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The ICT industry is one of the major non-oil-and-gas-based industries in the UAE. In 2010, it contributed 3.2 percent of the gross domestic product (GDP). The UAE Government has invested in the development of ICT infrastructure with different free-trade zones and the ongoing installation of a fiber-optic network. In addition, the government's liberalized policy initiatives have induced market flexibility to attract multinationals. Investment opportunities are envisaged in the fixed-line, mobile-phone, hardware, software, and IT-services sectors.

Executive Summary

Political Analysis
•The United Arab Emirates (UAE) is a federation of seven emirates/monarchies headed by Sheikh Khalifa bin Zayed Al Nahyan. The Federal National Council, the nation’s legislative branch, is unicameral and comprises 40 members. The position of that of a political head in the UAE is hereditary, therefore successors are announced according to the traditional rule of governance.
•The UAE is favorably positioned relative to the other southern Gulf nations. It is expected to attract large investors to Dubai, leading to increased deposits in Dubai banks and, in turn, increasing the lending capacity of the nation.
•The UAE has not been much affected by the political turmoil in the Arab world. Factors such as declining growth, rising food prices, and youth unemployment, which have contributed to unrest elsewhere in the region, are less prevalent in the UAE. As the local population is content with their standard of living, the government has not prioritised political reforms. The UAE is likely to remain politically stable in the short to medium-term.

Economic Analysis
•The pace of economic growth is expected to gain momentum between 2011 and 2012. An increase in the government’s expenditure and a rise in oil production and prices between 2011 and 2013 are likely to promote economic growth.
•The government’s debt burden is under control. Real estate and the banking sector are predicted to grow between 2011 and 2015.
•The growth of the non-hydrocarbon sector and the capability of the economy to diversify between 2011 and 2015 are forecast to support the UAE economy. Hydrocarbon production and counter-cyclical fiscal spending are expected to drive real output growth between 2011 and 2012.

