Invest in Research and Development

by Mohammed Shariff | Apr 02, 2014

What is your take on the consolidated growth of  IT sector in the Kingdom?

The IT sector has phenomenal growth and it was blessings in disguise as other sector like oil & gas, petrochemicals and service industries dependent on IT and IT infrastructure for their process streamlining. The growth of telecom and smartphone have added feathers to the growth story of this sector. Like in many other countries, the Kingdom of Saudi Arabia had also given due importance to the technology and the IT sector had extraordinary business growth in last decade. This would further go up and looking at the projects in public and private sectors, the IT infrastructure requirements would further go up and existing IT companies have lot to offer.   If you look at the Saudi market, it has accepted all the advance technology to streamline the business process and it has imported most of the advance technology available in the world. In nutshell, the growth story is well scripted, where in we could have done much better, provided if we could invest in home grown technologies as many other countries did.

You said that Kingdom could have invested more in technology, can you elaborate on that?

I think looking at the future technology demand every country would plan to have their own technology, which can be provided to the local companies at lower price. However, right from the day one, both the hardware and software were imported. Companies had to pay huge amount for the licenses. The alternative technology was never considered as viable means of technology implementations.  At all level we failed to invest in research & development (R&D), little stress on that would have created different picture today. Today, market is flooded with many licensed products and I hardly see any local made technologies in the Kingdom. We have been using technologies since the discovery of oil, but never thought of making our own technology for the industries that we have. I don’t think still we are moving toward that direction. This would hamper the incurring cost of IT implementation for any company and high implementation cost would affect over all return on investment (ROI).

What is your experience in this sector?

I think right from day one I was passionate about technology, and my interest was hardware and I started this venture back in 1996, today with the grace and blessings of Allah, we are in good positions having contracts from STC, Awal net and many other companies. We are also planning to get in to software section.

Being an entrepreneur, what is your experience and suggestions to young entrepreneurs?

I think the market wide open to do your best, and if you put your all effort in the job success is at your door step. This is despite of hurdles and challenges in the process. I always think that we should have platform, such as club or forums where all the entrepreneurs can meet occasionally and share business thoughts. I think government agencies should take this forward and create a platform to bring the ideas on single platform, which would help the business to grow. Knowledge sharing is very important in this sector, without which it would be difficult to think of SME growth. SME's need better package of ideas and business modules. Such forums and clubs can give much better ideas than any consultancies, where they have pay for every idea.  The idea of SME cannot get materialized unless it is built based on proper basics and actual market determinations. We need understand the business dynamics, especially in IT sector, things are changing each day and any IT company that do not offer the most latest and efficient would be out of the market. The dynamism we see among the new entrepreneurs in initial stage should be maintained all through the business, one should never give up for small reasons. The hard work will pay off, no doubt about that.

What is your general  view on the Kingdom's economy?

An abundance of feedstock coupled with sustained investments by the private sector as well as foreign investors have made Saudi Arabia the industrial heavyweight of the Middle East. Saudi Arabia’s retail market is the largest in the Middle East and has very high potential for growth considering its large population base, high per capita income, and increasingly brand conscious youth.

The government’s proactive fiscal stance has helped the country to continue its march towards a more diversified economy and GDP growth. The government’s financial assistance to industry, along with technical, administrative, financial and marketing advice, for improvement of project performance and assisting them to overcome the problems they encounter, are major initiatives for the progress. Like other Gulf countries, the Kingdom is keen on diversifying its economy by means of enormous expansion programs. The Kingdom’s focus on economic diversification through the development of industry, agriculture, mining, and other non-oil sectors, so as to decrease the dependency on oil, is paying rich dividend. In addition, the encouragement given to the private sector to play a major role in the Kingdoms economic development under free market rules and Islamic frameworks deserves much appreciation.

The government has been proactive in warding off the ill-effects of global economic crisis. The 2009 budget was the largest in the country’s history and targeted development of non-oil sectors crucial to long term development such as healthcare and education, as well as the funding of massive infrastructure projects. 

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