How artificial intelligence is fuelling growth in the private and public sectors

As part of ongoing efforts to diversify their economies and build a platform for sustainable future growth, MENA nations are increasingly turning to artificial intelligence (AI). A slew of recent investment and initiatives – primarily in academia and the government, but also in the private sector – has reinvigorated interest from industry leaders around the globe in the potential for AI to strengthen the efficiency and sustainability of MENA economies. AI could bring about an additional $320bn in economic growth in the MENA region by 2030, according to a report from the Economic Intelligence Unit (EIU) and Google published in early 2022.

Economic Potential

In recent years the UAE, Saudi Arabia, Qatar and Egypt have published government-driven strategies to develop AI. However, much of their momentum was derailed in the Covid-19 pandemic’s early months. Despite the temporary setback, the pandemic has underscored the urgency of economic diversification, and several MENA nations have accelerated investment in non-hydrocarbons sectors where AI could play a key role.

A March 2022 report from Saudi management consultancy Strategic Gears recommended that the country focus on harnessing AI to boost three sectors – oil and gas, government services and financial services – that already contribute more than 50% to GDP. Manufacturing, health care, education, automotive, retail and e-commerce, and transport are also positioned to benefit from the technology. Rather than being restricted to ICT and tech-based fields, AI is expected to have a far-reaching impact across broader economies and will be vital to realising longterm economic plans. “The implementation of AI is helping businesses become more customer-centric, efficient, productive and competitive in both local and regional markets,” Said bin Abdullah Al Mandhari, CEO of ITHCA Group, an Omani ICT company, told OBG. Cybersecurity is another area where AI can add value. Cyberattacks have been on the rise since Russia’s invasion of Ukraine in early 2022, presenting an elevated threat to emerging markets.

In a region where several countries derive sizeable portions of GDP and export revenue from hydrocarbons, it is unsurprising that the energy sector has attracted significant AI investment from governments and companies looking not only to diversify away from oil and gas, but also to bolster the sector’s efficiency and reduce its carbon emissions. AI is also expected to be highly valuable in enabling the transition to green energy by managing the decentralised electricity systems renewable sources rely upon and monitoring carbon emissions.

Investment in the Future 

Given their large youth populations, many MENA nations are making significant investments in AI education, training and research to ensure that such technologies play a key role in the future economy and workforce. Of the $320bn the EIU-Google report estimates that MENA nations will generate by 2030 thanks to the adoption of AI, Strategic Gears expects Saudi Arabia to yield 42%, partly due to its investment in education. Roughly three-quarters of the Vision 2030 goals involve data and AI, and the Kingdom plans to train 20,000 data and AI specialists by the end of the decade. Highlighting this focus, in April 2022 national energy major Saudi Aramco signed a memorandum of understanding with King Abdullah University of Science and Technology to establish a new research centre to advance AI technological development.

Given that AI’s benefits are multi- and intersectoral, MENA countries can craft strategies and build AI-tailored ecosystems to suit their respective economic and social structures. As MENA nations and other emerging markets continue to invest in AI education, some industry figures say they may have a distinct advantage over developed countries by leveraging local talent to bolster their economies.