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Emerging Markets: No More BRICS in the Wall?


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As major economies continue to struggle and previously up and coming
markets such as Brazil and China mature, IDG Connect investigates
opinion on the next emerging markets. With expanded background on
Indonesia, Vietnam, Myanmar and Qatar, this paper also presents local
opinions from experts on the ground.

Published in: Technology
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Emerging Markets: No More BRICS in the Wall?

  1. 1. EMERGINGMARKETSNo More BRICS In The Wall?As major economies continue to struggle and previously up and comingmarkets such as Brazil and China mature, IDG Connect investigatesopinion on the next emerging markets. With expanded background onIndonesia, Vietnam, Myanmar and Qatar, this paper also presents localopinions from experts on the ground. 7th December 2012
  2. 2. CONTENTSEMERGING MARKETS 3Introduction 3Findings 3End of BRICS? 4INDONESIA: BOOMTIME 5Expert Opinion - Ali Abdali, 6Strategic Advisor QG, IndosatVIETNAM: WAITING FOR THE TURNING POINT 7Expert Opinion - Vu-Thanh Nguyen, 9Industry Analyst, Founder Joyful.LYMYANMAR: ASIA’S UNPOLISHED GEM 11Expert Opinion - John Naing, 13Citrix Systems, Systems AdministratorQATAR: A RECIPE FOR SUCCESS 14Expert Opinion - Krishna Gopal, 15Business Advisor - Middle East & AfricaCONCLUSION 16
  3. 3. INTRODUCTIONAs economic troubles continue to plague mature markets, organizations are continuously looking towards newpastures in which to establish themselves. IDC predicts that emerging markets will contribute for 53% of 2012’sglobal ICT growth. Knowing which of these countries is next to boom is invaluable for companies looking toexpand or balance lack of growth in more established environments. To test opinion, we conducted a straw pollof 675 global IT and business professionals on which country they felt was about to boom and why. This reportprovides an overview of the results, highlighting the views of the voters, as well as analysing the findings andgiving background on the featured countries.FINDINGSThe results show an overwhelming favourite in Indonesia, which claimed a massive 36% of the vote. Reasons citedwere varied, including a large population in the hundreds of millions, close proximity to other important marketssuch as China, Australia, Singapore and South Korea, and a “large population that is slowly developing from 3rdworld base to greater prosperity.” Another interviewee noted; “With a population of over 150 million, most of theyounger population speaking English, and with the economy improving, the IT market will only explode in thenear future.”The second most popular choices was Vietnam. Its “Which of the below do you think will be the next big ITlow-cost labour, proximity to China and rapidly market?”expanding IT sectors were the main drivers inpeople’s choices. “I think Vietnam already hasproven a very cost-efficient flexibility along with Other 11% 1% Cambodiamulti-skilled professionals,” one intervieweesaid. “I’ve done some work with developers from 4% UgandaVietnam and they’re improving their abilitiesreally fast,” noted another. Meanwhile, third place 6% MyanmarQatar’s hosting of the 2022 FIFA World Cup and 6% Iraqcontinually high spending thanks to oil revenueswere big drivers of choice. “Qatar is spending on a 8% Israellot of investment within the country infrastructureand building a strong potential competitor to the 11% QatarUAE and in specific Dubai,” said one interviewee. 17% Vietnam“In this respect keeping their goals and roadmap inmind they can be the next big IT market.” 36% IndonesiaIn fourth, Myanmar’s recent release from militaryrule and easing of sanctions from countries such as [Source: IDG Connect]the US means people are seeing a promising future.“People there may be slow to adopt but lots of companies will be vying to gain a presence there resulting in biggerrequirements in IT,” said one respondent. Israel’s focus on innovation and investment in R&D was seen as thecountry’s most attractive feature, while the large population and potential growth of Africa was the focus for thosewho chose Uganda. Many felt the government’s lack of IT infrastructure was also a potential investment point.Featuring countries from every corner of every continent, the “other” option showed an incredibly wide rangeof choices, spanning 31 countries. Answers ranged from Trinidad & Tobago to Mongolia, but the overall impacton the survey was minimal. Demonstrating the wide influence of IT across the world, the range of answers showboth the massive untapped potential of IT and its unpredictable nature. 3
