Recently, the term digital economy has been increasingly mentioned across media platforms and governmental channels. This term is linked to Oman's national vision, Oman Vision 2040, which aligns with His Majesty Sultan Haitham bin Tariq's vision.
The vision is distinguished by its grand national objectives and its purely national formulation, as it emerges from the ideas of Omanis, especially the youth who have had a hand in drafting this vision. This contribution aims to build a renewed renaissance based on pillars that keep pace with scientific and digital developments; this has made the digital economy one of the primary components of Oman Vision 2040 and its main goals.
The question remains regarding what we mean by the digital economy and how this type of economy relates to the traditional economy and particularly to the growth of the Gross Domestic Product (GDP) in Oman. The digital economy belongs to the global economy in its current concept, which cannot be separated from the reality of digital and technological progress.
This type of economy includes commercial operations that interact with life elements and characters via the Internet. This includes e-commerce, digital banking services, digital marketplaces, data-driven services, and digital currencies, which have seen increased growth and trade recently, especially since the Covid-19 pandemic. The digital economy also encompasses industries that rely heavily on digital technologies such as information and communication technologies, digital media and various social media platforms.
The digital economy is characterised by its rapid growth rate, its ability to transcend complex geographical and political boundaries, and its significant impact on traditional activities and industries that are not digitally native. It has the capability to radically change production, consumption, distribution, and logistical processes in general.
We can link some of these concepts and their relationship to economic growth and the GDP in Oman through the document of the National Program for Digital Economy —published by the Ministry of Transport, Communications, and Information Technology— which is one of the main pillars and programs of Oman Vision 2040.
This document includes data related to the contribution of the digital economy to the global economy, which accounted for 5 per cent to 15 per cent of the global GDP according to a 2019 statistic, with an estimated $11 trillion in the global digital economy expected to rise to $23 trillion by 2025. This increase would boost the global contribution of the digital economy to 24 per cent of the total global GDP. As for the local context, Oman recorded a 2 per cent contribution of its digital economy to the GDP in 2016.
The National Program for Digital Economy, according to the summary of the document referenced above, is based on several pillars. The first is the imposition of smart governance to become a reality that leads to the facilitation of procedures and services of all kinds through advanced digital systems.
The second pillar aims to achieve the existence of a digital society that strives to enhance digital capabilities in the community, promote digital innovation and support it. The third pillar is to expand the digitalisation of businesses by activating them with advanced digital tools such as artificial intelligence systems, the Internet of Things, cloud and quantum computing; to include digitisation in key sectors like tourism, health, education, and logistics.
The National Program for Digital Economy adopts the 50-5-5 strategy, which seeks to increase the contribution of the digital economy by 50 per cent every 5 years by increasing the information technology rate by 5 per cent. This strategy stems from the principle of keeping pace with the goals of Oman Vision 2040, which began its practical steps in 2021 and is expected to complete its journey in 2040. It is anticipated that through this journey, the contribution of the digital economy to the GDP will rise from 2 per cent to 10 per cent by 2040, reaching an information technology rate of about 30 per cent to 35 per cent. The programmes related to this national program are divided into three branches starting with the national program, which is long-term and is expected to be achieved by 2040.
From this main branch, another branch emerges in the form of medium-term programs to be achieved between 2021 and 2025, and from these programs, a third branch of supporting programs arises that operate within a short-term timeframe of one to two years.
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