Jordan's REACH Initiative

About REACH

Jordan shall become a regional ICT leader and internationally recognized exporter of ICT products and services, exploiting its core human capital advantages, REACH 1.0, October 1999
   

Presented to HM King Abdullah II in October 1999, the REACH report laid out a clear plan of action to bolster the country's nascent IT sector and maximize its ability to compete in local, regional, and global markets.

It took a critical look at Jordan's strengths and weaknesses vis-à-vis other relevant competitors. Most importantly, it outlined a 5-year plan, specifying actions to be implemented-by the private sector, the Government, and by other stakeholders-to ensure a favorable place for Jordan in the Internet-based e-economy.
   

Economic Benefits

The Reach Initiative has set these targets to be accomplished by year 2004:

• 30,000 New Jobs

• $150m in Foreign Direct Investment

• $550m Annual IT Exports

Social Benefits

• Empowered population

• Improved public services

• Better education

Strategic Benefits

• Greater efficiency of government

• Creation of knowledge-based economy

• Enhanced economic competitiveness

• Less dependence on tradition markets

   
The information technology revolution now sweeping the world, has the potential to transform the traditional development paths of countries. In just the past two decades, the Information Technology (IT) industry has grown to be the principal driving force behind the world economy, with benefits that are only now being understood.
   

The rapid growth and accelerating innovation-the central characteristic of the IT industry-offers enormous opportunities. As with the Industrial Revolution before, the timing, positioning and actions of nations will determine those who will benefit from this Knowledge Revolution, and those that will be left behind. The situation calls for carefully thought-out strategies and actions, demanding the attention of leaders in every nation.  It also creates a great sense of urgency, since delay will lead to incalculable opportunity costs, making catching-up ever more difficult.

The initial REACH report presents a national strategy for Jordan to develop a vibrant, export-oriented Information Technology Services sector. The strategy lays out the main thrusts to bolster the country's nascent IT sector and maximize its ability to compete in local, regional, and global markets. It takes a critical look at Jordan's strengths and weaknesses vis-à-vis other relevant competitors. Most importantly, it outlines a clear action plan, specifying actions to be implemented—by the private sector, the Government, and by other stakeholders—to ensure a favorable place for Jordan in the knowledge-based economy of the future.

The strategy responds to a request to the IT industry leaders by His Majesty King Abdullah II on June 30th for a concrete proposal aimed at strengthening Jordan's IT sector. In response, a core group of members of the Jordan Computer Society (int@j) devised the REACH initiative, a comprehensive framework that embraces actions in terms of:

• Regulatory Framework

• Enabling Environment (Infrastructure)

• Advancement Programs

• Capital & Finance

• Human Resource Development

In crystallizing this plan for development of the IT industry, the int@j received technical support from the Access to Microfinance and Improved Implementation of Policy Reform (AMIR) project of the United States Agency for International Development (USAID). The strategy and action plan was developed through an intensive consultation and research process with Jordanian IT industry leaders and international and domestic consultants.

Software and IT Services: The Core Focus of Jordan’s IT Strategy

The strategy focuses on the Software and IT Services sector, which comprises one of the most dynamic and fastest-growing parts of the IT industry. Global sales of software and IT services has grown at double-digit rates for the past decade. For Jordan, this focus makes sense due to several reasons:

• Low start-up capital requirements. This makes it easier and less risky for market entry by Jordanian firms, even small outfits formed by individuals.

• Jordan’s favorable location and position in the regional market. Its talented workforce, bilingual Arabic/English language capabilities, extensive relationships in the region, and time-zone local advantages, favorably position Jordan with respect to potential competitors.

• Human-resource intensity. Software and IT services require skilled human capital. Jordan's relatively well-educated workforce stands as a comparative advantage for these activities. Ample numbers of students are enrolling in computer-related disciplines; there is a natural inclination and enthusiasm for developing IT skills that owes much to the country's relatively open and liberal environment.

• Not affected by distance or transportation constraints. Unlike manufacturing and tourism that are affected by transportation mechanisms, software services are a “distance-less” industry. Its inputs and outputs are transmitted electronically.

These factors suggest that pursuing accelerated software and IT services development is not so much a choice, as it is a necessity. As seen in the box , the strategy shall have significant spillover benefits and multiplier effects.

Methodology

The report was prepared through a partnership between members of the REACH Initiative and joint team of international and local consultants over a period of a month. The methodology included several key elements:

• Strategic planning sessions. Key representatives of Jordan's IT industry participated in brainstorming, focus groups, and other types of strategic planning sessions.

• Survey of local software and IT service providers. Lack of reliable statistics on the size and activities of this sector made it necessary to conduct a quick survey. Aside from a formal questionnaire sent to over 40 firms, the consultants made telephone calls, and in several cases interviews with representative firms.

• Collection of other local data. A team of Jordanian consultants undertook a concentrated data gathering effort, to ensure more complete information about the IT sector performance and factors that affect its performance.

• Collection of international data. A team of international consultants gathered information concerning conditions and trends within the software and IT services sectors of Ireland, India, Israel, and Egypt for comparison. This included information on trade, investment, factor costs, regulatory aspects, and both physical and human infrastructure data.

• Formulation of a draft strategic plan. This was done based on the results of elements 1 through 4 above. Industry representatives met two times to confirm and prioritize key recommendations in terms of an action plan. A presentation was then made to solicit feedback from industry representatives—i.e., to "test" the plan based on their insight and experience. The plan was adjusted to reflect these comments.

This initial strategic planning process culminated in the present report and associated annexes. By the end of August of 1999, leaders of the REACH initiative hope to present their findings and recommendations to HM King Abdullah II, and to other key policy makers and leaders interested in the role of information technology in Jordan's future.

The strategy does not directly address the IT hardware (H/W) sector, although its implementation will work in favor of attracting foreign investment and improving the overall climate for H/W manufacturing activities. Hardware has been an important sector for some nations known for being IT success stories (e.g., Ireland, Singapore, and Israel), but it has not been essential for others (e.g. India). This is good news for Jordan, whose IT hardware sector is presently undeveloped—although it may hold serious potential for the future.

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