A connected community: State support and private enterprise are spurring ICT development

Internet usage in Qatar has expanded, with fixed broadband subscriptions enjoying steady growth in the past decade. At the end of 2011, Qatar’s internet user penetration rate clocked in at 81.6%, far ahead of the Arab states’ average of 29.1% and the global average of 34.7%, according to the UN’s International Telecommunications Union. The financial size of the market has been increasing as well, thanks in part to extensive government support and improving infrastructure.

The government estimates that the information and communications technology (ICT) market will expand to $3.7bn by 2013. The country’s hardware market is set to reach QR1bn ($274.6m) by the end of 2012, while software could be as high as QR380m ($104.3m), according to a report released by Business Monitor International. The study expects IT spending to reach as high as $533m and grow 14% per annum.

THE REGULATOR: The government is doing its part to nurture the sector as part of its broader goal of expanding Qatar’s knowledge-based economy. In the “Global Technology Report 2010-11”, an international executive survey conducted by the World Economic Forum, Qatar ranked second worldwide in “government prioritisation of ICT” and “importance of ICT to government vision”, and first in “government procurement of advanced technology”. The state has established a number of entities to encourage the sector’s development. The largest of these is the Supreme Council of Information and Communication Technology (ictQATAR). Created in 2004 by Emiri decree, ictQATAR is charged with regulating the market, encouraging technological innovation and helping Qataris become more proficient with new technologies. On June 19, 2011 ictQATAR published Qatar’s National ICT Plan 2015: Advancing the Digital Agenda (ICT-2015). The plan has five strategic thrusts: improving connectivity, boosting capacity, fostering economic development, enhancing public services and advancing societal benefits.

E-GOVERNMENT: In line with ICT-2015’s goals to introduce more IT into the everyday lives of Qataris, ictQATAR launched Hukoomi (“my government”), Qatar’s official e-government portal, in 2008. Hukoomi integrates government services, programmes and initiatives with sub-portals that include transactional services as well as legal forms, employment announcements and government tenders. Usage for the platform is growing. About two-thirds of residents are aware of e-government services, and about a quarter have ever used them, according to Qatar’s “ICT Landscape 2011”, a report published by ictQATAR. Satisfaction rates, meanwhile, are generally high. Of the platform’s users, 83% reported satisfactory experiences, with only 4% stating they were dissatisfied. Enhanced e-government services are also reflected in Qatar’s improved ranking in the UN’s e-Government Survey. Between 2010 and 2012, the state moved up from 90 to 27 out of 190 countries.

Increasing use of e-government tools could do much to improve government operations by cutting costs and simplifying access to public services. Use of the platform could also have far-reaching effects on the ICT landscape by improving technological literacy.

DOSE OF FIBRE: The IT sector has also benefitted from sound infrastructure and continual upgrades. Qatar’s network readiness was ranked 25th out of 138 countries analysed in the World Economic Forum’s “Global Information Technology Information Report 2010-11”, making it one of three Arab countries in the top 30.

Internet usage is set for a major boost from the introduction of the $550m Qatar National Broadband Network (Q.NBN), which aims to create a network with fibre-to-the-home connections to ensure high-speed internet access across the state. The goal is to have 95% of the population connected at rates as fast as 100 megabits per second (Mbps). ictQATAR plans to use Q.NBN to provide a fibre backbone for internet service providers, who can lease bandwidth from the public network for their services. Using this model, operators can focus on customer service and value rather than building infrastructure. Qtel and Vodafone, the state’s two licensed telecoms operators, offer Internet services.

Extensive work is also under way to connect the Gulf to the rest of the world’s submarine cable networks. Gulf Bridge International (GBI) is leading the charge with a series of submarine cable projects. The company, which is the region’s first privately owned submarine cable operator, has its headquarters in Qatar Science and Technology Park (QSTP) and counts Qatar Foundation (QF), the Qatar Investment Authority and the Kuwait Investment Authority among its top investors. In March 2011 the company linked up a new cable at Vodafone’s international cable landing station north of Doha. A month later, the company connected another fibre cable to Qtel’s nearby landing station.

On December 20, 2011 GBI announced the completion of network segments in the Gulf, the Red Sea and the Mediterranean Sea. The network, built jointly by GBI and its partner TE SubCom, has a 5.18-Terabit capacity that will enable faster connections and more real-time communication across borders.

“Demand in the Middle East for international bandwidth is doubling year-on-year as a result of continued liberalisation in the region,” John McLean, marketing director at GBI, told OBG. “The ambition to attract finance companies to the region is also assisting in demand as international connectivity is vital.”

DIGITAL MARKETPLACE: As internet infrastructure continues to improve, consumers and web industries alike could benefit from faster, more reliable connections. Online retail, or e-commerce, is a relatively new trend in the Middle East and the GCC. Despite its recent arrival, the digital marketplace has grown significantly in recent years. Business-to-consumer transactions in the GCC reached an estimated $5bn in 2011, according to a 2011 study released by Visa and Interactive Media in Retail Group International. “Online shopping is still in its infancy in the region,” Stephen Leeds, e-commerce business leader for Visa Middle East, told international press following the release of the report. “But all the signs are there that it will continue to grow, such as government commitment, retailer investment and – most importantly – a young population open to trying new technologies and innovations.”

