Artificial Intelligence (AI) is set to be a transformer for the global economy and much of its value potential will be accessible for investors and entrepreneurs alike. According to recent reports conducted by financial firms, AI is estimated to contribute up to $15.7 trillion USD to the global economy by 2030. It is estimated that the Middle East is primed to accrue 2% of that global windfall, which is equivalent to $320 billion USD.
In the wake of a subsequent industrial revolution, governments and businesses across the Gulf Cooperation Council (GCC) – Saudi Arabia, UAE, Oman, Kuwait, Qatar and Bahrain – are preparing for the coming global shift towards AI and advanced technologies.
Parts of the region have already begun to embrace AI and the new digital age. The International Data Corporation (IDC) has analyzed that spending on cognitive and AI systems in the Middle East and Africa will grow from $37.5 million USD in 2017 to over $100 million USD by 2021, a growth rate of 32% annually. Additionally, according to a recent Microsoft survey, 72% of the region’s companies are planning to dedicate their budgets toward AI deployment in 2019.
Saudi Arabia and the UAE have so far demonstrated the strongest commitment towards AI implementation, with the latter already integrating aspects of narrow AI in the oil and gas sector coupled to blockchain usage in Abu Dhabi. In Oman, the Information Technology Authority (ITA) held a 4.0 Digital Trends Forum where they stressed the importance of AI as key driver of economic transformation.
Retail, healthcare, transportation and education have already started seeing benefits from AI, while some financial firms assess that the construction and manufacturing sectors represent the biggest opportunities for AI in the GCC, followed by the energy, utilities, mining sectors, and the public sector.
In absolute terms, firms see the largest share of gains accruing to Saudi Arabia, where AI is expected to contribute over $135.2 bllion USD to the economy in 2030, equivalent to 12.4% of GDP. In relative terms, the UAE is estimated to see the largest impact at close to 14% of GDP in 2030.
In Saudi Arabia, part of the strategic objectives around AI include digitizing the healthcare sector to improve efficiency and effectiveness, and to prepare citizens to meet future labor market needs by boosting internet user penetration from 63.7% to 85% by 2020.
In the UAE, Dubai is expanding AI implementation, with projects such as ‘Smart Dubai’, ‘Dubai 3D Printing’ and ‘Dubai Autonomous Transportation’ as their lynchpin strategies. Earlier this February, Abu Dhabi-based Etihad Airways moreover announced a strategic partnership with Microsoft to launch the region’s first in-house AI Academy.
Given the volatility in oil prices, hydrocarbon-reliant GCC economies have been compelled to pursue alternative sources of revenue and growth, which has stimulated AI investment much faster than other countries in the Middle East.
As economic diversification guides an emerging digital social contract in the region, it is a wise move for GCC governments to secure the development of their non-oil sectors through AI technologies in order to strategically position them for years to come.
