Could Artificial Intelligence be the answer to economic diversification in the GCC?
Estimated to contribute as much as $15.7 trillion to the global economy by 2030, Artificial Intelligence is considered a game changer and it could help revive their hydrocarbon-based economies.
Erratic oil prices in recent years have made economic diversification essential, and AI is an alternate solution.
Having made an early start, these states are positioned to become a key player in AI technology. Dividing the Middle East into four main regions, first, the UAE, second, Saudi Arabia, the GCC 4 comprising of Bahrain, Kuwait, Oman and Qatar on third and lastly Egypt, a PWC research expects the Arab states to accrue two percent of the total global benefits in the next ten years.
Projected to mark the highest gains, the UAE would get nearly 14 percent on its GDP in 2030 while the kingdom of Saudi Arabia should make over US $135 billion by that time as well, this being nearly 12.4 percent of its GDP.
Assigning large budgets for the speedy implementation of AI, these two GCC states have made a major impact.
Both the UAE and Saudi Arabia have been placed on the list of top 60 countries in the Global Innovation Index (GII) which measures the innovation progress and performance of 127 economies.
Last year in October, Abu Dhabi had unveiled a Strategy for Artificial Intelligence to implement AI in the fields of education, transport, space, health and renewable energy and announced a $270 million Dubai Future Endowment Fund. Additionally, the UAE became the first government globally to appoint a Minister exclusively for the field of AI.
Nowadays, Abu Dhabi is planning to introduce autonomous vehicles and robot cops. Omar bin Sultan Al Olama, the State Minister for AI, has declared that, "In 10 years we will be the capital of AI in service and government, I also think we will be a hub for AI in the region."
|Approximately 1.3 million new digital jobs could be created, including more than 700,000 in Saudi Arabia alone|
In the meantime, Riyadh has also invested in AI in a big way. Launching a futuristic megacity called Neom at the cost of $500 billion, Saudi Crown Prince Mohammed bin Salman plans to make it an Arabian Silicon Valley where, "Everything will have a link with artificial intelligence, with the internet of things everything."
Setting a global precedent, Saudi Arabia has symbolically granted citizenship to a robot.
|Read also: Robot Sophia has more
rights than Saudi Arabia's migrant workers
Notably, the impact on these two Middle Eastern economies would be the same as on the economies of Southern Europe and developed parts of Asia. Not far behind, the states of Bahrain, Kuwait, Oman and Qatar would also make significant gains from their investments in AI.
Nevertheless, some drawbacks will have to be tackled.
By employing AI tech, the main burden could fall on expat workers as 93 percent of the automation potentially affects their jobs in the Gulf states.
According to a McKinsey study released in February this year, nearly 45 percent of these jobs are technically automatable and AI could lay off 2.8 million full-time employees and help save around $366.6 billion in wages.
Not only that, a vast majority of GCC citizens would also be affected as they are mainly employed in the sectors carrying a high risk of disruption by new technologies. As a result, research determines that 37 percent people have become "technophobic" and fear their jobs could be taken over by robots and other AI software.
In the long run, AI would create jobs based on digital skills which would be immune to disruption by technologies. With flexible working hours, these new opportunities would offer "higher value-added roles" and as per McKinsey, "If, by 2025, the region reaches the same proportion of digital employment that the EU has today, then approximately 1.3 million new digital jobs could be created, including more than 700,000 in Saudi Arabia alone."
Therefore, the GCC states will have to be flexible as integrating human intelligence with AI is the main hurdle and governments would have to create a balance between the advantages and potential disruptions to withstand the overall impact of artificial intelligence.
Right now, AI would be the most beneficial in the following sectors: In the early stages, AI innovation could start with robot doctors, AI diagnostics, financial services and logistics. Encouragingly, approximately two-thirds of Saudi Arabia, the UAE and Qatar have no objection to replacing doctors with robots.
Meanwhile, only 55 percent of Europe is willing to explore such options yet. Cutting down on workforce, AI technology can also be useful in education services, managing cities, roads and transport networks.
|Approximately two-thirds of Saudi Arabia, the UAE and Qatar have no objection to replacing doctors with robots|
Mainly, AI could help in developing non-oil sectors such as construction and manufacturing, followed by mining, energy and the public sector. Being labour-intensive sectors with scope for automation, these fields can provide the most gains and provide room for further innovation.
Finally, having a thriving start-up scene, the GCC states were already looking for future-focused business models. As Sharif El-Badawi from the venture capital firm, 500 Startups says, "The tech revolution happening in the Middle East is fierce. The region is taking every opportunity to leapfrog its way in adopting AI technologies and trends."
Nevertheless, the correct usage and education of AI and machine learning would be crucial as major transformation is expected.
Ideally, according to James Dening, Vice President, Europe at Automation Anywhere, "AI is there not just for the sake of AI but to benefit all of us, the entire society. AI should be used to replace boring jobs and instead allow people to do interesting jobs."
|The tech revolution happening in the Middle East is fierce. The region is taking every opportunity to leapfrog its way in adopting AI technologies and trends|
Implementing AI is also a smart strategy, as it will potentially 'disrupt' markets by kicking off new business models constantly. Remaining competitive and relevant is crucial for survival, and companies lacking an innovative approach would risk becoming obsolete in the future.
Having ability to innovate and provide outputs, the UAE has moved six places higher to rank first from the GCC in 2017, while Kuwait has currently moved up eleven places in its overall GII ranking.
Nowadays, the UAE has started expanding and integrating AI aspects into the oil and gas sector and blockchain usage.
Meanwhile, the 4.0 Digital Trends Forum was held in Oman promoting AI as a key driver of economic transformation. Also, Qatar and Muscat have launched technology focused free zones, namely, the Qatar Science and Technology Park and Knowledge Oasis. Collaborating with MIT on a joint AI project, the Qatar Centre for Artificial Intelligence has also released a blueprint for a National Artificial Intelligence Strategy for Qatar.
Sabena Siddiqui is a foreign affairs journalist, lawyer and geopolitical analyst specialising in modern China, the Belt and Road Initiative, Middle East and South Asia.
Follow her on Twitter: @sabena_siddiqi