Cloud Computing to Add to Oman’s GDP

The rising adoption of cloud computing technology by the public and private organizations in Oman is expected to contribute around US$13.7 billion to the sultanate’s gross domestic product (GDP) over the next 10 years, according to a new study conducted by Amazon Web Services (AWS). AWS, an Amazon.com company, commissioned a new report quantifying the relationship between public cloud computing adoption, national productivity, and economic growth in the Middle East and North Africa (MENA) region. The report highlights the potential for the MENA region to unlock US$733.1 billion of additional economic value over the next decade (2023-2033), representing 1.14 % of MENA’s cumulative GDP, by accelerating adoption of cloud. The AWS study provides a cutting-edge econometrical method for calculating the aggregate productivity gains realized by economies that adopt cloud computing.

Cloud computing represents the delivery of IT resources via the internet with pay-as-you-go pricing. Instead of buying, owning, and maintaining their own data centers and servers, private firms and public sector organizations can acquire technology such as computer power, storage, databases, and other resources on an as-needed basis. In 2021, cloud adoption made a significant impact on the MENA region’s economy. According to the AWS report, it contributed 0.97 % to the regional GDP, generating an economic value of US$34.8 billion. Over 86 % of this impact can be attributed to the national productivity gains or so-called ‘spillover effects’ on the economy. The remaining 14 % is driven by cloud spending from both public and private organizations in the MENA region.

On average, MENA countries experience a 0.07 % increase in GDP for every one % increase in cloud penetration. Extrapolating this data, a 10 % increase in cloud penetration across the entire MENA region, would result in economic spillover effects amounting to an estimated US$25.5 billion per year. Yasser Hassan, managing director, commercial sector, MENA and Turkey at AWS, said, “The findings of this report highlight the tremendous opportunity for the MENA region to leverage cloud computing and accelerate economic growth. With significant untapped potential, the region can unlock additional economic value by increasing the current average cloud penetration.”

The study demonstrates that the economic impact of cloud computing is guided by returns to scale – greater adoption of cloud computing will lead to proportionally greater productivity gains and economic impact. In 2021, 26.5 % of organizations in the MENA region embraced cloud computing, significantly lower than the adoption rates of 49 % in Western Europe and North America. This presents an opportunity for the MENA region to enhance its cloud penetration and reap substantial benefits.

“With the current forecast, the economic impact of the cloud is undeniable and is poised as a key catalyst for economic prosperity. As such, it is important for businesses in the region to invest in cloud computing technology to stay competitive and boost their economic potential,” added Yasser. The report identifies four key advantages of cloud computing: First, it enhances business efficiency and effectiveness, streamlining processes and improving outcomes; second, it offers access to a wide range of services, enabling businesses to leverage advanced technologies; third, it boosts productivity by facilitating collaboration, mobility, and agility within the workforce; fourth, cloud computing promotes environmental sustainability by reducing carbon emissions per unit of data transmitted.