DOHA: Qatar is the Middle East’s leading Internet economy said a new report by The Boston Consulting Group (BCG), a global management consulting firm. The report also found that, globally, the difference between countries with large digital economies and those with low economic activity amounts to about 2.5 percent of GDP – a material figure for any nation.
The new study, titled “Which Wheels to Grease? Reducing Friction in the Internet Economy”, serves as a follow-up to BCG’s previous report The Connected World: Greasing the Wheels of the Internet Economy. The BCG e-Friction Index – introduced in last year’s study – then used those indicators to rank 65 economies according to four types of e-friction: infrastructure-related frictions; industry and individual frictions and information frictions. The new research expands on that and outlines how economies can move up the e-friction ladder.
The 2015 BCG e-Friction Index highlights that Qatar is a leader in the MENA region with a truly advanced and productive Internet economy. On a global level, Qatar is ranked 23rd in the Index — ahead of a number of strong emerging economies.
“In Qatar, consumers and businesses face few restrictions or constraints on digital activity – what we refer to as ‘e-friction,” said Joerg Hildebrandt, Partner and Managing Director at BCG Middle East. “The nations that are still lagging behind, however, both in the GCC and in the rest of the world, need to imminently address their sources of e-friction; after all, doing so could have a strong impact on national competitiveness as well as on social and economic development.”
He added, “Based on our study, the broad causes of e-friction include wealth, population density, the urban-rural population mix, literacy, and English-language skills. And, while some of these can be influenced by policy initiatives, others require more creative approaches.”
“The Internet has created an unprecedented environment for businesses to grow and flourish, thanks to its permission-less innovation, which makes it possible for everyone to explore the untapped opportunities of today’s digital economy,” said Baher Esmat, Vice President Stakeholder Engagement, Middle East of the Internet Corporation for Assigned Names and Numbers (ICANN), which commissioned the 2014 report and the update.
“Countries in the Middle East have the potential to grow their digital economy, and this report by BCG demonstrates how the UAE and Qatar are tapping into this potential and leading the way for growth.”
BCG’s research emphasizes the fact that wealth is a cause, not a determinant of e-friction. For countries with any given level of GDP, e-friction can vary significantly. For example, Qatar has the highest per capita GDP in the world ($146,000) according to the International Monetary Fund, yet it ranks 23rd on the BCG e-Friction Index.
