Tech and Innovation in MENA

The Middle East is undergoing a digital transformation, with much of the region actively contributing to an innovation and technology revolution.

Artificial Intelligence

The application of artificial intelligence (AI) in the region is one area that many countries are prioritizing. A recent report indicates that Saudi Arabia and the United Arab Emirates (UAE) are leading the AI market in the Middle East and North Africa (MENA) region, with the market projected to grow from $500 million in 2020 to $8.4 billion by 2026. Yet another report estimates that AI could contribute up to $15.7 trillion to the global economy by 2030, with $320 billion generated from the Middle East.

CEOs in the region have shown a strong interest in investing in the rapidly growing sector, with over 70% of those surveyed investing heavily in AI, and over 80% confirming the technology to be essential to the future of their businesses.

The demand for IT professionals is on the rise, as the region continues along its path toward becoming a major technology hub. Therefore, AI has the potential to transform the way Middle Eastern organizations operate, expanding the capabilities of digital tools and aiding employees at all levels to work more creatively and with increasing efficiency.

The UAE’s National Artificial Intelligence Strategy 2031 “aims at positioning the UAE as a global leader in artificial intelligence by 2031, and to develop an integrated system that employs artificial intelligence in vital areas in the UAE,” as part of UAE Centennial 2071, with the objective “to make the UAE the best country in the world by 2071.”

Tech Startups

The MENA region is currently experiencing a surge in its tech startup scene, with a new crop of wealthy investors, government backing, and gifted entrepreneurs. Startups in the region attracted a record-breaking $3.94 billion in funding in 2022, with the heaviest concentration of deals in the UAE, Saudi Arabia, and Egypt.

“[Sovereign wealth funds] have a mandate to enable ecosystems locally. They can move the needle with their big checks, but it’s not just the money. This also moves the regulators to act and build the best environments for entrepreneurs. This also attracts talent. All three - funding, regulations, and talent - are in the best place I’ve ever seen it.”

All this according to Fadi Ghandour, the Founder of Aramex and Executive Chairman of Wamda.

In terms of sectors, fintech was the most funded in the MENA region, attracting $1.1 billion in investment, while 2022 saw 18 AI/deep tech startups receive $34 million in investments.

Note: In our commitment at MarketX Ventures to equity across all fields and geographies, we must inform you that women-founded startups only attracted 1.3% of the total amount raised, with startups founded by men attracting 94% of investments.

The MENA region has consistently produced successful entrepreneurs, but the ecosystem is flourishing at unprecedented levels. The future is very bright for the MENA region's tech startups, and the rise of sovereign wealth fund investments and government support is likely to continue driving growth in the coming years.

Tech and Innovation in MENA

The Middle East is undergoing a digital transformation, with much of the region actively contributing to an innovation and technology revolution.

Published: Apr 28th, 2023

The Middle East is undergoing a digital transformation, with much of the region actively contributing to an innovation and technology revolution.