  4. 4. END OF BRICS RULE?From our results there seemed to be a clear message; BRICS countries are the past, and the APAC region isthe future. Just 5% of respondents chose BRICS countries, compared to 61% who named APAC countries (notincluding China or India). Even the Middle East seems a more promising market, with 15% of respondentschoosing it as the next boom region.The reasons for this are varied. BRICS countries 80have all experienced tremendous growth in [Source: IDG Connect]recent years, but that trend has slowed - the 70IMF recently cut its 2012 and 2013 growthexpectations for China, India and Brazil for 60example. The countries have also seen largeinvestments in their technology & telecoms 50markets, and while not reaching saturation Percentagepoint, are fast approaching it. 40This stands in stark contrast to other countriessuch as Myanmar. Recently opened up to the 30world after years of military rule, companiessuch as Coca-Cola are entering the market there. 20IDC named the country an ‘unpolished gem;virtually one of the last untapped ICT markets 10in the APAC region’ and predicted 15% growthin IT spending in 2012 alone, while research 0by IDG Connect found that almost 70% of IT Don’t know Africa Middle East BRICS APACprofessionals predict a surge in the IT marketthere. One respondent commented, “Even ifnot Indonesia in the end, I believe the next bigIT market will be in south-east Asia, due to itscountries’ gross domestic products, even duringthe global financial crisis.”The Middle East too has a similar story. While many parts of the region have well-established infrastructure, manyexpect greater spending thanks to government oil wealth. Iraq sees a similar situation to Myanmar, as years of warhave left the country lacking infrastructure but looking to make up ground quickly. Previous research from IDGConnect showed that 66% of IT professionals think IT in Iraq presents an opportunity for foreign companies. 4
  5. 5. INDONESIA: BOOMTIME [Source: We are Social 2012] 22% 18% 80% Internet of of online penetration population population 109% 55m users Users on social Internet users Mobile penetration networksBMI is expecting Indonesian IT spending to reach US$6bn this year, up 12% on the year before, so thingsare looking good. “The market has much growth potential,” the report says, but warns, “Indonesia’s unevendevelopment and digital divide are major barriers to faster growth within this potentially huge IT market.”Currently the country has around 55 million internet users according to Internet World Stats, the eigth most inthe world. But that’s just a tiny fraction (22%) of its 245 million population. That fraction is growing however;the number of internet users saw 29% year-on-year growth, and the signs are good this is going to improve.Predictions point to 76 million users by 2015. Like other countries in the region, Indonesia has been investingin undersea cables. Soon after finishing the Malaysia to Indonesia Batam-Dumai-Melaka (BDM) system, a new4,600km Australia-Indonesia-Singapore cable was announced. More cables means cheaper access and betterquality connections, something that always helps foster growth.Despite these numbers, it’s clearly the majority are accessing the web while on the go, and not from a desk. Whilemobile penetration is at 54%, Metrodata Electronics put PC penetration at a mere 5%, and the majority of thosewere netbooks. However, these figures are also on the increase with PC sales growing by 36% last year, and couldrise by around the same amount this year. According to StatCounter, Windows XP is still the most popular OS,with Win7 not too far behind. Firefox is the most popular web browser by far, with Chrome following a distantsecond.Unlike everywhere else in the world, BlackBerry still has a strong following in Indonesia, and accounts for 12million out of around 77 million users worldwide. According to ROA Holdings Analysis, smartphone penetrationstands at around 60% and is expected to rise even further. Tablets are also on the rise. While just 700,000 weresold in the last year, the fourth quarter of last year saw sales spike by almost 100%, and indications are good thatthis will continue to grow at a rapid pace.This strong relationship with mobile internet is helping drive Indonesia’s love of social media. While 1 millionIndonesians may have left Facebook in the last three months according to Socialbakers, the social network stillboasts over 40 million users. That number puts the country fourth in the world, still 2 million ahead of the UK.While the recent loss of such a high number of people may be concerning, it may just be a blip, and with only16% penetration, there is still huge potential. One of the reasons for this exodus could be the growing number ofphishing scams on the site that are masquerading as adult videos and photos of Indonesian celebs. Perhaps bettereducation on security would help. 5
  6. 6. It’s not just Facebook that’s popular. Since the launch of a local language site, LinkedIn has grown quickly, withover a million joining in its first two months. Twitter is also a favourite; in January Indonesia was fifth worldwidein terms of users. Though these figures are from the start of the year, a quick view on A World Of Tweets willshow the country is among the most active on the micro blogging site. Online games are also popular; TMG’sKotaGames saw 85% month-on-month growth earlier in the year.Though a free country, the government does seem wary of the internet and has made several moves to censor itover the years. The Guardian rates the country as having ‘selective’ or ‘substantial’ censoring for political, social,and internet tools. The most recent case was the blocking of over a million porn