As global acceptance of blockchain accelerates, it is predicted that countries in the Middle East and Africa (MEA) will increase their spending on technology enormously in the coming years.
According to a new report from the US-based market research agency International Data Corporation (IDC), MEA governments will see a 400% increase in their investment in blockchain-based solutions in four years.
Issued on February 12, the IDC report outlines that blockchain technology is increasingly growing its share in digital transformation initiatives in the MEA region. In particular, MEA countries are predicted to increase their blockchain spending from $ 21 million in 2019 to a whopping $ 105 million by 2023, with a compounded annual growth rate of nearly 50%.
According to the report, the authorities in the MEA region are actively developing solutions that support blockchain to reduce fraud, increase security and improve public administration.
Jyoti Lalchandani, vice president and regional director of the IDC Division for the Middle East, Turkey and Africa, emphasized that governments in the MEA region face a whole range of new technologies, such as blockchain. Lalchandani also noted that many government structures are not prepared for digital transformation:
“Governments in the region are under increasing pressure to become both more efficient and more effective. However, this appears to be a difficult task because many government organizations are simply not prepared for digital redesign. Whether it is about ways to integrate 5G, AI and blockchain or to protect against intruders on digital trust, government institutions have a whole new set of IT skills to learn. “
Despite the fact that blockchain is increasingly being investigated in MEA countries, blockchain spending is still a small part of the total digital transformation initiatives. According to the IDC, MEA countries spent $ 12.8 billion on digital transformation as a whole in 2019 and are expected to exceed $ 15 billion by 2023.
The IDC has constantly updated blockchain spending forecasts as the sector evolves. The research firm had previously predicted that worldwide blockchain spending would be nearly $ 3 billion in 2019, with an increase of 89% from 2018. The IDC also predicted that this figure would reach nearly $ 16 billion in 2023.
Although the MEA region is expected to see a significant increase in blockchain spending, other regions such as Asia / Pacific except Japan (APEJ) are expected to spend much more than $ 105 million in the coming years. According to another IDC prediction, the APEJ will spend as much as $ 2.4 billion on blockchain by 2022.