Qatar’s e-commerce sector has also seen significant growth. Total volume increased 60% from $375m to an estimated $600m in 2011, according to the Visa study. To facilitate continued growth of online retail, the state enacted its first comprehensive e-commerce law in mid-2010. Modelled on UN and EU regulations, the law provides a legal framework to deal with matters like electronic transactions and signatures. “Businesses in Qatar were eagerly awaiting the enactment of Qatar’s e-commerce law, which clarifies important business issues such as e-signatures, e-transactions, e-documentation and online authorisation,” Ahmad Al Kuwari, the manager of ICT market development at ictQATAR, said following the law’s enactment. “ictQATAR believes this law will allow businesses here to develop innovative online business models and offerings.”

APPS DEVELOPMENT: E-commerce has benefitted from the rise of the global apps market, which has helped attract more users to the web and boost online transaction numbers. In October 2011 Apple reported 18bn app downloads from its App Store. Google, meanwhile, announced two months later that 10bn apps had been downloaded from its Play marketplace.

A number of sector stakeholders have set their sights on growing the app market in Qatar and across the MENA region. “Localisation and globalisation of applications offer huge opportunities at the moment,” Mohamad Takriti, the CEO of Doha-based software and content management firm iHorizons, told OBG. “There is a clear gap to fill in increasing digital Arabic content in the fields of education and health.”

IN ARABIC: In addition to creating new applications, institutions are also working with major developers to ensure existing content is accessible in Arabic. QF has been working through its member organisations to further this goal. In April 2012 QSTP announced the launch of a platform called Loghati – meaning “my language” in Arabic – to facilitate the creation of online repositories of Arabic-language materials. Instant translations to and from Arabic are integrated into the programme, meaning that non-Arabic-speakers can also access and use the documents. “The Arabic language is poetic, but it risks being marginalised because it has not modernised to meet today’s challenges,” Sheikha Moza bint Nasser, wife of the Emir and chairperson of QF, said in Rome following the presentation of Loghati. “We need to revitalise the language.”

Two years earlier, Qatar Computing Research Institute (QCRI), a research centre working on a series of technological focus areas, announced a partnership with Wikimedia Foundation to boost Arabic language content on Wikipedia, the free online encyclopaedia that has grown to become the world’s largest. ictQATAR, for its part, has also been teaming up with major web companies to boost content. In February 2012, the government agency announced a hook-up with US-based web firm Yahoo! to encourage the development of Arabic content and continue developing the Middle East and North Africa region’s digital ecosystem (see analysis).

The Qatar Assistive Technology Centre (Mada), meanwhile, is providing resources for developers who want to adapt their assistive technologies for Arabic speakers. In October 2011 Mada and UK-based Crick Software collaborated on developing an Arabic version of Clicker 5, a computer-based learning and literacy aid. Mada has been prolific in its technological investments and partnerships, spending QR1.5m ($411,900) in its initial phase of localisation efforts, the organisation said. “This initial investment constitutes a huge step in our ability to use assistive technologies to fill the digital gap in Qatar, and we will hopefully create a domino effect throughout the Arab world,” Faleh Al Naemi, the CEO of Mada, said in the announcement. Indeed, investments in software localisation could beget a number of benefits for the state: attracting international expertise, boosting overall Arabic software available and fostering IT advances within Qatar.

PROTECTING CONTENT: Content creation in Arabic could do much to spur Qatar’s presence in the digital economy, but content creators will likely continue to seek out effective ways to prevent software piracy. Indeed, around the world, piracy is a prevalent issue for content creators who depend on sales (rather than other means like advertisements) for revenues. “Piracy is a global problem,” Naim Yazbeck, the country manager at Microsoft Qatar, told OBG. “In Qatar piracy is almost 49%, [but] acceptable levels for this market should be between 30 and 40%. So there is a lot of work to be done. The good thing is that all the authorities and parties involved are very committed to tackling this problem.” ictQATAR has been working to develop laws that protect intellectual property (IP) rights.

Between 2005 and 2011, software piracy rates declined by 9% thanks to regulation and enforcement improvements, according to a study by US-based organisations Business Software Alliance and International Data Corporation. The challenge in protecting IP is writing legislation that strikes a balance, allowing inventors to profit from their technologies, while at the same time not stifling the innovations of newcomers.

RESEARCH & DEVELOPMENT: Protecting IP is set to be crucial as institutions ramp up funding for independent research. As in content development, QF is at the forefront of these efforts. Through its member institutions, QF provides funding and physical infrastructure to facilitate technological innovation.

