Iraq faces a crossroads in its journey toward achieving its full economic potential. While the oil, gas, and construction sectors form the backbone of its traditional economy, global economies are rapidly shifting towards technology and innovation as the foundation for building sustainable and resilient economies. However, Iraq remains at the bottom of global rankings when it comes to the digital economy.

A quick glance at some indicators gives us a snapshot of the situation. For example, Iraq ranks 148th in the 2024 e-government development index out of 193 countries (while Saudi Arabia ranks 6th). (1)

The reasons are many, but in my view, one of the most important is the lack of experience and awareness of technology and the startup sector among the executive leadership in the government (ministers, general directors, and most of the middle administrative staff).

The majority of these leaders and influencers in the Iraqi government come from backgrounds focused on traditional specialties or have experience in general government departments, even in ministries related to technology. While the value of expertise in oil, gas, and construction sectors cannot be overlooked, their lack of experience in the technological and digital sectors hinders the development of policies that support innovation, entrepreneurship, and the attraction of major tech companies.

As a result of this lack of expertise, there is no clear understanding of the importance of technology companies among decision-makers, and the communication channels with these companies are inefficient. It is difficult to find individuals in the government who speak the language of the modern business world, leading to communication failures and a lack of interest from tech companies in entering Iraq. They instead settle for selling their services in Iraq and managing operations from neighboring countries that have the required expertise and offer the necessary environment and incentives.

The world has witnessed numerous examples of how economies have transformed through technology. Countries such as the UAE, Singapore, and Saudi Arabia have leveraged technology and innovation not only to diversify their economies but to become global hubs for entrepreneurship.

Saudi Arabia is a role model in the region. It has focused on attracting Saudi talent working in major international companies abroad, and has assigned them leadership positions within the country. Examples of this include:

• Engineer Abdullah Al-Swaha: Minister of Communications and Information Technology since 2017. Before his government position, he served as the CEO of Cisco in Saudi Arabia, which allowed him to bring private sector expertise to his government role. Through his previous relationships, he helped secure a partnership between the Saudi government and Cisco to accelerate the digital transformation plan. (1)
• Deema Al-Yahya: Former CEO of the National Digital Transformation Unit and the first Saudi woman to hold a leadership role at Microsoft Arabia. Her expertise directly contributed to digital innovation initiatives. (2)

This Saudi approach clearly demonstrates how national expertise gained globally can be harnessed to drive digital transformation within the country.

To bridge this gap, the government must take decisive steps to bring in individuals who understand the technology sector and its potential. Below are some suggestions:

1. Appoint leaders with technological expertise: Leadership positions in economic and industrial policy should be filled by individuals who have knowledge of the technology sector and experience with global technology companies. These leaders can bridge the gap between the government and the tech private sector to ensure policies align with global trends.

2. Establish partnerships with major consulting firms: The Iraqi government can benefit from collaborating with global consulting firms such as McKinsey & Company, Roland Berger, and the big four consulting firms (KPMG, Deloitte, E&Y, PWC), among others. These firms have deep expertise in developing technology strategies and supporting governments in crafting innovative policies that enhance the competitiveness of the tech sector. These firms have a strong presence in countries that are making leaps in digital transformation and technology adoption, such as the UAE, Saudi Arabia, Qatar, and Turkey, but unfortunately have little presence in Iraq.

   For example, the consulting market in the Gulf was worth $5.4 billion in 2023, growing by 13% from the previous year, with more than half of that amount being in Saudi Arabia, amounting to $3.2 billion. This reflects the confidence of Gulf administrations in consulting firms as partners in digital transformation. (3)

   Collaborating with these firms, on the condition that they hire and train Iraqi youth, would contribute to a qualitative leap in local skills and expertise, while also boosting the confidence of global companies in entering the Iraqi market, as many of them work with major consulting firms worldwide.

3. Create specialized technology committees: The government should establish committees specifically tasked with formulating policies and providing recommendations on how to facilitate the entry of global tech companies into Iraq, support tech startups, and foster innovation. The leaders of these committees should be chosen from individuals with experience in global technology companies, not from current ministry and department employees unless they have previous experience working with tech companies.

4. Engage with global technology leaders: Partnerships with major tech companies can provide Iraq with the expertise and resources necessary to accelerate its transition to a digital economy and transfer modern technological know-how to Iraqi youth, provided the government offers the required incentives and facilitation. Many countries offer substantial financial incentives to attract global companies to open regional centers in their countries. For example, in September, the Indian state of Karnataka passed a law granting incentives to global companies opening regional centers, including bearing 25% of capital costs, providing funding for infrastructure, and offering tax exemptions. (5)

5. Enhance communication with Iraqi talents abroad: There are many Iraqis working in leading international tech companies. The government can build programs to attract them back to Iraq and assign them leadership roles to support digital transformation.

6. Invest in education and training: The government must prioritize initiatives that equip young Iraqis with the skills needed to succeed in the tech sector. This will not only create a talented workforce for the local economy but will also attract global companies seeking skilled labor.

7. Foster an innovation culture within the government: The Iraqi government must adopt an innovation culture in its internal operations and encourage experimentation and the adoption of digital solutions to improve efficiency and enhance transparency.

By learning from the experiences of countries like Saudi Arabia, collaborating with global consulting firms, appointing leaders with tech expertise, updating regulations, and engaging with Iraqi talent abroad, Iraq can build a more diverse, resilient, and sustainable economy for future generations.

It is time for Iraq to embrace the future, and this begins by bringing technological expertise into the heart of government decision-making processes.