The Digital Arab World Understanding and Embracing Regional Changes in the Fourth Industrial Revolution

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The Digital Arab World Understanding and Embracing Regional Changes in the Fourth Industrial Revolution White Paper The Digital Arab World Understanding and embracing regional changes in the Fourth Industrial Revolution January 2018 World Economic Forum® © 2018 – All rights reserved. This white paper has been published by the World Economic Forum as a contribution to a project, No part of this publication may be reproduced or insight area or interaction. The findings, interpretations and conclusions expressed herein are Transmitted in any form or by any means, including Photocopying and recording, or by any information Storage a result of a collaborative process facilitated and endorsed by the World Economic Forum, but and retrieval system. whose results do not necessarily represent the views of the World Economic Forum, nor the entirety of its Members, Partners or other stakeholders. REF 131217 Contents 6 Future of Platforms and Systems How to navigate the Fourth Industrial Revolution like an Arab souk 8 Future of Technology, Values and Policy Reaping benefits while minimizing risks 9 Future of Human Enhancement What is the future of human enhancement in the Arab world? 10 Future of Innovation and Entrepreneurship How Arab entrepreneurship can solve regional challenges 12 Future of Advanced Materials How non-metallics are creating transformative opportunities in the oil and gas industry 15 Future of Space Technologies How space technology will affect the Arab world 16 Future of Artificial Intelligence and Robotics Robotics and AI: Enabling an Arab Spring 17 Future of Neurotechnologies and Brain Science Impact of neurotechnologies and brain science on the future of the Arab world 18 Future of Civic Technology and Human Rights Securing the future of civic tech in the Arab world 18 Future of Cybersecurity Ensuring cybersecurity in a digital Arab world 20 Future of Behavioral Economics How behavioural insights are changing the stakeholder landscape in the Arab world 22 Future of Biotechnology Preventative medicine in the Middle East must be a collaborative effort 24 Future of Computing How is the future of computing likely to impact the Arab world? 26 Future of Transport The digital underpinning of the transportation revolution 27 Acknowledgements 28 Endnotes Understanding and embracing regional changes in the Fourth Industrial Revolution 3 4 The Digital Arab World Foreword Emerging technologies, such as robotics, artificial intelligence, nanotechnology and the Internet Things, will leave no geographic region, business sector, or society untouched. These technologies are transforming how we, as citizens and leaders, create, exchange and distribute value in society. As World Economic Forum Founder and Executive Chairman Klaus Schwab explains in his book The Fourth Industrial Revolution, we are already witnessing disruption in almost every industry and country. The increasing convergence and affordability of digital, biological and physical technologies will, therefore, affect how the Arab world produces, consumes, trades and moves, and it may challenge how we relate to one another and even what it means to be human. Mirek Dusek It is becoming increasingly vital for regional leaders to steer a steady course through potential Head of Regional reforms to maximize opportunities and promote citizen participation in innovation and technology Strategies - development. To shed light on this digital transformation, we invited several leading regional and Middle East and international thought leaders to think about collaborative solutions to further the digital agenda in the North Africa, Arab World and unlock regional opportunities presented by the Fourth Industrial Revolution. Member of the Executive This white paper is an initial step to identify a regional agenda for countries and leaders in the Arab Committee, World world for how governments, businesses and societies can work together to design and govern new Economic Forum technologies. The Regional Business Council has named this broad framework for action the Digital Arab World initiative. The council will continue to explore how the region can work together to benefit from the changes of the Fourth Industrial Revolution. We look forward to continuing the conversation with you. Sheikha Bodour Al Qasimi Chairperson, Sharjah Investment and Development Authority - Shurooq, United Arab Emirates; Chair, World Economic Forum Middle East and North Africa Regional Business Council Understanding and embracing regional changes in the Fourth Industrial Revolution 5 Future of Platforms and Systems How to navigate the Fourth Industrial reason to invest in them; the amount of venture capital Revolution like an Arab souk investments in the Arab region increased five-fold between 2013 and 2016.1 By Habib Haddad, President and Managing Director, E14 Fund, USA Eventually, angel funds were established, encouraging yet more people to create start-ups. With seed funding, some To navigate the Fourth Industrial Revolution, the Middle ventures started showing early signs of success, thus