Social Analysis
•The UAE’s demographic trends are characterized by rapid urbanization and rising population growth. The UAE consists of the most varied population groups in the Middle East region. The population is majorly grouped into native Emiratis, Arabs, Iranians, Westerners, South Asians and East Asians.
•The UAE’s economy is expected to achieve its Millennium Development Goals (MDGs) by 2015. The primary education enrolment rate is 98.0 percent and the literacy rate among the population aged xx-xx years is xx.x percent. The government is focusing on national human resources and creating job opportunities in the private sector. The government has concentrated on building hospitals and townships as part of its humanitarian aid policy. It also focuses on building organizations such as the Abu Dhabi Fund for Development (ADFD), Red Crescent Authority (RCA), and the Humanitarian Foundation (HF), which provide billions of dollars to support disasters and drought-stricken areas across the globe.
Technical Analysis
•The science and technology undertakings in the UAE are governed by the state. Most of the expenditure is undertaken by the government. There has been an increased private participation, with foreign direct investment (FDI) inflow into research and development (R&D). There is increasing research on new sources such as solar, wind, and geo-thermal energies. The Masdar Institute of Science and Technology (MIST) is expected to advance entrepreneurship and help technology-led companies to grow through the use of shared resources, management expertise, and intellectual capital. R&D investments in areas such as drugs, defense, fuels, biotechnology, information technology, automotive, telecommunications, and health care are anticipated to strengthen the UAE’s technology base.
Legal Analysis
•The UAE has a liberal law system compared to other Middle East (ME) nations. It follows civil law jurisdiction, but Islamic law is applied to family and inheritance issues and certain criminal acts. The Sharia law is applicable to all individuals or groups involved in business activities. A federal court system applies to all Emirates except Dubai and Ras al-Khaimah. Sheikh Zayed bin Sultan Al Nahyan led the era of liberalization and development in the UAE.
Environmental Analysis
•The UAE’s key environmental issues are rapid urbanization, rising pollution, loss of wildlife habitat, carbon-dioxide emissions, and global warming.
•Demand for ground water for farming and green belt plantations have led to an increased rate of extraction.
•The government is focused on preserving and maintaining plant cover and the biodiversity of the region. It is incorporating strategies to reduce greenhouse gas (GHG) emissions. The UAE has begun to construct a major solar power plant, it is expected to help them to achieve the target of x.x percent renewable energy by 2020. It is likely to invest $xxx.x million for renewable energy projects between 2011 and 2015. The government is likely to focus on maintaining water resources and air quality, health and safety, biodiversity, and mitigation of and adaptation to the climate change.
Information and Communications Technology (ICT)
•The ICT industry in the United Arab Emirates (UAE) is gaining momentum as one of the key high-growth, non-hydrocarbon industries and it contributes around x.x percent to the gross domestic product (GDP). The government has initiated multiple projects and also injected funds to stimulate growth in the industry.
•The government’s focus areas are e-governance and infrastructure developments. It has set up ICT clusters such as Dubai Internet City and Dubai Silicon Oasis to promote the use and development of ICT.
•Companies such as Cat Logistics and HCL are investing in the development of ICT, research and development (R&D), green ICT, and fiber-optic networks.
•Spending on the ICT industry is increasing steadily, with a focus on the education related ICT.
Telecommunication (Telecom)
•Etisalat had monopolized the UAE telecom market 2007. However, after 2007, Du also began operations there.
•In 2004, the government of UAE created the Telecommunications Regulatory Authority (TRA), to develop, regulate, and monitor the telecom industry in the UAE.
•The market is segmented into fixed-line phones, pay phones, and mobile phones. While there is moderate to low growth for fixed lines and pay phones respectively, the mobile market is growing. With a penetration rate of around xxx.x percent, WiMAX technology, broadband, and other technologies are a mainstay in the UAE mobile segment.
Information Technology (IT)
•Hardware component manufacture is minimal in the UAE, but software is developed on a large scale, especially in the free zones.
•The major sub-sectors of IT services include systems integration services, software support and installation, hardware support and installation, and outsourcing. The government as well as the finance, construction, agriculture, and mining sectors use IT services in the country. The prominent and growing IT areas include mobile, video, and data services. Demand for uninterruptible power supplies (UPS) with higher capacities is also increasing.
•The UAE has a large IT outsourcing market, approximately xx.x percent of which is based in Dubai. This market is likely to grow in Abu Dhabi and Sharjah, as well.

Table Of Contents

Economic 360 for UAE: Growth Prospects and Emerging Opportunities in the ICT Industry

Executive Summary
Political Analysis

Economic Analysis

Social Analysis

Technology Analysis
Legal Analysis
Environmental Analysis
Information and Communication Technology (ICT) Industry
Telecommunication Market
Information Technology Market
About Frost and Sullivan

List of Figures
Economic 360 Perspective: Current Officials (UAE), 2011 15
Economic 360 Perspective: Key Diversification Strategies (UAE), 2011-2015 17
Economic 360 Perspective: The UAE's Key International Relations (U.S.A, EU, China and India), 2011 21
Economic 360 Perspective: Major Infrastructure Projects (UAE), 2011-2020 35
Economic 360 Perspective: Monetary Policy Targets (UAE), 2009-2011 37
Economic 360 Perspective: Trade Indicators (UAE), 2009-2011 38
Economic 360 Perspective: Free Trade Agreements (UAE), 2011 38
Economic 360 Perspective: Key Population Indicators (UAE), 2005, 2010, and 2020 41
Economic 360 Perspective: Key Education Indicators (UAE), 2011 44
Economic 360 Perspective: Major Tax Rates (UAE), 2011 52
Economic 360 Perspective: Key Laws (UAE), 2011 53
Economic 360 Perspective: Environmental Indicators (UAE), 2011 55
Economic 360 Perspective: International Environmental Agreements (UAE), 2011 56
ICT Industry: Key Indicators (UAE), 2011 60
ICT Industry: IP Treaty Membership (UAE), 1974-2005 65
Information Technology Market: Outsourced Services (UAE), 2011 79
Information Technology Market: Upcoming Sectors for Spending (UAE), 2011 83
ICT Industry: Business Opportunities (UAE), 2011-2014 84

