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Kuwait improves its competitiveness by advanced IT

Tuesday, 20 October 2009 19:16

Kuwait has long been a regional leader in the adoption and application of IT, being among the first countries in the Middle East to introduce and promote internet usage and mobile telephony. However, it may need to do more to maintain advantages in the rapidly evolving technological environment.

A recent study by economic analysis firm Business Monitor International said that while there had been reports of some IT projects being scaled back due to the downturn of the economy, total domestic IT spending would be around $794m this year, of which some $214m is forecast to be spent on software.

While expenditure on IT may be increasing, and having made significant progress in expanding and diversifying the country's economic base, Kuwait has been less successful in maintaining its IT utilisation at cutting-edge levels. Compared to some of its neighbours, Kuwait has low penetration rates for broadband, with just 41% of households having broadband access.

According to the World Economic Forum (WEF's) latest study on global competitiveness, Kuwait has slipped somewhat in the ranking overall to 39th out of the 133 economies assessed, though this may have more to do with others improving their rank. The country also rated less than strongly in the category of technological readiness, the assessment of the ability of an economy to adopt existing technologies to enhance productivity.

The WEF also noted that the widest utilisation of information and communications technology (ICT) is vital for the development of a competitive economy, as is the existence of a positive regulatory framework. This being an area Kuwait can improve on, having been ranked 99th globally for its ICT-related laws.

This is one of the key areas in which, according to the study, Kuwait needs to improve competitiveness, with the country being ranked 99th globally for its laws relating to ICT.

Though the latest assessment by the WEF clearly highlights some weaknesses, it also points to opportunities for IT providers and delivers guidelines for both public and private technology users seeking to improve their performance.

According to Khaled Faraj Al Saeid, the managing director of IT and software services provider International Turnkey Solutions, the demand for IT-related products is a direct reflection of a competitive environment.

"With heightened competition comes a stronger need for companies to seek out competitive advantages," Al Saeid told OBG. "One way in which this can be achieved is by implementing state-of-the-art IT systems and products."

Though cost is an important factor, even more so in harder economic times, Al Saeid says there is a need for a different approach to tenders for the provision of technology,

"It is my contention that the current system for qualifying tendering offers is somewhat flawed and requires further maturation," he said. "Too often contracts are awarded solely based on the lowest price."

Al Saeid also believes that the way IT is applied could change, as users look to cut costs.

"Given the current economic climate, outsourcing has become a top priority as organisations are restructuring and identifying ways in which to become leaner, more efficient and productive," he said.

As a result of that climate, GDP is projected to see a contraction of 1.2% for this year, while the government has opted to reduce state expenditure in response to the global financial crisis, rather than increase deficit spending as has been done by some other states in the region.

Though this policy means the state budget should be in surplus by year's end, there has been a shortage of liquidity in the marketplace, which could impact IT sales, at least in the short term.

By more closely embracing IT advances, Kuwait can sharpen its competitive edge.

Global Arab Network

This article is published in partnership with Oxford Business Group

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Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network