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Dubai ranks 18th in new index of top digital cities

Dubai ranked among the world''s smartest cities for connectivity, services, culture and sustainability
  • The Economist surveyed across 30 countries about digitisation impact

Dubai is the only Middle Eastern city to be highlighted in the 2022 Digital Cities Index (DCI) 2022 – a new ranking of 30 global cities across four key pillars: connectivity, services, culture and sustainability.

Ranked 18th with an overall score of 63.8, the city’s position highlights its forward-thinking approach to the digitised economy, underpinned by digital skills, e-government, and imminent advances in digital payments.

The DCI 2022, conducted by The Economist, surveyed 3,000 residents across 30 countries and assessed the impact of digitisation, across quantitative metrics like internet speed.

It also assessed qualitative factors, such as strategies and plans for technologies like 5G and AI. 

Dubai ranks among the top 10 performers in digital finance, with an index score of 60 compiled using the following indicators: digital platforms for banking and personal finance, digital investment and management tools, and e-payments. 

Digital skills

The emirate also performed well on digital skills levels – from basic functional skills to more advanced competencies, such as coding, troubleshooting technical issues and mitigating cyber threats. 

The DCI report which accompanies the DCI 2022 notes that digital skills are highest in emerging market cities, with New Delhi, Dubai, Jakarta, Beijing, Mexico City, Manila and Bangkok ranking as the top seven. 

In 2017, the Dubai Future Foundation launched One Million Arab Coders to equip a million young people with the skills needed to succeed in the 21st century. 

It brought together experienced trainers in software sciences and advanced technologies in the world to voluntarily train participants from about 80 countries.

Those who took part have completed five million hours of study and work, 76,000 training workshops and 100,000 capstone projects.

Visas attracting talent

In July last year, Dubai announced 100,000 golden visas for entrepreneurs and startups well versed in coding. 

“It’s now becoming easier to attract talent for our UAE and Saudi-based customers,” Shankar Garg, managing director for the Middle East and Africa at Xebia, a US-headquartered global IT consultancy that advises UAE companies on their digitisation strategies, told AGBI.

“A tax-free status was always very attractive but now if someone can get a 10-year visa, that provides you with stability on top of your tax-free income.” 

e-government is a priority

Dubai also scored highly on residents’ satisfaction with e-government portals. When asked if they were comfortable providing personal and financial information on such platforms, the largest share of respondents answering affirmatively were in New Delhi (80 percent), Dubai (79 percent), Beijing (73 percent), Bangkok (68 percent) and Jakarta (67 percent).

The Dubai government has made the implementation of digital infrastructure a key strategic priority in recent years. 

“I think there are three key reasons why it is prioritising digital strategy,” said Garg. 

“The first is to advance the ease of doing business. For example, it launched the Dubai Paperless Initiative in 2021 with the aim being that any interaction that you need with any government entity can be done via the Dubai Now app. 

“Secondly, improving economies of scale and thirdly, the cost-saving benefits of doing everything online.” 

Digital payments

In May, the UAE central bank announced it was launching a real-time payment scheme early next year, which will serve to further strengthen Dubai’s digital finance offering. 

The UAE’s Instant Payments Platform aims to provide best-in-class payment services, as well as promoting financial inclusion and increasing the nation’s financial stability.

“While a significant portion of payments made in the UAE continue to be cash-based, we are now seeing a steady shift towards digital alternatives,” Santhosh Rao, senior vice president for Middle East, Africa and South Asia sales at ACI Worldwide, which provides the technology for banks to help them connect to national real-time payment schemes, told AGBI. 

“The Central Bank of the UAE has announced its National Payment Systems Strategy (NPSS).

“That will bring universal interoperability to payment systems and transition the nation to a cashless society, with instant payments at its core.”

Rao said the NPSS will encourage a real-time, 24-7, payment culture, and the establishment of open banking as the means to catalyse economic growth. 

According to a recent report published by ACI Worldwide, 28 million real-time transactions were made in the UAE in 2021. This figure is projected to grow to an impressive 134 million by 2026, representing a five-year CAGR of 36.5 percent. 

Real-time payments accounted for 3.2 percent of overall non-paper-based transactions in 2021 and are expected to account for 10.4 percent of all electronic payments in the Emirates by 2026.

Committed, but more to do

Dubai’s commitment to advancing its digital economy has been highlighted in recent weeks. 

In July, it rolled out incentives to attract 300 digital companies within six months to a year under the first phase of the NextGenFDI initiative which is aimed at attracting FDI and positioning it as a tech hub. 

The same month, Dubai crown prince Sheikh Hamdan bin Mohammed announced the Dubai Metaverse Strategy with an aim to place the emirate among the top 10 metaverse economies in the world. 

The emirate has set itself goals of attracting more than 1,000 firms in the sector, generating up to $4 billion in extra GDP by 2030 and supporting as many as 40,000 virtual jobs.

However, while Dubai’s investment in its digital ecosystem has paid off on several fronts, it also performed poorly in some areas of the 2022 DCI. 

The emirate ranks as the most expensive city for affordability of mobile data, with the average cost of 1GB of mobile data equating to 0.55 percent of personal disposable income.

In terms of internet freedoms and protection, the DCI finds that European and North American cities offer the strongest safeguards. Meanwhile, Beijing, Dubai, Bangkok, Jakarta and New Delhi score below 50. 

According to the 2022 DCI, the top three ranked countries were Copenhagen (81.5), Amsterdam (74.6) and Beijing (73.7) while the three weakest performers were Mexico City (42.6), New Delhi (40.3) and Manila (39.1).