Lebanon is the Information and Communocation Technology (ICT) and digital technology hub of the MENA region, and digital transformation is applied to all sectors including government

Concentrate efforts, incentives and investments on building thriving and dynamic productive sectors, converting Lebanon’s rentier model to a productive one

A Prosperous Economy That Creates Jobs For All and Reduces Inequalities

1.Digital innovation is becoming central to all aspects of life and is the key for delivering fundamental reform. It is the basis for doing more with less: more effectively, efficiently, conveniently and transparently but with less money, bureaucracy, time, human contact and user’s frustration

2.Driven by user’s convenience, every competitive business has now become a digital business, and every forward-looking organization has transformed itself into a digital organization. The successful acquisition of new knowledge and skills among populations, information technology and digital economy can present new opportunities for all sectors of an economy

3.Over the past two decades, consecutive governments have repeatedly acknowledged the importance of technology as a vital ally to foster innovation in governance, reform public management and transform the delivery of public services. Digital information is critical to national security and state sovereignty

1.Knowledge sector’s % of GDP

2.Knowledge sector’s % employment

3.Knowledge sector’s % of total services exports

4.ICT Development Skills Index (IDI)

5.Network Readiness Index (NRI) – WEF

6.Global innovation index (WEF)

7.Global competitiveness index (WEF)

8.Number of public institutions that have implemented e-governance

9.Cost of procedure to complete a formality

10.Time of procedure to complete a formality

11.Ease of Doing Business Ranking

1.The ‘digital economy’ or the ‘knowledge economy’ are often presented as the solution/mechanism by which to structurally change Lebanon’s economy

2.As economies around the world increasingly become digital, Lebanon risks falling behind, with many detrimental long-term effects

3.According to the Global Competitiveness Index, Lebanon ranks 95 out of 141 countries regarding ICT Adoption

• The Index highlights Lebanon’s weak ICT infrastructure, through poor electricity supply quality as observable by chronic power cuts, low internet speeds (average of 7.94 Mbps compared to a global average of 74.32 Mbps), a relatively low fixed broadband subscription rate (0.1 per 100 people), and the lack of a fiber optic network infrastructure, except for few neighborhoods.
• In mid-2018, the fixed infrastructure operator in Lebanon launched its 40-month plan to give Lebanese households and offices access to ultra-fast internet connections through fiber-optic networks. Around 35% of the project had already been finished by the end of 2019. But since then, the depreciation of the local currency has slowed the completion of the project’s deployment

4.By the World Bank’s Digital Adoption Index, which examines the extent to which businesses and governments are adopting digital technologies to improve their operations and service-delivery, as well as citizens’ access to the internet, Lebanon ranks 76 / 180 countries

5.Lebanon ranked 23 / 141 countries regarding the ‘Digital skills among active population’ indicator, but 101 / 141 regarding the ‘Diversity of workforce’ indicator in the Global Competitiveness Index, with scores of 67.5 and 52.3 out of 100, respectively, on these indices

6.Lebanon is still in the phase of insuring the pre-requisites for the ICT infrastructure: slow broadband deployment, 4G deployment, absence of advanced services such as triple play, quality of service, etc.

7.Internet subscription prices, which are set by Government-owned Ogero, remain prohibitively expensive, and internet access is uneven across the country, with urban areas more connected than rural areas

8.ICT sector contributes to more than 3% of GDP, at ~$1.7Billion (2016) and comprises mostly small and medium businesses and has been gradually moving from retail & wholesale activities into innovation and content generation

9.ICT services’ exports estimated are estimated to make up 22.03% of total services exports (2016)

10.The digitalization of Micro, Small and Medium Enterprises (MSMEs) in Lebanon presents a great opportunity for the transition to a digital economy as they constitute between 93-95 % of all commercial enterprises in the country

11.Software companies employ ~5,000 individuals and operate across 3 major activities: Software products, web solutions and mobile services and applications

12.The ICT sector has access to multiple government incentives (low interest loans and IDAL tax incentives), yet these government incentives have failed to create jobs and boost the ICT sector of Lebanon

13.Despite the internet penetration rate of 78% in early 2020, the dividends of the technology sector remain centralized in Beirut and among a narrow segment of the population, namely those who have the knowledge to participate in the sector

14.The gap is rapidly widening between the expectations of the citizen, especially the digitally savvy young generation, and the ageing mechanisms underlying current provisions of most government services

1.Lebanon’s current digitization approach of making fragmented, incompatible and uncoordinated small-step changes is unsustainable; it is less favorable to the citizen, more expensive to the government and harmful to the national digital industry

2.E-government initiatives are fragmented. No incentive for co-operation. No specific budget to oversee the whole program

3.The lack of harmonization in approaches to digital transformation adopted by different departments leads to large scale system incompatibilities

4.The lack of sharing results in duplication of databases, software components, systems and processes

5.Most of the existing systems, particularly databases, are designed to operate in a closed environment, however operating in the open world requires a major shift, particularly with regards to security

6.Government monopoly on the telecom sector is stifling growth

7.Multiple infrastructural challenges stand in the way of transitioning to a digital economy, such as Lebanon’s weak ICT infrastructure, the poor electricity supply quality, low speed internet, etc.

