Does COVID-19 Pandemic Spur Digital Business Transformation in The MENA Region? Evidence From Firm Level Data

The worldwide precautionary measures adopted to contain the COVID-19 pandemic in early 2020 imposed a drastic negative impact on the performance of the business sector. To avoid losses and negative consequences, many rms have adopted digital solutions. This study assesses the role of the COVID-19 outbreak in accelerating digital transformation in the Middle East and North Africa (MENA) region. The analysis relied on micro data collected from 5,480 rms surveyed by the ILO/ERF COVID-19 MENA Monitor Enterprise Survey (CMMENT) in Egypt, Jordan, Morocco, and Tunisia. The analysis shows that the characteristics of the rm, including rm size and foreign ownership, spur digital transformation in the business sector. Moreover, rms encountering challenges, complying with pandemic containment measures, receiving support from government are more likely to digitize. Furthermore, the results demonstrate a strong association between the pandemic outbreak and digitization and that the rms operating in the service sector have a higher likelihood to adopt digital solutions. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD).