The ICT sector in Lebanon has witnessed considerable government attention and reform over the last decade, transforming it into one of the most prominent economic sectors today. Its positive growth outlook for the coming years will be fueled by investments in the telecommunications infrastructure, modernization initiatives by both the public and private sector, and improvements to the business environment, resulting in greater demand for ICT services.

KEY FACTS AND FIGURES:

• In 2018, ICT contributed to around 2.1% of the Lebanon’s GDP, the equivalent of USD 1.1 billion.¹
• The sector’s total impact on GDP, whether direct or indirect, is forecasted to reach USD 7 billion by 2025.²
• The ICT sector encompasses ICT Services and Manufacturing, Hardware Retail, and Telecommunications. Around 550 companies are involved in ICT Services and Manufacturing, which represents the most productive component. They are mostly small and medium-sized businesses.³
• Around 10,150 high-skilled individuals are employed in ICT Services & Manufacturing companies, the majority falling in in the Software sub-sector
• ICT services exports have more than doubled over the last decade, growing from USD 329 million to USD 640 million between 2002 and 2017, the equivalent of a 6.9% CAGR.⁴ The GCC remains the largest market for Lebanese ICT companies.

COMPETITIVE ADVANTAGES:

• Talented & Cost-Competitive Workforce:
  
  • Lebanon ranks 4^th globally in the quality of its math and science education.

  • The average Lebanese software engineer is tri-lingual, adaptable, solution-oriented and highly creative.

  • The average wage of software engineers is 27% less than in GCC countries.

• Strong Support Network: Lebanon is home to a thriving technology ecosystem which comprises a dozens of incubators, accelerators, and mentorship and training institutions.

• Business-Friendly Regulations: Major legislative reforms are being implemented to improve the business framework in the country.

• Access to Finance: The government, private sector, and international organizations offer various financing schemes for SMEs operating in the technology sector, including equity and grant financing and loan guarantees.

• Enabling Infrastructure:
  • The fiber-optic network is currently under deployment and will be completed by 2022.
  • There are a variety of business parks that offer attractive packages and rates for tech companies, such as the Beirut Digital District.

MARKET OPPORTUNITIES:

The ICT sector in Lebanon has demonstrated over the years a strong capacity for growth and a unique resilience in the face of regional economic uncertainties. Its export-oriented nature, low capital requirements, and robust regional and international demand make it an ideal sector for investment. A variety of opportunities exist across a broad spectrum of ICT activities:

1- Global/Regional Opportunities Fueling IT Outsourcing:

• Cloud Computing: In 2018, global revenues reached USD 197 billion and are expected to continue rising at an annual rate of 12.5% to reach USD 355 billion by 2022.
• Artificial Intelligence: The global AI market size was valued at USD 24.9 billion in 2018 and is anticipated to expand at an impressive CAGR of 46.2% from 2019 to 2025.
• Robotic Process Automation: The global RPA market size is expected to reach USD 11 billion by 2027, expanding at an annual rate of 34% from 2020 to 2027.

2- Opportunities Driven by Local Specialties:

• FinTech: The FinTech market is a prominent one in the MENA region, and Lebanon has a strong foothold in it compared to its relatively small size. There are 28 companies involved in FinTech-related activities.
• EdTech: EdTech is a highly promising industry which has been growing thanks to Lebanon’s renowned educational sector. With 16 EdTech startups in the country, there is a growing appetite today for Arabic educational content, notably in the GCC.
• HealthTech: Lebanon is a leading healthcare hub in the Arab world, headed by dozens of prominent private and public hospitals. These institutions are fueling the sector’s digitization. There are around 10 HealthTech startups in the country today.

Source:  ¹CAS, National Accounts, ² Strategy&, ³IDAL ICT Database, ⁴World Bank