Software sector to grow
nine percent a year

Mobile app industry is the next boom

The software sector is expected to achieve an annual growth rate of nine percent over the 2015-2018 period, according to recent data.

The local software industry generates an average value added of 79 percent of its total output, according to the Study on the Economic Contribution of the Software Industry in Lebanon, published by experts under the guidance of the World Intellectual Property Organization (WIPO). This compares with an average value added of just 31 percent for all Lebanese economic activities and an average of 34 percent for the manufacturing activities.

“The future growth in the software sector will be mainly in mobile application development, which will be the next boom in Lebanon,” said Gabriel Deek, General Manager at Omnisystems.

Since 2009, the growth of the Lebanese software sector was mainly achieved by the mobile app industry, thanks to the rapid advancement of smartphone penetration, according to the WIPO study.

Mobile app providers target the global market and there’s a vast increase in mobile users worldwide, Deek said. Moreover mobile app consumers have similar behavior patterns at the global level, which opens great marketing opportunities for local developers, he said.

“Local software companies are in a favorable position not only because they offer good products and services, but also because they can operate in several cultural and linguistic environments.” The industry’s comparative advantage lies in its quality to price ratio and in its ability to customize its services to match the needs of the customers, according to the WIPO report.

Domestic demand for software development is mainly driven by the service sector and the local market is far from saturated, the WIPO study said.

The software sector’s overall contribution to the Gross Domestic Product (GDP) and to nationwide employment remains modest, as it is estimated at 0.73 percent and 0.52 percent respectively, according to the WIPO report.

This sector also accounts for a small fraction of the Lebanese Information and Communication Technology industry (ICT). It was valued at $34 million in 2014, which represented just 9 percent of the overall ICT market, according to the Investment Development Authority of Lebanon (IDAL).