Reimagining the ‘human side’ is key to unlocking tech-driven innovation in the Middle East

Middle East sovereign investors and state-backed funds are pouring unprecedented capital into technology infrastructure, but industry advisers warn that unlocking sustained, tech-driven innovation will depend on rethinking the "human side" of how organisations work. Saudi Arabia’s announcement of $14.9 billion in technology and AI investments at LEAP 2025 complements a broader $100 billion AI initiative under Project Transcendence, while the UAE hosts a $15.2 billion Microsoft-backed AI and cloud build-out. The region’s digital market was valued at about $145 billion in 2024 — with AI accounting for more than $40 billion — and is projected to grow to $907 billion by 2032.

"Technology enables innovation, but people are the true engine to make it happen," write Wissam Abdelsamad, Christian Stechel, Gustave Cordahi and Serena ElHage of Strategy&.

Those authors point to the scale of capital flowing from major regional investors — including Saudi Arabia’s Public Investment Fund (PIF), the UAE’s Mubadala and Qatar’s QIA — which are financing hyperscale cloud regions, AI platforms, venture funds and national digital programmes. The investment wave coincides with measurable improvements in macro indicators: Dubai now ranks fourth globally in the IMD Smart City Index, the UAE rose to 21st in StartupBlink’s Global Startup Ecosystem Index 2025, and several Middle Eastern countries have seen year-on-year gains in the Global Innovation Index.

Context and practical examples

Despite headline investments and improving rankings, the authors note that patent output, software investment and tech exports remain modest. Saudi Arabia submitted roughly 8,000 patent applications in 2024, the UAE about 1,200 and Qatar 129 — cumulatively representing just 3% of Patent Cooperation Treaty applications worldwide. Many regional companies continue to focus on system integration, managed services and assembling third-party solutions rather than exporting digital products at scale. MDS SI is cited as an example of a top regional IT services provider that has expanded through acquisitions and partnerships to deliver assembled solutions across vendors.

To convert infrastructure spending into repeatable innovation, the piece recommends organisational changes drawn from global examples. Amazon’s "two-pizza" teams — small, autonomous units with end-to-end ownership that helped produce AWS and Alexa — are highlighted as a model for scaling innovation. Non-tech firms are also referenced: ING’s shift to cross-functional squads reportedly raised its Net Promoter Score from -30 to +30 within one year, while GE’s FastWorks initiative enabled lean startup teams to cut development costs by up to 60% and accelerate time-to-market by years. Talent mechanisms such as rotating assignments, internal talent marketplaces and incentives for risk-taking are recommended; Google’s 20% time and OpenAI’s use of entrepreneurs-in-residence and fractional expertise are noted as practical precedents.

Outlook

• The authors argue that pairing world-class infrastructure with new operating models, talent systems and leadership mindsets is essential for the emergence of regional tech champions.
• They call for empowered, cross-functional teams with "mini-CEO" decision rights, cultures that value psychological safety and experimentation, and bold talent strategies to accelerate capability building in product management, applied AI and commercialisation.
• Absent such changes, the article warns that impressive capital deployments risk producing limited innovation outcomes despite significant public and private investment.

The piece is authored by Wissam Abdelsamad and Christian Stechel, Partners at Strategy&, with Gustave Cordahi as Principal and Serena ElHage as Manager.