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Insiders call for building on ICT sector successes

By Mohammad Ghazal - May 22,2015 - Last updated at May 22,2015

AMMAN — The ICT sector in Jordan has managed to achieve great strides over the past years in many terms, but is in need of more government attention to be able to overcome some of the obstacles facing it, according to industry insiders. 

The Kingdom is now a regional information technology leader despite its small size and limited resources, the experts noted, with Jordan providing a major percentage of online Arabic content, software, gaming, manpower and technology solutions, among others. 

Despite major success stories, insiders said, the sector is now in need of serious efforts to continue its achievements and increase its contribution to the national economy, which has been declining due to several challenges that include the regional situation and tough competition. 

Major gaps in graduates’ skills and labour market needs, and brain drain, coupled with some “unfavourable labour-related procedures” and more lucrative incentives to ICT firms from regional countries are all issues that need immediate attention from regulators and the authorities to restore the once-advanced status of the sector in the country, they said.

“Jordan has a vibrant ICT sector with many success stories including Yahoo’s acquisition of Amman-based Maktoob and the emergence of several start-ups that are presently known internationally,” said Jawad Abbassi, founder and general manager of the Arab Advisers Group, a research entity focused on communications, media, technology and financial markets throughout the Arab world. 

He called for more efforts to turn Jordan into a regional hub.

The sector, which employs more than 80,000 people, of whom 30 per cent are women, has witnessed a decline in terms of its contribution to the gross domestic product, which dropped from 14 per cent in 2009 to 12.9 per cent in 2010, 12.4 per cent in 2011, 12.2 per cent in 2012, 11.2 in 2013 and even went further down in 2014, according to industry insiders.

In spite of this decline, there is also good news in the IT sector, as exports have been increasing over the past years despite regional turmoil and several local and regional challenges. 

IT exports amounted to $223 million in 2009, $204 million in 2010, $237 million in 2011, $308 million in 2012 and $332 million in 2013.  

Jordan’s IT exports reach several markets across the world, with 26 per cent in 2013 going to Saudi Arabia, followed by the US (21 per cent), Iraq (12 per cent), Nigeria (7 per cent), the UAE (6 per cent), the British Virgin Islands (5 per cent), Palestine (4 per cent), Qatar (2 per cent), Morocco (2 per cent) and Lebanon (1.5 per cent), according to a survey conducted by the ICT Association of Jordan ([email protected]).

“The sector’s exports are growing, so why is there no focus on boosting its competitiveness?” Abbassi asked.

“Jordan had a vision to become an ICT hub before Dubai, but without proper implementation we just had the vision before and currently the country is not a hub…To be an ICT hub, there needs to be a stable, flexible, predictable and attractive business environment which is something that we have issues with,” Abbassi noted.

To tap the sector’s potential, experts called for removing obstacles facing ICT companies while stressing that the key to improving the sector lies in education.

“There is no limit when it comes to potential and opportunities in the ICT field in Jordan, but first we need to address issues facing the sector,” said Abed Shamlawi, former CEO of [email protected]

Shamlawi called for modernising legislation in a manner that would serve developments in the sector.

According to estimates by experts, there are more than 20,000 jobless ICT graduates in Jordan, while 75 per cent of the sector’s companies say they face major difficulties in finding graduates with the required skills as many seek jobs abroad.

“What makes the situation worse is that… talented employees leave for higher salaries in the Gulf and elsewhere and companies are left with new graduates who don’t have the needed skills,” Shamlawi said.

To help in the recruitment of ICT graduates and enhance their skills, the government started a project in 2009 in collaboration with the private sector under which they are offered training and employment opportunities. 

As part of the Graduate Internship Programme, the government subsidises 50 per cent of each beneficiary’s salary, while the rest is paid by the companies that train them.  

The ICT Ministry was not available for comment despite several attempts by The Jordan Times to reach them.

An ICT expert called on the government to extend exemptions offered to ICT companies to help them compete regionally and internationally.

At present, he said, net profits of companies’ export revenues are exempted from income tax, but this exemption concludes by the end of this year.

Mohamad Khawaja, CEO of Startappz, called for private- public sector cooperation to help remove obstacles facing the sector. 

“We have solid infrastructure, we have very innovative ideas and projects, start-ups and entrepreneurs. We have good seed funding but we have problems when it comes to venture capital funds for example,” he said, calling for private-public sector funds to support small- and medium-sized enterprises. 

“We have great ideas and great initiatives, but there is no follow up unfortunately.” 

The experts interviewed by The Jordan Times said a radical change is also needed in the education sector.

 

“We always take pride in our most precious capital — human resources… We need to invest more in it,” one of them noted.

 

ICT in figures:

Jordan’s exports reached 27 countries in 2013

There are more than 11 million active mobile users in Jordan

Internet penetration reached 74 per cent at the end of 2014

 

Number of companies working in field, including start-ups, is 540 at present

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