sites ahead of Ramadan. Whilethis is no big loss for the internet, censoring one kind of site could easily lead to more, and be the start of aslippery slope.Indonesia has some real plus points. Mobility is on the increase and becoming more widespread, and the layingof cables will no doubt help facilitate this. Aside from the occasional effort to censor parts of the internet, thegovernment is helping to push things in the right direction. But with millions still not benefiting, there is still along way to go. Expert Opinion Ali Abdali, Strategic Advisor, Indosat Indonesia provides products and services globally. Yet there is already a definite need for 24/7 operational IT infrastructure. The big necessities here are disaster recovery mechanism, a secure environment, an up- to-date data center, stable transmission and agile infrastructure to support business and services around the clock. I believe cloud computing is the answer to all this. The cloud offers embedded security, redundant data accessibility and online backup. It also allows governments to manage a large, dynamic and mobile population within many entry points (airports, sea ports and land borders) and a fast influx of tourists, business travellers and migrants. To be successful, the journey towards the cloud needs to be carefully planned, prepared and implemented. Firstly, there is the choice between private, public, hybrid and community clouds. This selection is crucial to the business, and its operation can have serious implications for the cost of the project. It is important to choose a service model and understand the business’ priority. On top of which, it is crucial to note that the adoption of the cloud will necessitate a change in the business’ management and IT mindset. Compared to traditional IT, the cloud forces a new way of thinking where the staff no longer have to ‘procure the required software and hardware’, but rather simply select the optimal program configuration. A shift in management is therefore required in order for IT to concentrate on service utilization instead of the usual asset ownership. This can be a long journey which makes it important for businesses to start migration as soon as possible. It is my firm belief that cloud computing is key to the future in Indonesia. As it continues to become a crucial Asian production center, the country desperately needs to start its cloud computing journey. This is the only true way to enable the country, and its businesses, to grow and perform. 6
  7. 7. VIETNAM - WAITING FOR THE TURNING POINT Users on social Internet users Mobile penetration networks 30m users 34% 8% 86% 139% Internet of of online penetration population population [Source: We are Social 2012]South East Asia is an area of IT extremes. On the one hand, you have world leaders such as South Korea andSingapore, while other places, like Burma, are completely open and void of major IT industries. Vietnam falls intothe second category, but the landscape might soon be changing.IDC have predicted good things for both countries. For Vietnam, the research firm has called 2012 a turning point.It predicts IT spending to increase by 19% and the size of the IT market will reach $3.25 billion. “2012 will be a yearthat marks the powerful move of Vietnam ICT market,” says Lam Nguyen, country director, IDC Vietnam. “Onlineservices will grow strongly because of the high development of devices with high capacity of Internet connection,plus the possibility of using the Internet of most people in urban areas and diverse services from service providerssuch as digital content, online payment, trading services, or even dealing with government agencies only withconvenient mouse clicks.” If this is all comes to pass, Vietnam will be among the top IT spenders in APAC regionin 2012, thanks to adoption of cloud computing, the opening up of the telecoms industry (of the 100 million-plussubscribers, 90% of the market share is captured by one company, Vinaphone), and the rise of e-payments.The Vietnamese government has been consulting with foreign experts and authorities from 63 cities and provinceson rolling out ICT to the country. According to the Deputy Minister Nguyen Minh Hong, the Ministry ofInformation and Communications has asked local authorities to increase the involvement of private sector in IT.“Vietnam considers ICT a key industry and one of the most important driving forces for economic development,”he said. 7
