Kuwait - Country Commercial Guide
Digital Economy
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Overview

Kuwait’s Vision 2035 focuses on diversifying the economy away from oil and transforming Kuwait into a regional financial hub.  Kuwait’s digital transformation roadmap is a key part of Vision 2035 and includes investing in digital infrastructure, promoting innovation, and creating a digital ecosystem that supports startups and entrepreneurs.

Kuwait’s Information and Communication Technology (ICT) market was valued at $22.48 billion in 2023 and is expected to reach $39.83 billion in the next five years.  Kuwait’s telecom industry is advanced with 5G and 6G services, fiber optic cabling, satellite connectivity, and Wi-Fi accessibility throughout the country. 99.4% of the population have a home internet connection and the 5G network reaches around 97% of the population.

The ICT sector is governed by the Communication and Information Technology Regulatory Authority (CITRA).  CITRA manages and enforces Kuwait’s data privacy regulations, including the requirement to store certain sensitive data in Kuwait.  CITRA works closely with the Central Agency for Information Technology (CAIT) to roll out e-government and government technology projects.  CAIT aims to build a national data center and digitalize more than 90% of government services in the next five years.

In 2022, the Kuwait Government established the National Cybersecurity Center (NCSC), the regulator for all cybersecurity activities.  NCSC collaborates closely with CAIT to oversee government sector cybersecurity and implement initiatives including the Zero Trust program in partnership with Microsoft.


Market Challenges

Regulatory environment

Data Privacy: There is currently no data protection regulation.  Data is governed by the Electronic Transactions Law (E-transactions) 20/2014.

In February 2024, CITRA released Data Privacy Protection Regulation No. 26 of 2024.  This regulation repeals and replaces Data Privacy Protection Regulation No.42 of 2021 and provides guidelines for collecting and processing personal data by telecommunication and information technology service providers.  CITRA’s regulations applies exclusively to persons or entities holding licenses to offer communication services to the public, manage communication networks, or provide internet services for public communication. Entities falling outside the purview of these established regulations are governed by the Kuwait National Cybersecurity Center (NCSC).

Cybersecurity: The Kuwait Government developed the NCSC to protect government networks and critical infrastructure assets.  Specific areas of focus include infrastructure protection, integrated risk management, network security equipment, and other information security software. 

Kuwait faces several cybersecurity challenges including the rapid advancement of cyber-attack methodologies, insufficient cyber-awareness among users, and a lack of comprehensive legislation to effectively combat cyber threats.  Kuwait is listed as the third most attacked country by ransomware in the Gulf Cooperation Council (GCC) region.


Digital Trade Barriers

Data Localization: CITRA’s policy classifies data according to the content sensitivity: first tier (public data), second tier (private insensitive data), third tier (private sensitive data) and fourth tier (highly sensitive data).

There are restrictions on international personal information data transfers.  There are data localization requirements for tiers three and four, and government entity data falls within the tier four. These types of data must not be hosted or stored outside Kuwait.

Third Country Influence: Digital cooperation between Kuwait and China continues to strengthen and Chinese companies have been increasingly successful in being awarded contracts for digital infrastructure projects based on aggressive pricing. 

In September 2023, during Kuwait’s Crown Prince Sheikh Mishaal Al-Ahmad Al-Jaber Al-Sabah visit to China, seven MOUs were signed (including renewable energy, housing, and electricity and water sector cooperation agreements).


Digital Trade Opportunities 

Kuwait’s ICT market continues to evolve especially in cybersecurity, artificial intelligence, digital transformation, and financial services.  The COVID-19 pandemic sped up the digitalization of numerous industries and prompted the public and private sectors to invest more in AI, internet of things, big data, cybersecurity, and cloud services. 

Cross-Sector Enabling Technologies

Artificial Intelligence (AI) and Big Data: AI and big data technology usage is surging with an increasing number of startups (since 2000, investment in AI startups has quadrupled), tech incubators, and innovation hubs.  Local entrepreneurs are leveraging these technologies to create solutions that cater to the local as well as international markets. Kuwait formulated a comprehensive National AI Strategy to promote research, development, and AI applications.

The public and private sectors have made substantial AI and big data investments, contributing to the growth of a robust ecosystem (across multiple industry sectors including healthcare, education, finance, and oil and gas).

Kuwait Oil Company (state-owned company for upstream operations) announced its five-year digital transformation strategy aimed to implement the latest technologies into its operations.  KOC allocated an $800 million budget for its digital transformation.  Their Big Data Galaxy scheme includes 11 sub-projects for developing the IT infrastructure and digitizing data and operations to enhance predictive maintenance, improving exploration, and increasing oil production.

Specific Industry sub-sectors

Financial Technologies: The financial services industry is rapidly transforming and in 2022, the Central Bank of Kuwait put into effect a digital banking law. 

Banks are investing heavily in their IT infrastructure and their strategic plans include:

  • Transfer to digital banking services.
  • Work with fintech companies to improve digital payments, electronic loans and data analysis.
  • Develop smart phones apps for banking operations and improve the banking internet banking services.
     

Kuwait’s e-commerce market is rapidly expanding as a result of high internet, mobile phone, and banking penetration.  Online digital payments (Knet, Apple Pay, and Google Pay) have grown nine times faster than point-of-sales transactions over the past five years. 

Cybersecurity: Kuwait’s cybersecurity market is on a rapid trajectory and cybersecurity market revenue is projected to reach $85 million in 2024 ($37 million in cyber solutions and $48 million in security services).  The government’s launch of the National Cybersecurity Strategy to aiming to secure national assets including critical infrastructure; national data, internet, and communication technologies.

  • Digital Economy-related trade events:
  • GITEX Global Tech Exhibition October 14-18, 2024, Dubai 
  • GISEC Global, Cybersecurity Trade Show May 6-8, 2025, Dubai 
  • BLACK HAT MEA, Cybersecurity conference & exhibition November 26-28, 2024, Riyadh
  • LEAP Tech event February 9-12, 2025, Riyadh

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