Qatar’s private sector remains relatively low-tech, despite government efforts to make businesses more innovative and entrepreneurial, a new report has found.

Many business leaders here said they see no need to establish an online presence in the form of a website or social media, or use software to help them manage payroll or employee work hours, according to the Qatar’s ICT Landscape 2016 report.

The survey, released by Qatar’s Ministry of Transport and Communications, found that only 34 percent of business establishments have their own website.

An additional 5 percent have some other form of web presence, such as a Facebook or LinkedIn page, it added.

Missing out

Even though more people in Qatar are getting online, the ministry said business web presence figures have remained virtually unchanged since 2012.

However, there are significant benefits to getting online, the report said:

“Online presence provides business establishments a virtual 24-hour information center and an online showroom. Potential customers can research the product or service anytime, anywhere.

Online presence also … (helps) businesses build a credible brand, provide quality and timely customer service, and receive customer feedback.”

Larger companies in Qatar are more likely to be online, the study found.

Some 55 percent of local companies that have more than 10 employees have some form of web presence, according to the ministry.

By that measurement, Qatar ranks favorably against some countries in the region. In Saudi Arabia, for example, 48 percent of similarly-sized firms have a web presence.

However, Qatar lags far behind the UAE, where the comparable figure is 75 percent.

Qatar needs ICT

Much of the ministry’s report focuses on the performance of Qatar’s ICT industry, which it broadly defines as including any company that designs, manufactures, installs, maintains or sells information and communications technology.

It’s an important topic for Qatar, which is counting on an emerging technology sector to help diversify its economy away from oil and gas.

According to the National Development Strategy, “key economic sectors (must) use ICT innovatively and provide the people and businesses of Qatar with the skills and awareness needed to fully participate in the digital society.”

By some measurements, Qatar is on the right path.

The ministry’s report states the the number of ICT professionals in Qatar is growing and reached 35,500 individuals in 2015, up from 26,900. That represents 3 percent of the people employed in the country’s “business establishments.”

To put that number in context, there were some 150,200 ICT professionals working in Singapore in 2014, representing roughly 4 percent of the southeast Asian country’s workforce, the report said.

Much of the sector’s growth is being driven by government spending, with more than four out of every five ICT companies saying they’ve worked on at least one public-sector project between 2012 and 2014.

Challenges

Despite strides made, the growth of Qatar’s ICT industry is stunted by low spending on R&D, which is hindering innovation, the report said.

Specifically, among ICT enterprises in Qatar, only 10 percent said that they invested in R&D activities in 2014.

And ICT business leaders told the government surveyors that they face several challenges in starting and growing their companies.

Some hurdles, such as the complexities of the country’s sponsorship system, are common across various business sectors.

“Finding a specialized employee with niche technical skills is not easy in Qatar. At the same time, it is difficult to source someone from outside the country due to the visa regulations,” a representative of a mid-sized multinational ICT enterprise in Qatar, was quoted as saying.

However, there are also issues unique to the ICT sector, such as difficulty importing equipment.

“Customs formalities are difficult to understand and follow. In addition, it also takes weeks to get clearance for the imported products in most cases. Because of these import issues, we always budget an extra 10 days to deliver the products to the customers,” another industry representative said.

Thoughts?