  8. 8. The total number of smartphones in Vietnam is expected to rise by 5% this year to 21%, totalling a rise of around2.7 million units. An increase in the percentage of smartphone owners using apps is predicted to increase from35% to 40% thanks to more e/m-commerce services. In order to help facilitate this growth, the government aimsto increase the number of people using mobile phone services to 90% of its population by 2015 and 95% by 2020,including getting 45% of the population using the Internet by 2015. The current figure stands at around 30%, oraround 30 million, placing the country 18th in the world for internet users. Tablets are also poised to become a bigthing. In Vietnam, tablet penetration currently stands at 2%, but it’s expected to rise 92% by the end of the year,while Cambodians are one of the keenest users of the internet on their devices.Vietnam has a less than stellar human rights records, buthas been especially harsh on the blogosphere. A number of “2012 will be a year thatpro-democracy bloggers have been arrested and jailed for marks the powerful movepublicising their views, while the government blocks access topolitically sensitive websites and requires internet cafe owners of Vietnam ICT market”to monitor and store information about users’ online activities.Hopefully the opening up of neighbouring Myanmar and its Lam Nguyen, country director,easing of restrictions may encourage others in the region to IDC Vietnamfollow suit.Both countries have seen rapid surge in social media, seeing 59% growth though still only reaching 8% of theoverall population. The high Vietnam figures are fairly surprising, as Facebook is blocked within the country,though its Firewall is easy to circumvent. Although these censorship issues (especially in Vietnam) need to beaddressed, both countries seem to be on the right track for embracing IT and incorporating it into becoming animportant part of everyday life. 8
  9. 9. Analyst Opinion Vu-Thanh Nguyen, Industry Analyst, Founder Joyful.LYPotentials of Vietnam ICT market:In the long term, Vietnam could become an important ICT market in ASEAN for several reasons.▶▶ It’s an emerging market with expanding ICT demand. Within 10 years from 2000 to 2010, Vietnam’sICT market grew 19-fold and reached a total spending of $US 17 billion, according to Vietnam Ministryof Information and Communications. It is expected to continue growing at an annual rate of 15-20%over the next few years.▶▶ On the consumer side, Vietnam has a large, young and educated population with a growing appetitefor ICT products and services. Of the estimated 91.5 million population, a quarter are under 15 yearsold and by 2050, it is expected to have the 15th largest population in the world - the second largestpopulation in ASEAN after Indonesia. Together with a literacy rate of 94%, a mobile penetration ratearound 130% (118.5 million subscribers in February 2012), and a private consumption rate around 65%total Vietnam GDP (US$ 71 billion in 2010), the consumer ICT market in Vietnam is and will continueto be a large market in ASEAN.▶▶ On the business side, most Vietnam businesses are still in the early phase of ICT adoption.According to AMI-Partners, the Business ICT Adoption (BIA) index of Vietnam small and mediumbusinesses is 10 points out of 100; lower than that of Indonesia (12 points), India (18), Phillipines (19).Therefore government agencies, banks, telecom players, and businesses are investing substantially ontheir ICT infrastructure.▶▶ Vietnam’s government is especially committed to develop ICT as a strategic economic sector - witha targeted 8-10% GDP contribution by 2020 - and so are investing heavily in ICT infrastructure anddriving ICT adoption, as well as encouraging foreign investments in IT parks with various incentiveslike free land rental, low income tax (10% for 15 years), and import - tax exemptions. That’s why bigICT players like Alcatel, Intel, Canon, Microsoft, IBM, Oracle, Motorola, NEC, Ericsson, Siemens, andSamsung keep investing in Vietnam.▶▶ According to Gartner and AT Kearney, Vietnam is among the top 10 global locations for softwareoutsourcing and it’s growing rapidly to serve Japanese, European, and US markets. Many companiesare outsourcing part of their IT development/testing or setting up IT teams in Vietnam to cut cost andreduce the risk of putting all of their eggs in India or China.▶▶ As corporate taxes and the cost to do business in China have increased over the years, especiallyafter recent riots against Japanese companies in China, many companies are looking to diversify theirinvestments to other countries like Indonesia, Vietnam, Thailand, Myanmar. These foreign companieswill need ICT products and services to conduct their businesses, which will drive up local ICT marketsin these countries, including Vietnam. 9
  10. 10. Problems in the Vietnam ICT market▶▶ Human resources: The rapid development of new technologies and growth of the Vietnammarket created a shortage of skilled ICT professionals, especially those with international exposureand management skills. Every year, there are about 20,000 ICT graduates to join the workforce, butthey still need to be trained on the job for specific ICT skills. However, due to its history, Vietnamhas a large number of people that speak French, Russian, Chinese and English, as well as millions ofoverseas Vietnamese. They could be the bridge for ICT players to do business in Vietnam or to provideoutsourcing/services to markets that require these languages.▶▶ Software piracy: The high rate of software piracy among consumer markets means it is easier tosell hardware instead of software to consumers and SMBs. Things are a little bit better in governmentagencies and large businesses, as they have capital to invest on ICT and intellectual property laws arebetter enforced in these sectors.