How Dubai Is Putting In The Work To Become The Next Digital Economy Capital Of The World For Dubai and the United Arab Emirates, the country is not only a consistent regional leader, but a global leader in digital transformation and innovation- with even greater ambitions for the future.

Economists around the world often look to the US to allude to what's to come for the rest of the world. Just as America's most powerful companies decades ago were heavy industrials, so were the Global 500's powerhouses. 25 years ago, in 1997, the Global 500's top 10 companies were Japanese and American heavy industrial corporations in the energy, oil and gas, and automotive sectors, or were otherwise trading companies that shipped heavy industrial products and cars around the world. Fast forward 25 years to 2021, only half of the Global Top 10 are industrials; the other half of the world's largest companies are technology, healthcare, and consumer retail companies.

The idea is that the make-up of the US economy 25 years ago is quite similar to the make-up of the UAE's economy today, in that the UAE still relies heavily on industrial companies like local oil and gas giants, petrochemical giants, and trade and logistics players. If the UAE can take anything away from the US economy, it is that technology and digital innovation will be the name of the game going forward.

Looking at the top 10 companies in Fortune 500's 2021 list, despite there only being two technology companies represented -Amazon and Apple- their combined revenue made the technology sector the highest grossing sector in the top 10 with US$661 billion. In fact, not only was Amazon the only company to post double digit year-on-year profit growth out of the top 10 companies in 2021, but it posted an immense 84% growth in profit.

China's rise to prominence on the world stage can also be partly attributed to the success of China's rising tech industry, represented on Fortune's Global 500 list by the likes of Alibaba, Hon Hai Precision (FoxCon), JD.com, and Tencent. Another reality is that all major heavy industrial companies are also moving into the digital space. Many other non-tech companies on the Top 10 list today such as Walmart, CVS Health, and United Health Group all have strong digital offerings, providing e-commerce or digital products themselves. According to Insider Intelligence estimates, one dollar out of $4 spent on click-and-collect orders last year went to Walmart– more than any other retailer in the US.

On top of all of that, the companies that our parents were excited to work for are no longer resonating with the top young graduates of today; today's youth want to "move fast and break things," working in digital companies building digital products for the future. Yesterday's industrialists are being replaced and superseded by today's techies and digitalists. Thus, cities, economies, and countries are pushing forward ambitious and aggressive digital economy strategies to future-proof themselves.

Fortunately for Dubai and the United Arab Emirates, the country is not only a consistent regional leader, but a global leader in digital transformation and innovation- with even greater ambitions for the future. In 2021, the UAE broke into the Top 10 of the IMD Digital Competitiveness Ranking, outpacing the UK, Israel, Germany, and France. The IMD World Digital Competitiveness ranking analyzes and ranks countries' ability to adopt and explore digital technologies leading to transformation in government practices, business models, and society in general. The government of Dubai tracks country and city-level digital performance indicators across over 15 prominent indices measuring digital competitiveness, and the UAE has consistently ranked in the top quartile of every assessment.

The United Arab Emirates has also consistently been a "stand out" country in its digital evolution, since the Digital Evolution Index (DEI) began publication in 2015. The index analyzes over 90 economies across 170 indicators and four key drivers: supply conditions, demand conditions, institutional environment, and innovation and change. According to the researchers from Tufts University behind the Index, "to investors and businesses, momentum is indicative of market attractiveness and potential; to policymakers, it is a proxy for competitiveness. It illustrates the pace of progress."

For the UAE to be a "stand out" nation, it is considered to be part of the digital elite. Stand outs are both highly digitally evolved and advancing quickly. Singapore has always been a breakaway leader in terms of current digital state, while countries like China have the greatest momentum in how fast their digital ecosystems are evolving, despite China's current digital evolution state still being low enough to place them in the "Break Out" category. Highly digitized segments of the population do exist in China, but the lower score on current state is likely based on not achieving consistent adoption rates across the majority of the country's population. But when we evaluate from a digital economy contribution to national GDP standpoint, China's dominance is undeniable. Digital economy contribution to GDP is the highest in China, contributing approximately 40%, while the same contribution is 12% in the United States. The UAE's digital economy contribution stands at under 10% as of 2021, higher than of Canada's, which is 6%.

Dubai's performance in digital innovation and evolution is a positive sign for the Emirate, as with the right policies and implementation, Dubai and the UAE is set to become a global digital economy powerhouse. The foundation has already been laid with the government is setting an example with the UAE being the first country in the world to appoint a Minister of Artificial Intelligence (AI). Today, 90% of Dubai's government services are already digitized and available online. Dubai views AI as its biggest future asset towards becoming the happiest city on Earth with the belief that as touchpoints and services across the city become increasingly frictionless and seamless, citizen and customer happiness is inevitable. Next, Dubai is busy attracting some of the world's most prominent unicorn-status startups to set up shop in Dubai, along with blockchain, metaverse, and major Web3 players. The Dubai Chamber of Digital Economy even has a mandate to attract and help relocate 10 major advanced technology companies' headquarters to Dubai in the next 24 months.

If you want to learn more about what Dubai is doing to become the next digital economy capital of the world, read more on this topic by downloading our Special Report, Dubai's Roadmap to Becoming the Digital Economy Capital of the World.

Related: 10 Things to Know About Dubai's Digital Economy Ambitions