8.The lack of e-government services and e-payment gateways, as well as a gap in logistics and delivery infrastructure (MSMEs in particular face issues related to cross-border delivery, due to bureaucratic delays and high cross border fees)

9.A ‘digital divide’ exists across society that creates a lack of knowledge and awareness on key digital skills needed for the digital economy among groups that are less educated or that come from rural backgrounds

10.Lebanon’s public education system has not been adequately equipping students with the digital skills needed to participate in the digital economy. While some departments within universities are making strides in this regard, the knowledge and digital skills needed to engage in the digital economy are not evenly distributed across society, and this is exacerbating the ‘digital divide’

11.Startups report difficulties in finding employees with certain technical skills, particularly in data and analytics, and product design; they claim that this is because the Lebanese education system does not provide young graduates/entry level employees with the proper digital knowledge and skills

1.First Lebanon’s e-Government strategy was published in 2002, and the second in November 2007

2.2010 - the Government of Lebanon subsidizes the interest rates on loans granted in Lebanese pounds for R&D purposes in productive sectors

3.2013 - BDL circular 331 allowed banks to invest 10% (total sum is USD 400 Millions) of their capital into start-ups in the field of knowledge and innovation.  Some of the creative industries such as software, computer games and architecture are included

4.2018 – Law 81 on Electronic Transactions and Personal Data the has passed but has not been enacted yet. The law was drafted in 2005 and passed in 2018, with little changes made to reflect the current times

• The law does not address ‘smart cities’, social media platforms, Artificial Intelligence, or metadata
• The law only recognizes paper-based transactions
• The law’s proposed system for protection of personal data is very weak and not in line with modern international standards
• It does not properly regulate business conduct when it comes to user data, nor does it provide internet users a choice when it comes to the collection of their data

5.2018: Lebanon Digital Transformation Strategy by OMSAR

6.August 2019: Cabinet adopted the National Lebanese Strategy for Cybersecurity

7.Action Plan of the Ministry of State for Investments & Technology (2019-2020)

8.Many national strategies on digital-related transformations have been released in recent years, such as the Digital Transformation Strategy 2018 and the action plan developed by the short-lived Ministry of State for Investments and Technology, that have simply not been formally adopted and implemented by the Council of Ministers

Policy Action

1.Develop a comprehensive national strategy to transition to a digital economy that engages all relevant ministries, relevant stakeholders (including representatives from non-governmental organizations (NGOs) and civil society organizations (CSOs), and the private sector), and which delineates legislative and regulatory frameworks to facilitate said transition

2.Ensure that the government passes clear open data policies, with accompanying implementation procedures, prompting all governmental entities to abide by the Access to Information Law and systematically release all data that they are legally tasked with making public

3.Increase R&D budget to 2% of GDP

4.Launch a research & innovation program focused on new technologies (AI, Blockchain, Robotics,..)

5.Develop a national AI strategy along and construct  a national data center

6.Apply digital transformation within the public sector (e-government), which would reduce the cost by 80% per procedure for citizens

7.Improve Lebanon’s digital infrastructure

8.Implement the digitization program (high-speed Internet and 5G) and provide Internet access to every home and institution

9.Launch an e-commerce development initiative:

• Support the private sector, especially MSMEs, in undergoing a digital transformation, so they increase their ability to access regional and international markets and establish links with global supply chains, allowing them to obtain much needed hard currency
• Develop a government partnership with the private sector to promote digital literacy among MSMEs through developing targeted and context specific trainings to build online business skills
• Support the development of the Knowledge Economy

10.Launch a fiscal incentives program for tech investors and all startups operating in the knowledge-based economy

11.Set up special economic zones (artificial intelligence, digital economy,...) to drive innovation and boost export

12.Update educational curricula in schools, universities and vocational and technical institutes to reflect the demands of the labor market in the digital age

13.Develop partnerships between universities and vocational institutes in which the private sector bridges the gap between knowledge gained at universities, and those required in the workplace

14.Create a Global Lebanese Technology Network, that puts local technology firms and professionals in contact with their Lebanese peers across the world, enhancing capacity building and access to international markets