Middle East tech boom leads to high price of talent

December 14, 2022, 10:24 AM

One of the key business costs in 2022 was IT talent

7.5% growth in IT spending to $16.8bn, with 7.9% increase in 2023
Mena region needs to add 300m jobs by 2050 to achieve Vision goals
Need to recruit and train talent to implement the latest technologies

The most significant barrier to technology adoption in the Gulf is a shortage of talent, according to Miriam Burt, managing vice president at Gartner.

The latest forecast from the technological research and consulting firm revealed that IT spending in the Middle East and North Africa (Mena) region will total $178.1 billion in 2023, an increase of 3.1 percent from 2022. This compares to a global increase in spending of 5.1 percent.

Burt, who is based in the UAE, told a media roundtable on Tuesday that one of the key costs in 2022 was IT talent position and retention, which came at a “hefty premium”.

Falling under the category of IT Services, the forecast showed that there was 7.5 percent growth in spending this year to over $16.8 billion, with a further 7.9 percent increase expected into 2023.

“When we look at the more forward technologies (AI, IoT, 5G, AR and VR) we see that there is really a lack of talent to be able to advise and implement these technologies,” Burt said.

As a consequence Burt said that companies are investing in retraining and reskilling employees and are increasingly turning to outsourcing and managed services firms to deliver on their technology goals.

“They simply do not have that kind of talent in-house,” she said.

According to Mordor Intelligence, the GCC Managed Services Market is expected to register a compound annual growth rate of 9 percent during 2021-2026.

Burt said the situation is being heightened by the respective Vision goals set out by countries across the Middle East – including Saudi Arabia, Bahrain and Qatar’s Vision 2030, Kuwait’s Vision 2035, Oman’s Vision 2040 and the UAE’s Vision 2071.

“We don’t have enough digitally skilled people in the region, so we have to get that talent from elsewhere,” she said.

“Before we would get talent from various parts of the world and it would be focused mainly in the UAE, sometimes in Saudi.

“Because of the acceleration of the implementation of those visions, we’re now seeing huge projects such as Saudi’s Neom and Red Sea consuming talent from the region and from outside the region.”

Earlier this year a survey from global consultancy firm PwC revealed that Dubai-based software engineers can earn up to 30 percent more than similar workers in rival tech hubs in Europe, due to the ongoing skills shortage within the sector across the Middle East.

Amanda Line, a partner at PwC, said that the Mena region needs to create 300 million new jobs by 2050 in order to achieve its development goals.

“Our survey told us that in the UAE 46 percent of our respondents said there is a skill shortage. In Saudi Arabia, 58 percent said there is a skill shortage,” Line said.

“In the Middle East the need for specialist skills is even greater. That’s everything from your basic Microsoft, right the way through to cryptos, cloud computing and Web 3.”

According to Burt, the UAE is at the forefront of countries across the Middle East in terms of investment and adoption of the latest technologies, although she believed that may change in a matter of years because of the spending power of Saudi Arabia.

She said: “Because of Saudi trying to get to Vision 2030 quickly, it will start to spend more on applications, infrastructure and also talent.

“Another differentiator in the ways in which we see the technology landscape maturing is just how much economic power the various governments have to make these type of things happen.”