish itself as a centre of excellence in data management.
Size & Performance
GDP at constant prices for Abu Dhabi’s ICT sector increased in real terms by over 33% between 2014 and 2021, the latter being the most recent full-year data for which the Statistics Centre – Abu Dhabi (SCAD) had published data as of September 2023 rising from Dh20.6bn ($5.6bn) in 2014 to Dh27.5bn ($7.5bn) in 2021. During that same period, the sector’s contribution to total GDP at constant prices rose from 2.1% to 2.7%. Sector growth has seen a series of fluctuations in recent years, registering a 1.6% contraction in 2019 before expanding by 9.5% in 2020, then moderating to a growth of 4.1% in 2021. SCAD’s preliminary data for the first quarter of 2023 put the sector’s share of GDP at constant prices at 2.8%, its highest level since reaching 3% in the first quarter of 2021. The same data set indicated that the sector began 2023 with a year-on-year (y-o-y) growth of 4.6% for the first quarter, compared to 4.7% and 6.6% y-o-y for the third and fourth quarters of 2022.
Looking ahead, the UAE Ministry of Economy expects spending on software and applications in the country to grow at an 11% compound annual growth rate (CAGR) until 2024, contributing to an overall ICT CAGR of 8% to a total value of $23bn that year. The ministry also expects national revenue derived from ICT hardware and infrastructure to reach $6bn by 2024, and forecasts that AI will contribute $96bn, or 14%, to GDP by 2030.
Telecommunications
The UAE’s telecommunications services market was valued at $8.4bn in 2022, according to UK-based analytics and consultancy firm Global Data, and was forecast to expand at a compound annual rate of 2% through to 2027. In February 2022 Etisalat, the UAE’s largest telecommunications operator, was rebranded as e&, marking the company’s new direction as a global player focused on digitalisation and advanced technologies. Emirates Integrated Telecommunications Company – known commercially as du – is e&’s main competitor in the UAE telecommunications market, offering mobile, fixed-line, broadband and IPTV services to individuals, households and businesses. The company is expanding its range of services to better harness next-generation technologies. The 2023 Mobile World Congress held in Barcelona in February-March 2023 brought the announcement that du had signed a memorandum of understanding with Cisco to accelerate du’s digital transformation. The telecommunications company intends to use Cisco’s services to equip itself to harness technologies and capabilities such as AI, automation, cybersecurity, metaverse-ready networks, and private 5G and quantum-ready networks.
Of the UAE’s total population of 10.09m in 2023, an estimated 10.07m use the internet, 9.20m use mobile internet and 9.69m own smartphones. Indeed, nearly 63.7% of all internet traffic in the UAE is generated from mobile phones. The average broadband speed as of April 2023 was 189.1 Mbps, whereas the average speed of mobile data was 238.1 Mbps. According to the TDRA, in the UAE at the end of 2022 there were more than 20m active mobile subscriptions, around 79% of which were pre-paid, and nearly 3.8m internet subscriptions, all of which utilised broadband connections.
According to Ookla, a US-based network intelligence company, the UAE was the fastest 5G market in the world in the second quarter of 2023, recording a median download speed of more than 557 Mbps. With 5G being a well-established feature of the country’s telecommunications market, operators are laying the infrastructural groundwork for even faster speeds. In August 2023 du announced that it had started rolling out multi-carrier aggregation technologies that could potentially make internet speeds up to three times faster for home wireless service users.
Abu Dhabi is also positioning itself at the forefront of 6G development, with the inaugural 6G Summit held in the emirate in November 2022 for global innovators and stakeholders. Organised by the Technology Innovation Institute (TII), which forms part of the Abu Dhabi government’s Advanced Technology Research Council, the second edition of the summit is scheduled to be held in November 2023, with the intention of shaping the dialogue and setting the agenda for the development and deployment of 6G networks worldwide.