▶▶ High inflation: Vietnam’s economy suffers noticeably high inflation and its currency has alsodevalued over the last few years. This will affect businesses in their pricing, payment and other financialactivities. However, cheap currency also creates opportunities for export-oriented services like softwareoutsourcing and hardware manufacturing.▶▶ Corruption, bureaucracy, changing policies, weak and non-transparent law enforcement aresubstantial problems for the economy in the whole, as well as for the ICT sector. While special treatmentis given to foreign-invested companies, they could be indirectly affected in businesses with their localpartners, who aren’t receiving such favoured treatments.Opportunities for vendors▶▶ In the next 1-2 years, the biggest opportunities for ICT players in Vietnam would be hardware/software for public sectors, banking, telecom, and large businesses. Small and medium businesseswill need standard hardware and telecommunication services. For consumers, telecom services andelectronic devices (smartphones, tablets, PCs) will be their main spending.▶▶ Overall, hardware spending still dominates Vietnam’s total ICT spending, but businesses graduallyunderstand the importance of software, integrated solutions and after-sale services. For long-termdevelopment, vendors should do more to educate the market on these matters.▶▶ Although Vietnam’s telecom network has developed rapidly, it will still need to develop its wiredbroadband infrastructure (e.g., fiber networks) to businesses and homes. This will require a long-termcommitment and investment from government, telecom players, and vendors. Vietnam also needsmuch higher international bandwidth compared to the current level, as the government is aiming toprovide internet access to 70% of its 91 million population by 2020. 10
  11. 11. MYANMAR - ASIA’S UNPOLISHED GEM [Source: We are Social 2012] 1% 0.8% 80% Internet penetration of of online 4% population population 500,000 users Users on social Internet users networks Mobile penetrationDespite Myanmars checkered past, in the last 12 months the country has turned a corner. The release of the pro-democracy party leader Aung San Suu Kyi after nearly 20 years of house arrest, free elections and the easing ofinternational sanctions on the country have seen the nation take a U-turn.As well as greater freedom and the hope of improving the lives of the people, companies around the world areseeing real potential for the country to become the next major emerging market. Companies such as Coca Colaand ad agency WPP are already starting to build a presence, and executives are flying out on a regular basis toscope out the landscape.One of the big areas opening up is IT. IDC recently released a report into the countrys IT sector, calling itsgreenfield market an ‘Unpolished Gem’. "Myanmar is virtually one of the last untapped ICT markets in the Asia/Pacific region with fast rising potential. For IT spend alone, IDC is expecting 15% year-on-year growth in 2012,and the market is expected to reach US$268.45 million by 2016." That represents a massive annual growth rate of14% over five years. IDC predicts Yangon and Mandalay will be the two leading IT hubs for foreign market-entryand IT consumption, with telecoms, government, utility and energy, financial services, hospitality, and mediasectors all major areas for growth.The government has taken steps towards the future, with both a long-term plan looking to 2030 set up in 2005 anda more near-term one that addresses the plans for the next few years. These kind of goals help focus initiatives andfunds, and with so much change on the table coming all at once, focus will definitely be needed. The telecoms areamay be the first to take the leap, with Myanmars Post & Telecommunications Department Director General, KhinMaung Thet, saying a new communications law is being studied to create four new telecommunications licensesin the country that are open to both local and foreign investors. Previously, foreign investors were barred fromholding a license. 11
  12. 12. Despite the buzz and talk of potential, Myanmar has been an information blackspot for IT, and the informationthat is available is usually either outdated or comprised of sketchy estimates. Worldbank data shows there werearound 100,000 internet users as of 2009, a number which had stayed level for the previous few years, whilebroadband is virtually non-existent. Mobile subscriptions stand at around 550,000, which equates to a penetrationfigure of around 1%. Socialbaker, a site providing regular Facebook figures, doesnt have any Myanmar figures,although as things open up this is bound to change. According to StatCounter, mobile access to the internet hasrisen sharply from practically nothing at the start of the year to just under 9%, with Android being the mostpopular user choice. For desktops, Windows is king, and web browser choice is split 50/50 between IE and Firefox.Piracy levels in the area remain murky, neighbours such as Vietnam have software piracy levels around 80%,meaning some companies, such as Microsoft, are nervy about entering the market. Introducing an IP system,trademark registry and corresponding intellectual property law may help to alleviate fears, but that in itself couldbring more problems.The government wants to triple the size of the economy in the next