Investments in Qatar's digital landscape, particularly in cloud computing, are at an all-time high and Microsoft Azure Qatar national framework is set to create opportunities for more than $3.1bn new revenue for the country over the next five years, according to the Economist Intelligence Unit (EIU).
Moreover, driven by a strong ambition to continue developing local talent and capabilities, Qatar has taken imperative steps to increase supply chain localisation such as encouraging joint ventures with global firms, leveraging the natural resources and creating a culture of innovation and entrepreneurship, said the report.
Qatar's investment drive in the digital sector comes as part of efforts to implement the country’s digital transformation agenda and build a knowledge-based economy, said the report ‘The Power of Proximity: Localising Supply Chains in the Middle East', sponsored by the Qatar Free Zones Authority (QFZA).
Both Google and Microsoft are expanding their cloud services offerings to the country, the report highlighted.
Google Cloud provides companies with infrastructure, platform capabilities and industry solutions to reinvent their business with data-powered innovation using modern computing infrastructure, the report said.
It delivers cloud solutions that help companies operate more efficiently, modernise for growth and innovate for the future, it said, adding Google Cloud platform regions are the cornerstone of Google’s cloud infrastructure, “delivering high-performance, low latency, zero emissions, cloud-based services to users throughout the world”
In 2020, Google signed a "strategic" collaboration agreement to launch its inaugural Google Cloud region in the Middle East in Doha.
"The region is set to allow Google’s global customers and partners to run their workloads locally," the EIU report said.
Earlier, in 2019, the Government of Qatar had entered into a strategic partnership with Microsoft to establish a regional cloud data centre in the country to deliver its cloud services and expand its global cloud infrastructure to new markets.
Three Microsoft Azure cloud data centres are set to start operating in Qatar in 2022, enabling individuals and organisations to access cloud services, and facilitating their digital transformation.
According to Microsoft, the Azure Qatar national framework is set to create opportunities amounting to over $3.1bn of new revenue for the country over the next five years and establish Qatar’s position as a digital hub.
On leveraging the natural resource, the EIU report highlighted the country’s hydrocarbon bellwether Qatar Petroleum’s Tawteen programme, which aims to increase supply chain localisation in the country’s energy sector.
In the case of creating a culture of innovation and entrepreneurship through Qatar free zones, the report said DHL Express is investing $33mn to set up a major logistics facility in Ras BuFontas free zone.
The report also found that the GCC and Levant nations have courted supply chain localisation through local content policies, investment promotion reforms to encourage foreign direct investment (FDI), and improvements to their logistics and technology infrastructure.
“The Gulf Co-operation Council (GCC) has become a central node for international trade in the recent years, especially through the establishment of free zones,” the report said.
Highlighting that supply chain localisation approaches have varied across countries in the GCC and in line with their economic growth strategies; the report said smaller countries like Qatar has emphasised openness to international talent and a “hub and gateway” economic strategy.
Multinational companies have realised a range of benefits from localisation in the region, including greater customer-centricity and improved agility, it said, adding improvements in the region's logistics sectors, especially in the GCC, are enablers that can attract further local production in the future.
By employing local content policies to further the supply chain localisation objectives, oil-rich Gulf countries are following a well-trodden path pioneered by the likes of Norway, which developed national oil company Statoil through knowledge-sharing agreement with international companies.
The public cloud market in the GCC is expected to more than double in value to $2.35bn in 2024, the report said, quoting International Data Corporation.
Globally, governments, particularly in the Gulf, are increasingly investing in their digital infrastructure and in making their cities "smart".
The EIU report also said the globalisation of the GCC airlines, including Qatar Airways, and the region's growing integration into international maritime and air trade through its seaport and airport infrastructure, has played a large role in the Gulf's logistics transformation.