High Internet penetration has UAE, Qatar leading in Mideast growth

The UAE has retained its position as the leader in the Middle East's Internet economy for the second year in a row. (Image: Shutterstock)

The UAE has retained its position as the leader in the Middle East's Internet economy for the second year in a row, resulting in improved economic performance.

A new report by The Boston Consulting Group (BCG), a global management consulting firm studied a total of 65 countries and found that, both the UAE and Qatar are two leaders in the Middle East and Africa region with advanced and productive Internet economies.

On a global level, the Index ranks the two countries 24 and 23, respectively, ahead of a number of strong emerging economies.

"In the UAE and in Qatar, consumers and businesses face few restrictions or constraints on digital activity - what we refer to as 'e-friction," said Hermann Riedl, Partner and Managing Director at BCG Middle East.

According to the BCG, the difference between countries with large digital economies and those with low economic activity amounts to about 2.5 per cent of GDP.

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 2014 analysis identified 55 indicators of e-friction that inhibit online activity by consumers, businesses and governments.

The economies were ranked based on four types of e-friction: infrastructure-related frictions that limit basic access; industry and individual frictions that affect the ability of companies and consumers to engage in online transactions; and information frictions that involve availability of, and access to, online content.

"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."

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