List of Charts
Economic 360 Perspective: Key Features of Political Structure (UAE), 2011 14
Economic 360 Perspective: Current Political Structure (UAE), 2011 15
Economic 360 Perspective: Fundamental Objectives of the Government (UAE), 2011-2013 16
Economic 360 Perspective: Key Political Trends (UAE), 2011 19
Economic 360 Perspective: Key Foreign Relations (UAE), 2011 20
Economic 360 Perspective: Major International Organizations (UAE), 2011 22
Economic 360 Perspective: Demand Side Composition of GDP (UAE), 2011 25
Economic 360 Perspective: Supply Side Composition of GDP (UAE), 2011 25
Economic 360 Perspective: Inflation and Current Account Balance (UAE), 2005-2015 26
Economic 360 Perspective: Inflation and GDP Growth (UAE), 2005-2015 26
Economic 360 Perspective: Factors of Economic Growth (UAE), 2011 27
Economic 360 Perspective: Hydrocarbon and Non-hydrocarbon GDP Growth (UAE), 2005-2011 28
Economic 360 Perspective: Oil and Non-oil Revenue (UAE), 2005-2011 28
Economic 360 Perspective: Diversification Timeline (UAE), 1970-2020 29
Economic 360 Perspective: Major Non-hydrocarbon Sectors (UAE), 2011 29
Economic 360 Perspective: Consumption Expenditure (UAE), 2005-2011 30
Economic 360 Perspective: Gross Domestic Capital Formation (UAE), 2005-2011 31
Economic 360 Perspective: Value of Exports and Imports (UAE), 2005-2015 32
Economic 360 Perspective: Composition of Goods Exported (UAE), 2011 32
Economic 360 Perspective: Composition of Goods Imported (UAE), 2011 32
Economic 360 Perspective: Foreign Direct Investment Inflow (UAE), 2005-2011 33
Economic 360 Perspective: Fiscal Policy (UAE), 2011 36
Economic 360 Perspective: Economic Growth Outlook (UAE), 2005-2015 39
Economic 360 Perspective: Population Composition by Emirates (UAE), 2011 41
Economic 360 Perspective: Percent Distribution of Working Versus Retirement Population (UAE), 2005, 2010 and 2020 42
Economic 360 Perspective: Percent Distribution of Employed by Main Economic Activity (UAE), 2011 42
Economic 360 Perspective: Unemployment Rate Across Different Age Groups (UAE), 2011 43
Economic 360 Perspective: Ratio of Female Per Male in Private and Public Schools (UAE), 2011 44
Economic 360 Perspective: Health Indicators (UAE), 2011 45
Economic 360 Perspective: Major Science and Technology Organizations (UAE), 2011 48
Economic 360 Perspective: Major Environmental Issues (UAE), 2011 55
Economic 360 Perspective: Major Environmental Agencies (UAE), 2011 57
ICT Industry: Structure (UAE), 2011 60
ICT Industry: ICT Clusters (UAE), 2011 63
ICT Industry: Total ICT Spending and Spending as a Percent of GDP (UAE), 2005-2015 69
Telecommunication Market: Total Number of Fixed Main Lines (UAE), 2005-2015 72
Telecommunication Market: Total Number of Pay Phones (UAE), 2005-2015 72
Telecommunication Market: Mobile Subscribers (UAE), 2005-2015 73
Telecommunication Market: Mobile Connections Used in the Corporate Sector (UAE), 2010 73
Telecommunication Market: Mobile Penetration Rate (UAE), 2005-2015 74
Information Technology Market: Outsourcing Market Size (UAE), 2009-2014 79
Information Technology Market: Installed Personal Computers (UAE), 2005-2014 80
Information Technology Market: Monthly Internet Subscriptions (UAE), 2009-2011 81
Information Technology Market: Spending (UAE), 2005-2015 82
Information Technology Market: Segment-wise Spending (UAE), 2011 83

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