QSTP, a QF member institution, has been working to develop commercial technologies for energy, environment, health sciences and ICT since starting operations in 2004. The $600m campus hosts 36 member groups, including Rolls-Royce, Total, Microsoft and General Electric (GE). Alongside these corporations are a number of university research programmes for local students and support programmes for rising entrepreneurs. QSTP also has the advantage of being a free-trade zone, including rights to 100% foreign ownership, expatriate labour, tax-free operations and unrestricted repatriation of capital and profits. So far QSTP has attracted $225m of investment from its members and international and domestic companies. In addition to QSTP, QF sponsors a series of other technologically oriented institutions. These include Knowledge Ventures, a wholly owned ICT investment subsidiary, and QCRI.

AHEAD IN THE CLOUD: One of QCRI’s focus areas, cloud computing, has been gaining traction in the ICT industry. Cloud computing is based on the idea that applications, files and other data should be available on any device, any time through the internet. Cloud computing is infinitely scalable, as it makes shared computing resources available on demand and each user is charged only for what they use, according to Simon Ponsford, a senior scientist at QCRI. In the realm of software, for example, cloud applications are centrally located on the developers’ servers and accessible via the web. When developers upgrade the application, the updates are automatically available to all users, eliminating the need for manual upgrades. Fixed costs are also lower, since infrastructure-like data servers and fibre cables can be outsourced. In addition to cutting costs, cloud computing can also boost productivity by allowing more collaboration and remote work.

“Cloud computing is considered the second major revolution in the way we consume technology,” Yazbeck told OBG. “Here in Qatar the small and medium-sized enterprise [SME] sector will flourish as a result of its accessibility, and the cost of business will reduce drastically, leading to a higher adoption rate.”

Organisations such as QCRI have identified cloud innovations as a priority. Finding ways to best utilise this technology in Qatar could help the state’s ICT sector as a whole by improving overall productivity and boosting the pace of development, according to QCRI. Carnegie Mellon Qatar, a member of Education City, also opened a Cloud Computing Laboratory in 2009. The lab focuses on researching ways to enable cloud computing applications in the Gulf and the greater Middle East. As QF, QSTP and other stakeholders act to stimulate more SME activities, increasingly advanced cloud computing tools could do much to reduce barriers to entry and encourage ICT entrepreneurs.

HEALTH APPLICATIONS: ICT initiatives are also being undertaken to create new technologies in the health field. At QSTP, partnerships in medicine are growing as independent researchers and industry majors work side-by-side to create and export medical technologies. In 2009, for example, QSTP signed an agreement with US-based GE to collaborate on creating technologies for early breast cancer detection. The resulting technology, called contrast-enhanced spectral mammography, was presented at the Arab Health 2011 conference in Dubai. “A few years back, it was not even a dream that Qatari people working in Qatar could have written software for a product done by GE and sold around the world,” Lucio Rispo, the strategic research director of QSTP, told OBG. “This is a reality now.” Another programme, called RASAD, is working to develop systems that transfer patients’ medical information wirelessly for preventative treatment monitoring. The system uses remote sensor technology designed at QSTP with help from ASPETAR, the Qatar Orthopaedic and Sports Medicine Hospital. In April 2012 QSTP licensed RASAD to the city of Rome, which will start using the technology for its health care services. These successes in health technologies indicate that the state is beginning to see returns on its tech investments.

THE RIGHT SKILLS: Although many scientists working in Qatar have received their educations in foreign institutions, the state is working to retain local talent and attract more bright students from abroad. “There is no shortage of groups and associations available for the support of entrepreneurs and SMEs. The major challenge is how to build success in this field against the public sector, which seems to attract all the local graduates with ease,” said Allyson Vanstone, the dean of Virginia Commonwealth University Qatar (VCUQ atar). Through programmes at Education City, students interested in technology and ICT have a wide array of opportunities, from design and communications at VCUQ atar to computer science and information systems at Carnegie Mellon University Qatar. Schools offer internships to incorporate professional experience into their curricula and ensure educational practices do not lose touch with labour market needs. QF member institutions such as QSTP and QCRI have undergraduate and graduate student internships in fields such as cloud computing and data analytics. By investing in top-notch educational institutions, the state is building a rich research environment and cultivating a pool of local talent to contribute to the ICT sector’s labour requirements.

OUTLOOK: Of all the investments the state is making in its drive for economic diversification, the IT sector appears to hold the potential for significant returns. Developments in IT can lead to a more connected and educated workforce, meaning that virtually every sector stands to gain. Building infrastructure is a task that takes only a few years, but cultivating a culture of research will take significantly longer. To that end, QF and its member institutions are working to fast-track programmes that will support the development of a more educated, more research-savvy population.

Finding ways to apply newly created knowledge is another challenge at the heart of this work. Successes at QSTP and elsewhere, however, have demonstrated that the research taking place in Qatar can be made to fit the needs of the market. Despite the challenges that lie ahead, the sector is rich with opportunity. With the support of financial resources, a growing number of institutions and a rapidly expanding economy, an increasingly favourable IT landscape is materialising.