How do you expect the COVID-19 pandemic and low oil price environment to impact the Omani supply chain in the medium term?
The COVID-19 outbreak has changed both the businesses environment and social lifestyles all over the world. Globalization has received a reality check, with forced lockdown halting supply chains and logistics facilities. A great deal of outsourcing will need to be relooked at, especially when it comes to physical items, such as medical devices. The government has to view medical security the same way it has long-viewed food security. Fortunately, the government has realized how vulnerable it allowed Oman to become as a result of its dependency on imported items, especially in the medical industry, which has been put under enormous pressure. Thanks to technology, people can continue to work, and organizations can continue to function. There has been a rise in the adoption of cloud-based solutions, and local solutions, such as Igtimaati, will capture more market because of security and confidentiality issues. Companies providing technological solutions will witness revenue growth in the long run, since the post-COVID-19 reality will still bear the changes brought on by the pandemic.
What role can technology and digitalization play in supporting the business environment?
As highlighted by the establishment of the Technological Innovation Committee, technology has become the main asset for governments and businesses to counter the pandemic. This committee will supervise all IT initiatives directed to counter the epidemic and identify priorities and requirements to ensure diversity of initiatives and avoid repetition. It will also organize and direct specialized national capabilities to provide innovative IT solutions to curb the spread of COVID-19. In order to support Omani businesses, OTF allocated USD2.6 million to fund start-ups and deal with the day-to-day problems faced by Omanis. The idea is to invest in long-lasting solutions to fight chronic diseases and pandemics. There are a number of successful examples. Mandoob and Wareed are delivering medicines to prevent the elderly from leaving their homes. WAKAN tech, in cooperation with the Muscat Municipality, is using its drones to spray disinfectants. Drewel is cooperating with the Omani Farmers Association to enable farmers to sell their agricultural products. E-Mushrif and Scouting Wasp have developed a remote thermal examination system to scan faces and test body temperatures. In education, Ashal is helping students acquire scientific and practical knowledge and develop their skills remotely. Finally, Bahar Plus moved the wholesale fish market online in less than 10 days, going from zero revenues to USD25,000-50,000 in daily transactions.
Can you walk us through OTF's investment strategy in the medium term?
Based on a Magnitt report published in Q12020, Oman climbed to fourth place in terms of the number of deals. OTF has invested in 108 start-ups in the US, South Africa, and GCC countries. It aims to achieve sustainable economic growth by investing directly in local companies; facilitating the entry of foreign companies in the Omani market; and transferring and localizing modern technologies that will help Oman move toward a digital society. Our priorities in 2020 are targeting four Omani start-ups and scaling outside Oman through acquisitions. OTF seeks to support Vision 2040 and focus on investments in five core sectors: tourism, logistics, manufacturing, fishing, and mining.
What challenges do young companies and start-ups in Oman face?
SMEs are disproportionately affected by market failures and barriers and inefficiencies in the business environment and policy sphere. Their contribution also depends on access to strategic resources, such as skills, knowledge networks, and finance, and on public investments in areas such as education and training, innovation, and infrastructure. In Oman, the most prominent challenge is obtaining a payment gateway because it requires a lot of effort and time. Banks also have difficulties extending loans to SMEs. Finally, the commercial law needs to be updated to recognize different classes of shares that are central to a tech start-up's ability to attract and recruit talent.