five years, and to facilitate that has been passingdozens of new bills. Things are moving so quickly that according to Reuters, the country ‘risks overloading itsrickety institutions.These rapid changes could lead to a host of problems. The fast rate at which new bills are being passed could leadto poorly thought and inadequate legislation, which would only put off investors and cause trouble for people andcompanies on the ground. The government recognizes their lack of knowledge and expertise in many areas andhave been recruiting help from neighbours such as Singapore and Japan, but other dangers remain. The countryhas a serious unemployment problem, and expanding too quickly into areas that require specialist skills willcreate a major skills shortage. Already vast amounts of people are unemployable for skilled work, many in generalare unfamiliar with modern technology such as smartphones and desktop computers. Sustainable growth andeducation are essential to prevent future problems.By 2015 the government is hoping for 50% of the country to have wireless access. But with around 80% of thecountrys 60 million people living in rural areas, many of them in poverty, there are several issues that first need tobe addressed; fixing the chronic lack of decent infrastructure, including the rolling power cuts; further relaxing ofinternet censorship; and dealing with a general lack of familiarity with technology; and these are things that wonthappen overnight. To fulfill its potential, Myanmar has to move at the right pace and think things through, notcharge ahead blindly. 12
  13. 13. Expert Opinion John Naing, Citrix Systems, Systems AdministratorI grew up in Burma, and left around 17 years ago. I have lived and worked in the States since. My wholefamily are still back home, and I will soon be joining them.The current situation in the country is very promising, and so I want to go and give it a try. My two elderbrothers work in real-estate and selling motor vehicles, and are both doing very well. They say things arelooking bright and asked me if I wanted to come back and work with them and have a go, so I agreed.My field of work is IT. Currently I work as a Citrix systems admin; I do a lot work with applicationdeployment and managing servers, as well as enterprise data centres. If my brothers want to do somethingin IT, I will go down that road, if I want to do something myself, they have said they will help me out. Ifwe find a partner from overseas that wanted to come in and do something in IT, we’d be open to engagingwith them. Under current laws outside investors need a local partner - they can’t come in by themselves.A lot of companies from Asia are coming into Burma and testing the water, but so far there is very littleindication of major US or UK corporations making the move. So far only a handful of companies, suchas Coca-Cola have started up, just to test. I think all of them are waiting for the new bill to come from thegovernment. The new investment law, amongst other things, which will remove the requirement for a localinvestor, should be out by the end of August, but there are no confirmed details yet.For IT in the country, there is actually nothing really solid, almost no companies that are doing IT as amain business. Although there are a few modern pop shops. I think it’s very open for any companies whostart doing business in Burma. 13
  14. 14. QATAR - A RECIPE FOR SUCCESS [Source: Internet World Stats, The Peninsular] 66.5% 59% 88% 100% Internet of of online penetration population population 560,000 users Internet users Users on social Mobile penetration networksLast year saw Qatar’s ICT market post a growth figure of 21%. Its mature market is looking ahead to the cloud,fiber-optics and replacing their old smartphones. The 2012 Global Information Technology Report saw Qatarovertake the UAE as the second most IT-savvy country in the Gulf, one place behind Bahrain. The report explainshow the country “has managed to create one of the best environments for entrepreneurship and innovationworldwide.” The report wasn’t all complimentary however. “On a less positive note, the low levels of competitionexisting in the ICT and telecommunications sectors are affecting the overall affordability of accessing ICT,especially in terms of broadband, hindering a wider diffusion and usage of ICT across the different agents in thecountry, such as broadband internet subscriptions.”In order to remedy these problems, Qatar’s state-backed Qatar National Broadband Network Company (Q.NBN)has announced its plans to invest around half a billion dollars upgrading its broadband network, introducingfiber-optics and boosting capacity for new telecom operators. CEO Mohamed Ali Al-Mannai said, “We see thereis the potential opportunity for more competitors to come into the market, but in which form this is not clear yet,whether it would be a full telco operator or a small service provider.” With an eye on the 2022 World Cup, thecompany aims to up high speed fiber optic penetration to 95% from the current 5%, reaching 30,000 homes by theend of 2012 and 300,000 by 2015.BMI’s expectations of the country are also rosy. “With its booming economy and ambitious ICT investmentprogram, Qatar