Intaj CEO Nidal Bitar

The State of the Sector

Even though times are tough for Jordan’s tech sector, Intaj CEO Nidal Bitar says the future remains bright for his members.

Intaj, the association that represents Jordan’s tech sector, has organized this year’s MENA ICT forum. The high profile event was held at a particularly challenging time for the domestic industry, weighed down as it is by continuing regional instability, flat demand from its main export markets, and shrinking levels of foreign direct investment.

Despite this, the CEO of Intaj, Nidal Bitar, remains upbeat about the prospects for the sector going forward, believing it’s well placed to meet ambitious targets set out for it as part of the REACH initiative that aims to turn the Kingdom into a major tech hub.

How is your industry faring at the moment?

To be honest, there has been a decline over the past few years. This has to do with two factors. Externally, the region is boiling. We thankfully haven’t been affected by this and it actually represents a great opportunity for us in terms of being ready to rebuild other nations. This is one of the things, which could attract investors. The second factor is that there have been some inconsistencies in regulations and laws that impacted investors, whether local or international. Now we’re optimistic this has been resolved. In terms of employment, we’re growing, but not at the rate we would like. Direct employment now stands at around 16,300, up around 1,000 between 2013 and 2014. In terms of exports, there has been a drop over this period. Internet penetration is now at around 88 percent, which is a very positive sign.

How do you rate the importance of the MENA ICT Forum to Jordan’s tech sector?

This is the seventh MENA ICT Forum since it started in 2002. The ICT sector in Jordan has been around for decades, but its real launch in my opinion was in 2000 when Intaj was founded as part of the royal REACH initiative to position Jordan as an ICT hub in the region. Since then, the sector’s contribution to GDP has risen from less than 3 percent to around 12 percent. Exports of ICT products were in the few millions at the start. Now they’re around $200 million. In order to position Jordan as an ICT hub in the region, the forum is very important. It attracts a lot of participants and speakers from all over the world. They share their experiences and expertise. People learn from each other. They network. They do business together.

What can we expect from this year’s edition?

This year is going to be totally different than before. We’re in a phase of transferring to a digital economy. Before, we had lots of people from the ICT sector mingling together. Now we’ll see a lot of professionals and high level executives coming from different industries, because they view it as a business forum, more than just a tech forum. This year we’re talking about how new global technologies, such as cloud computing, big data, 3D printing, and the Internet of Things are impacting sectors like education, health, and transportation.

Where is Jordan’s tech sector showing most promise?

We have a lot of success stories in Jordan in terms of companies that are exporting to all over the world. For example, 32 percent of our exports go to Saudi Arabia, while 19 percent goes to the United States. Intaj has been doing a lot of things to improve or increase the exports through exports development activities and participating in exhibitions. We also launched an IP portal – www.ipreach.jo – to be the gateway and the marketplace for everyone around the world to see what Jordanians have to offer. Our industry has a great reputation. We’re exporting education solutions, games, and health solutions. In gaming, we have companies like Tamatem and Maysalward. In education we have ITG. Their education system has even been implemented in some US states. In Saudi Arabia, it’s fully implemented. STS has implemented the e-government system of Bahrain. MenaITech has around 2,000 clients around the region.

What challenges do these companies face?

We have two main challenges. One is to ensure that universities are producing graduates that match the skills demands of the market. We need to focus on new trends, such as big data and cloud computing. In terms of languages, we’re talking about C-sharp and Java. The other challenge is the brain drain. We have great talent, but they have been attracted to work outside. Most of the success stories outside have a Jordanian involved in them. We’re proud of this. Most have their kitchen in Jordan. The revenue generated by them comes back to Jordan.

Has Jordan been overtaken by Dubai as the go-to place set up a tech business?

No, the cake is big enough for everyone. We complement each other. I don’t look at it as competition between Dubai and Jordan, or with Egypt and Lebanon. Everyone has a different model, and we complement each other. Dubai has always been attractive to investors. Perhaps they have been better at promoting themselves. But if you look at the cost of setting up a company, Dubai is more expensive than here.

What do you need from the government?

We recently got some great incentive from the government when they decreased the sales tax to zero and income tax from 20 percent to 5 percent. The interest rate for bank loans was also reduced from around 14 percent to around 5 percent. But we still need the government to look at issues like venture capital regulations, exit strategies, and the laws on bankruptcy.

What are your targets for the future?

As part of the REACH initiative, we’re aiming to increase employment to 250,000 by 2025. This can’t happen without the collaboration of all stakeholders, not just the ICT sector and the government. I think it’s a very ambitious goal. But if there’s a will, there’s a way. I’m very optimistic.