Outlook for technology
On March 30, 2021 by MEED in partnership with Oracle Construction & Engineering
The pandemic has highlighted the need for greater focus on digital transformation.
The 2020 Global Innovation Index (GII) report by the World Intellectual Property Organisation notes that “the current crisis hit the innovation landscape at a time when innovation was flourishing”.
The pandemic has not changed the potential for breakthrough technologies and innovation. The GII report states that top companies and research and development (R&D) spenders would be ill-advised to drop R&D, use of intellectual property (IP), and innovation in their quest to secure competitiveness.
Digitalisation will play an important role in the coming years, as cost pressures increase and companies struggle to ensure productivity and efficiency while still making a profit.
Nearly half of the survey participants said they strongly agree that Covid-19 will introduce a greater focus on digitalisation moving ahead. The Middle East is not new to technology. The UAE ranks 34 in the GII 2020 report, while Saudi Arabia is 66.
In the UAE in particular, knowledge economy has been prioritised for development. The UAE Ministry of Economy’s 2019 Annual Economic Report highlights that between 2014 to 2018, the country’s information and communications sector grew by a total of 27.2 per cent and at an average annual rate of 5.4 per cent. The digital economy now contributes 4.3 per cent to GDP, and that figure is predicted to rise substantially in the coming years.
Research from Gartner in March 2020 highlights that Middle East and North Africa IT spending is forecast to reach $160.24bn in 2020, recording 2.4 per cent growth compared to 2019 spending.
Much of this growth will be driven by enterprise software devices, which are expected to achieve double-digit growth in 2020. This trend will continue for the next three years as more organisations move to cloud-based products and services.
The majority of the MEED survey respondents said they would prioritise mobility and remote working options. One of the biggest challenges imposed by Covid-19 is the restriction on movements and social distancing measures. But companies are also finding that work that was previously conducted using paper and on-site physical meetings can easily be done through virtual calls and remote supervision systems.
“Remote construction sites are the future,” says one survey participant.
“Managing remote projects and day-to-day activities are feasible and cost effective and will improve supply chain management considerably.”
Nearly 25 per cent of the respondents also said design and construction coordination will be prioritised by their companies, while 14 per cent highlighted reporting and analytics.
However, E&C firms still lag behind their counterparts in other sectors when it comes to the adoption of technology. Nearly 56 per cent of the respondents said that a lack of awareness and top-down initiative to drive adoption are preventing E&C firms from investing in digital solutions. Cost was also highlighted as a reason by nearly 20 per cent of those surveyed.
“Construction and engineering industry needs lot of capital investment for digitalisation, and the prevalent economic circumstance will hinder it,” says a respondent.
Investors and procurers of projects can stimulate greater technology adoption in the construction sector. This can be done by setting minimum technology requirements on government projects, building local R&D capabilities and reducing barriers and risks unique to emerging technologies.
Download the full survey and findings below, including the markets view on challenges to come and opportunities such as digitisation of the sector.
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The pandemic has highlighted the need for greater focus on digital transformation in the Mid-East construction sector. Discover how rapid digitalisation will be needed if construction and engineering firms want to remain profitable under current conditions, from building information modelling to wearable helmets to remote management and which trends will shape the Middle East projects market in the coming years?
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