Investment
The UAE Ministry of Economy describes the ICT sector as being composed of six distinct segments: AI, cybersecurity, internet of things, software and computer systems, telecommunications and 3D printing, with significant opportunities for private investment in each. Total foreign investment in Abu Dhabi’s ICT sector rose from Dh7.1bn ($1.9bn) in 2013 to close to Dh39bn ($10.6bn) in 2021, recording a 25.8% growth between 2019 and 2020 alone before contracting by 0.9% between 2020 and 2021. The percentage of the emirate’s total foreign investment accounted for by the ICT sector nearly doubled from 2.7% in 2013 to 5.1% in 2021. Of the aforementioned total stock in the ICT sector in 2021, Dh552m ($150.3m) was classified as foreign direct investment (FDI), marking a 380% increase from Dh145m ($39.5m) in 2013. Before increasing by short of 265% in 2021, the level of FDI in the sector had consistently fallen since 2017, with the 33% drop recorded in 2020 reflecting the pandemic and the implementation of new sector strategies. From 2020 to 2021 the percentage of Abu Dhabi’s total FDI in the ICT sector rose from 0.1% to 0.5%, respectively.
In its bid to stimulate greater inflows of FDI into the sector, the federal government launched the NextGenFDI initiative in July 2022. The programme is designed to attract globally prominent tech firms to invest and establish operations inside the UAE, with 300 companies being targeted. The range of incentives being offered under the banner of NextGenFDI include enhanced business set-up procedures to speed up the licensing process, improved access to project financing, streamlined visa processes, and an attractive range of commercial and residential leasing options.
Key funding and investment bodies are engaged in both helping develop the Abu Dhabi innovation space, and mapping and implementing their own strategies to incorporate a keener focus on technology companies. In January 2023 the Abu Dhabi Investment Office announced that it had signed deals that would see French video and mobile-game coder Ubisoft, Hong Kong-based biotechnology firm Insilico Medicine and UK-founded Applied AI Company all integrated into the emirate’s research, development and innovation ecosystem. Indeed, the types of projects undertaken by these companies reflect both the national and emirate-level focus on driving economic expansion by developing high-value, high-growth segments.
AI & Cybersecurity
In March 2023 the TII’s AI and Digital Science Research Centre announced that it had teamed up with the Mohamed bin Zayed University of AI to deepen the technology’s integration in the emirate and move towards becoming a smart city by 2030 through the enhancement of its cybersecurity and AI capabilities. The partnership is set to see associate professors, post-doctoral fellows, and PhD and post-graduate students trained and mentored for three years by the institutions’ leading scientists in the fields of AI, smart-city applications and cybersecurity.
Indeed, the rate of technological change has led to a significant shortage in global cybersecurity skills. Given the UAE and Abu Dhabi’s aim to become global data and ICT centres, there is also a high-level drive to advance progress in cybersecurity. In October 2022 the UAE government launched its first Cyber Pulse Innovation Lab, a joint initiative between the UAE government, Abu Dhabi Polytechnic and Chinese technology multinational Huawei. The lab provides top ICT talent in the UAE with the opportunity to get hands-on experience tackling cyberthreats, in line with the country’s pledge to attract 100,000 coders under its Projects of the 50 initiative. This collaborative approach is planned to be more deeply integrated, with the UAE Cybersecurity Council stating that it believes public-private partnerships are required in this area. A whole-of-industry approach has been adopted to adequately stay abreast of advanced cybersecurity threats. Supply-chain disruptions from cyberattacks are believed to be a primary risk resulting from advanced AI capabilities, while entities in the health care and financial services sectors have also been identified among those groups requiring greater protection from such threats.
In addition, starting in September 2022 ADDA ran a three-month campaign to raise cybersecurity awareness among government employees and the general population. Three separate themes – Your Password is your Shield, Protect your Data and Don’t be a Victim of Social Engineering Attacks – were employed over a three-month period to help protect people and the emirate’s digital infrastructure against cyberattacks.
Outlook
The outlook appears largely positive for Abu Dhabi’s ICT sector. The level of digitisation achieved in relation to government services is enabling significant time and cost savings, and the subsequent increased efficiency of business procedures is helping the emirate make progress towards its private investment and economic diversification targets. Elsewhere, robust regulatory frameworks covering specific types of advanced technology should inspire investor confidence.
In addition, with a destination’s digital readiness becoming increasingly influential when it comes to companies deciding where to invest and establish operations, Abu Dhabi’s efforts to build on its successful 5G rollout and position itself at the forefront of 6G innovation is certain to not go unnoticed. Indeed, the recent restructuring of the UAE’s major telecommunications players and other concerted efforts to develop and nurture ICT ecosystems suggest preparation for the next phases of digital evolution and integration.
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