Cloud adoption ‘could unlock $733.1 billion’

An accelerated adoption of cloud computing could unlock $733.1 billion of additional economic value for the Mena region over the next decade (2023-2033), according to a new report.

Commissioned by Amazon Web Services (AWS), the report quantifies the relationship between public cloud computing adoption, national productivity and economic growth.

The study, performed by Telecom Advisory Services, and led by Raul Katz, director of business strategy research at the Columbia Institute for Tele-information (Columbia Business School), provides a cutting-edge econometrical method for calculating the aggregate productivity gains realised by economies that adopt cloud computing.

It extends previous economic research focused on firm-level productivity by establishing cloud adoption as a driver of national productivity and economic growth.

In 2021, cloud adoption made a significant impact on the Mena region’s economy.

According to the report, it contributed 0.97pc to the regional GDP, generating an economic value of $34.8bn.

Over 86pc of this impact can be attributed to the national productivity gains or so-called ‘spillover effects’ on the economy.

The remaining 14pc is driven by cloud spending from both public and private organisations in the Mena region.

On average, countries in the region experience a 0.07pc increase in GDP for every 1pc increase in cloud penetration.

Extrapolating this data, a 10pc increase in cloud penetration across the entire Mena region, would result in economic spillover effects amounting to an estimated $25.5bn per year.

Yasser Hassan, Middle East, North Africa and Turkey managing director for the commercial sector at AWS, said: “The findings of this report highlight the tremendous opportunity for Mena 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. We believe that the cloud will play a vital role in driving innovation, enhancing productivity, and transforming and scaling businesses in the region over the next decade.”

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, 26.5pc of organisations in the region embraced cloud computing, significantly lower than the adoption rates of 49pc in Western Europe and North America.

This presents an opportunity for Mena 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 Mr Hassan.

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.




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