Software has biggest share in IT sector. Europe is the main export market - Lebanon

Software has biggest
share in IT sector
Europe is the main export market
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Half of the companies working in information technology (IT) are software developers, according to “The Lebanese IT Sector: Overview and Investment Opportunities” report released by the Investment Development Authority of Lebanon (IDAL).

The IT industry is mostly dominated by small and medium-sized enterprises (SMEs) and operates across three major activities: The first and largest is software development (48 percent), mainly focused on the healthcare, education, and banking sectors. “This sector constitutes more than half of the industry, because the remaining activities cannot be built without the assistance of a software developer,” said Michel Chammas, CEO of BSynchro, local software developer. The second activity is web solutions companies (38 percent), mainly involved in web hosting, web design and development, and e-services. The third activity is mobile services and applications (14 percent).

The report said: “The sector has been progressively moving from retail and wholesale activities into innovation and content generation.”

The global trend is that around 70 percent of Information and Communications Technology (ICT) firms are export oriented. Europe is an important export market for local ICT products, receiving approximately 35 percent, with France being at the top of the list. Chammas said: “It is because the two France-based software companies, Murex and Soft Solutions, are present in the local market.” However, the GCC remains the top importer of software products, he said.

According to the report, an interest in African markets is now increasing among local IT firms that are exploring the potential and wealth of opportunities of emerging African markets. “Our software is not very adapted to European markets because they have reached a much higher level of maturity, while we are closer to Africa in terms of language and awareness,” he said. African countries, such as Gabon and Kenya are targeted.

The workforce is not only competent but is highly cost competitive, according to the report. The labor base is relatively cheaper than those of the United States, Europe, and Gulf Cooperation Council countries. The average wage of a software engineer is nearly 40 percent lower than in the GCC.

The IT sector attracted around $17 million worth of IDAL incentives between 2003 and 2015. The value forms only one percent of the total in the past 12 years. The software industry is comprised of around 211 companies and employs around 5,000 individuals.
Reported by Yassmine Alieh
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Date Posted: Apr 01, 2016