is expected to be the fastest-growing IT market in the Gulf region over BMI’s five year forecastperiod.” IT spending is expected to reach $533mn this year, up 15%, and they expect the World Cup “to fuel a newwave of investment, while the government’s ICT-2015 strategy will also create opportunities.” One of the biggestearners from all this has been Samsung; the electronics giant bagged $17.5m worth in sales last year, and has beenaveraging growth of around 40% for the last few years.One of the most popular products Qataris are buying is smartphones. Penetration has reached 75%, with the 15-34 year olds buying the majority of the devices. A report by Nielsen shows apps are largely absent, with around65% of all smartphone users having no apps on their phones at all. The report also noted that of the 25% thatdidn’t own a smartphone, almost half cited price as the biggest barrier. Clearly cheaper devices and a way to drawowners into using apps are high on the list of requirements. 14
  15. 15. In this year’s Global Innovation Index Qatar is the highest rated in the MENA region, coming 33rd worldwide.The index ranks 141 countries/economies based on their innovation capabilities and results, and includes some 15economies from the Middle East and Northern Africa. Though Qatar’s nearest rival is UAE at 37th, the countryhas fallen seven spots on last year. It seems jobs in the country are on the increase too. According to the MonsterEmployment Index Middle East, online job opportunities in Qatar were up 34% year-on-year, with tech jobsamong the most popular listings.As with any country, there are problems. The government acknowledges there are connectivity issues, skillsshortages and certain business environment challenges, but these are fairly small/trivial compared to other, lessdeveloped MENA countries. But overall, whether telecoms, software, electronics or innovation - Qatar is on theup. Growth across the industry is sky high and with the World Cup coming, investment will keep flooding in tothe country. Couple this with the government’s dedication to ICT and their 2015 plan and you’ve got a recipe forsuccess. Expert Opinion Krishna Gopal, Business Advisor, Middle East & Africa Qatar has a strong determination to get ahead of the pack, backed by enormous gas reserves that are able to fund this ambition. The unspoken competitor it wants to beat is the United Arab Emirates - mainly Dubai. In practice, this means if Dubai has various American universities set up campuses, Doha isn’t far behind, or if Dubai has its metro then Qatar will have a cross country railway.  But what gets in the way of Qatar’s growth is its very conservative outlook and governance. I remember overhearing Anand Mahindra, the Vice Chairman of Mahindra & Mahindra, at a dinner event a few years ago saying that for any business person or executive to come to a country and do business, the night life is one of the key considerations that no one will articulate, but is a strong factor. Qatar falls short here: alcohol is still taboo and restricted, and likewise women visitors may face some limitations, although not as many as Saudi Arabia.  It is not a breeze to walk in and set up your company in Qatar (like it is in Dubai), or at least not yet. You need to have a local partner who has to own over 50% stake in the company that you set up. This means that not only do you need to budget for either an annual partner fee or a share in the profits, but it also holds the lurking fear of the partner turning rogue at a future date. Overall, I would place Qatar in the center on a GCC scale of ease of doing business, where Saudi is at one end and UAE (Dubai) is at the other.  On the positive side, there is a lot of money in the system and I see opportunities in e-governance, e-commerce, mobile apps, payments and gaming. With the 2020 FIFA underway, I am hoping that the government may find a way to work around the “night life” angle as well as on the “ease of doing business” front. I hope this happens sooner rather than later so that investors and businessmen can really see the opportunity in Qatar. 15
  16. 16. CONCLUSIONIt is nearly impossible to truly predict which countries will be the most successful this year, or the next. But ourpoll aims to give an indicator of where IT professionals feel they would hedge their bets, given the choice. Manydifferent factors influenced their decision; political landscape, population boom, economic strength, but there didseem to be a clear message: our research seems to suggest that the BRICS are no longer the countries professionalsturn to - instead they are heading to the APAC region.ABOUT IDG CONNECTIDG Connect is the demand generation division of International Data Group (IDG), the world’s largest technologymedia company. Established in 2005, it utilises access to 38 million business decision makers’ details to unitetechnology marketers with relevant targets from any country in the world. Committed to engaging a disparateglobal IT audience with truly localised messaging, IDG Connect also publishes market specific thought leadershippapers on behalf of its clients, and produces research for B2B marketers worldwide. For more information visit: 16