In many economies, innovation ecosystems grow faster than the industries they are meant to support. Technology hubs expand, pilot projects multiply, and new platforms emerge, while logistics, energy, trade, and services continue to operate with limited structural change. The result is visible innovation activity without lasting productivity gains.
Oman enters this phase of development under different conditions. As part of Vision 2040, the country has already moved beyond early diversification. Non-oil activities now account for more than 70% of GDP, and sectors such as logistics, energy, manufacturing, and services anchor both employment and capital formation. The next challenge is not adding more innovation initiatives, but ensuring that technology integrates directly into how these sectors operate.
This perspective is shaped by observations from Matvii Diadkov, a technology investor and operator who works hands-on with early-stage digital infrastructure and platform systems. His involvement in Oman reflects active, long-term participation in building foundational digital ecosystems across logistics, e-commerce, and real estate, aligned with the objectives of Vision 2040.
Where innovation often breaks down
Across markets, the same structural problem appears. Innovation develops around startups and standalone platforms, while traditional industries remain governed by legacy processes, fragmented data, and manual coordination. Technology improves isolated tasks but does not change system-level performance.
This gap has measurable consequences. In logistics-heavy economies, cargo volumes may grow while clearance times remain volatile. In energy, capacity expands while grid efficiency lags. In services, digital portals exist alongside paper-based workflows.
“Most coordination problems are not technical,” Matvii notes. “They sit between operators, regulators, and users. If technology does not connect those actors, it does not change outcomes.”
Oman has the advantage of addressing this gap early.
Integration in practice: what actually changes
Vision 2040 treats technology as an enabler of productivity rather than a standalone sector. That framing becomes operational only when digital systems integrate into existing value chains.
Logistics provides a clear example. Oman’s ports and free zones already serve as regional trade gateways linking the Gulf, Africa, and South Asia. Since 2022, the rollout of digital port community systems and unified customs platforms has reduced average clearance times to under six hours for low-risk cargo, compared with multi-day processes in earlier cycles. At the same time, total cargo volumes handled by Omani ports exceeded 130 million tonnes in 2024, growing without a proportional increase in operating costs or staffing.
This improvement did not come from new physical assets alone. It came from integrating shipping lines, port operators, customs authorities, and logistics firms into shared digital workflows.
In energy, similar integration drives efficiency. Oman’s investment in smart grid systems and data-driven asset management allows higher load efficiency and supports renewable integration without destabilizing supply. Transmission losses have declined, maintenance cycles have shifted toward predictive models, and grid operators now manage demand with higher accuracy. Capacity expansion continues, but productivity gains increasingly come from coordination rather than construction.
In services and trade, digital identity, payments infrastructure, and integrated licensing platforms have shortened business registration and permitting timelines. While these improvements do not always show up immediately in GDP figures, they reduce transaction costs and improve capital efficiency across thousands of firms.
“When infrastructure connects processes instead of replacing them, productivity follows,” Matvii explains. “That is where technology starts compounding.”
Why Oman’s structure enables integration
Oman’s economic structure supports this approach. Gross fixed capital formation has remained stable over multiple years, while private-sector participation has increased under predictable regulatory conditions. At the same time, digital connectivity has reached near-universal levels, with internet penetration above 95%, nationwide 4G coverage, expanding fiber networks exceeding 880,000 premises, and broad adoption of 5G services.
This balance matters. In economies where digital ecosystems develop faster than physical and institutional capacity, innovation often outpaces absorption. In Oman, infrastructure, regulation, and market development have advanced in parallel, allowing digital systems to integrate directly into operational environments.
Matvii’s experience reflects this logic. His work focuses on platforms embedded in asset-heavy sectors where coordination failures create measurable costs. Across logistics, property, and regulated services, systems he has worked on addressed concrete problems: fragmented data, duplicated approvals, and misaligned incentives between private operators and public authorities. In each case, value came not from new technology layers, but from reducing friction between existing actors.
“Oman does not need innovation added on top of the economy,” he says. “It benefits from ecosystems designed to sit inside existing value chains.”
Avoiding innovation for its own sake
A common risk in diversification strategies lies in treating innovation as an end rather than a mechanism. Innovation hubs expand, pilots multiply, and visibility increases, while productivity remains flat.
Vision 2040 implicitly rejects this model. Its emphasis on efficiency, institutional capacity, and competitiveness creates space for ecosystems that reinforce traditional sectors instead of competing with them.
“Innovation becomes durable when it disappears into operations,” Matvii adds. “When users stop calling it innovation, it usually means it is working.”
Building integrated ecosystems toward 2040
By 2040, Oman aims to deepen private-sector participation, raise productivity, and strengthen its position across logistics, energy, and services. These outcomes depend less on the number of innovation initiatives and more on how effectively digital systems integrate into core economic functions.
Innovation ecosystems deliver the most value when they function as connective tissue—linking infrastructure, regulation, and market activity into coherent systems. Oman has the institutional and structural conditions to build those connections early.
That alignment represents one of the country’s strongest advantages as it advances into the next phase of Vision 2040.
