By Dylan Bowman
GITEX: Massive gov't spending fuelled by record oil revenues will drive growth over next five years.
Spending on IT in the Gulf is set to grow at an annual rate of 12 percent and above over the next five years despite the global economic downturn, a partner at consultancy A.T. Kearney said on Tuesday.
Speaking to Arabian Business prior to the publication of an A.T. Kearney ICT White Paper on the region, Dan Starta said growth is being driven by massive government spending fuelled by record oil revenues.
Starta said the biggest growth sectors are the telecoms, finance and government sectors, in which IT spend is predicted to grow annually by 15 percent, 14 percent and 13 percent respectively.
The most attractive market for IT companies is Saudi Arabia, followed by the United Arab Emirates, he said.
Starta said record oil revenues meant governments and companies in the region have not been hit by the credit crunch in the same way as those in other regions, and that there is still a lot of money available to be invested in IT.
“I wouldn’t necessarily say [the Gulf] is immune from the global issues that are going on, but the sources of funding for IT projects remain,” Starta said.
He said government projects and companies are still relatively young, which means there is still a lot more investment to be made, which will drive growth in IT spend.
“If you look at where there big projects are from a governmental perspective and where the companies are from a maturity perspective, they are at the cusp of really ramping up in the peak of their growth,” he said.
“So especially in the government, telecom and finance sectors I still don’t see much of a slowdown [in IT spend] yet,” he added.
The whitepaper, titled ‘The IT Market - A Middle East Perspective: An Overview of Business Opportunities for Innovative New Companies’, has been commissioned by Dubai Internet City (DIC) and will be launched at a gala dinner on Wednesday.