East should learn from its souks (local Arab markets). One needing to raise more money. This gave reason for funds of my favourite things to do in an Arab city is to take a stroll to raise more capital. The influx of a larger pool of capital through its old souk and embrace the sounds of haggling attracted even more talent, and those living in the diaspora merchants, the rich aroma of spices and the colourful started to return. Universities took notice and established stores displaying their wares. Some of these stores go back curriculums. several generations. It was only after this happened that governments decided The souk is a living organism made of interconnected actors to play a role. Successful regional top-down support came – the suppliers, the merchants and the shoppers – serving at the end of the chain; most of which came before did not just as a marketplace, but also as a place facilitating not really work. For example, the Central Bank in Lebanon social meet-ups. It emerges bottom up, evolving over time launched Circular 331 only in 2015, a few years after the by responding and adapting to the situation on the ground. bottom-up emergence of the local ecosystem. Much like There is no central designer of the system, but the actors traditional souks, clusters of start-ups, venture funds and themselves who set the tone. The souk, therefore, is a accelerators formed and continue to form in the region. perfect example of a decentralized, complex, adaptive and resilient system. In contrast, top-down attempts at setting up systems more often than not fail. Take the example of an Arab city Systems are all around us – school, neighbourhoods, that wanted to spur local innovation. A team was handed cities, companies, national economies. Yet designing good the mission to create the next 100 successful start-ups. systems is hard and sometimes we end up with a result So, they established a large incubator with all the latest completely opposite from the goals we started with. We tech gadgets. Their success was to be measured by how have much to learn from resilient systems like the souks that many start-ups they could host. With pressure to hit their maintain integrity of purpose, despite external challenges. target, they started accepting small traditional businesses instead. They also offered major incentives for budding I am lucky to have been part of the change that has led to entrepreneurs to start a company and base it in the city the creation of a thriving entrepreneurship environment in by offering free space and infrastructure. However, new the Arab world. In less than five years, a few fragmented founders need much more than space or even capital; they initiatives have transitioned to a flourishing ecosystem need great mentors, service providers such as lawyers and made up of start-ups with international scale, institutional bankers that really understand the start-up lifecycle, and a investors, support organizations and university programmes, good community around them to serve as a support group. which all interact together and mutually reinforce each other. Without any of this, the new founders tended to quit at the Prior to 2012, those various elements and organizations first major obstacle, which is common in the start-up world. existed, but were poorly interconnected, working in silo So they closed shop and the traditional businesses took with weak feedback loops. The system emerged bottom up over, turning the space into a subsidy scheme instead. The without a central organization, figure, or country managing city’s goal of spurring innovation went back to square one. it. The souks and the previous entrepreneurship system design In retrospect, here are the system interventions that worked intervention teach us some important lessons that the region and their sequence: First, a cultural shift happened, raising can learn from as it looks towards playing a leading role in the profile and importance of entrepreneurship which the Fourth Industrial Revolution: made everything else easier. As the cult of the “hooded entrepreneur” travelled from the Bay Area in California to – Top down does not work. This does not mean that the Arab world, it encouraged regional role models in the hierarchy is not important, but rather that it has to evolve same way. Eventually, media publications began focusing from the bottom up, with the upper layers serving the on entrepreneurship, and yearly prizes began to be awarded lower layers. celebrating entrepreneurs. This encouraged more people to take the entrepreneurial leap, creating in their wake a – Stay true to the purpose. While many initiatives start demand for support organizations such as mentorship by having an altruistic purpose, some end up with an programmes. As those were established, they strengthened inverse result; it is important to avoid this trap and be the skills of entrepreneurs, giving their mentors a good ready to kill the initiatives that do not work. 6 The Digital Arab World – Identify levers. While there are no easy ways to control a system, there are ways to shape its direction towards an intended goal and make it more resilient to external events.
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