OBG: AI could contribute $ 320 bn to MENA’s economy by 2030

29 / 04 / 2023

By Marwa Nassar - -

Artificial Intelligence (AI) could contribute up to $ 320 to the Middle East and North Africa (MENA) region’s economy by 2030, according to a report by the Oxford Business Group.

AI could contribute some $15.7 trillion to the global economy by 2030, according to consultancy PwC. Of this, 2% – or $320bn – is expected to benefit MENA region. The annual average growth in the contribution of AI to GDP in the region is expected to range between 20% and 34% in the 2018-30 period.

Saudi Arabia is poised to see the largest contribution to GDP in real terms from this transition, at $135.2 billion, while the UAE is expected to accrue the largest relative impact, at 14% of 2030 GDP. Bahrain, Kuwait, Oman and Qatar, meanwhile, are projected to see a collective contribution of $45.9 billion, or 8.2% of GDP in 2030.

To actualize these benefits, several the Gulf Cooperation Council (GCC) countries have taken the lead in preparing their economies to integrate and utilize AI.

The UAE became the first country to appoint a minister of state for AI in 2017, marking its intention to support investment in the area, and Qatar published its National AI Strategy in October 2019.

In October 2020 Saudi Arabia outlined its National Strategy for Data and AI, having established the Saudi Data and AI Authority and the National Center for AI the year before. By 2030 the Kingdom intends to attract an estimated $20bn in local and foreign investment in the field to support its goals.

At the same time, universities in the GCC countries have attracted increasing recognition for leveraging new technologies to improve educational outcomes. Saudi Arabia’s King Abdulaziz University rose to 101st place in the ranking of global universities this year published by Times Higher Education, and received a top score for UN Sustainable Development Goal 9: Industry, Innovation and Infrastructure.

Overall, Saudi Arabia claimed five spots on the list of the top-10 Arab universities, alongside Qatar University, the University of Sharjah, UAE University and Abu Dhabi University.

The shift to e-learning and the resulting proliferation of educational technology (edtech) options following the onset of the Covid-19 pandemic has already transformed the education landscape in the GCC.

The region’s embrace of ed-tech has made it a prime case study for the integration of AI in education. While labor-intensive fields such as retail and health care are expected to benefit from the automation opportunities afforded by AI, the public sector in MENA, which includes education, is expected to receive a contribution of $59bn in absolute terms from AI in 2030.

Tapping into the education benefits of AI will require collaboration between public and private entities.

“We need to understand and determine the role of education in a rapidly changing scenario, with important developments in the field due to technological advancements such as a growing online world and the introduction of AI-based tools,” Mansoor Alaali, president of Bahrain’s Ahlia University, told OBG. “All economic and social stakeholders must collaborate, discuss and convene on the next steps needed to ensure that higher education institutions continue to be a catalyst for economic development.”

In March Ahmad Al Falasi, the UAE’s minister of education, announced that the country was planning to use AI chatbot tutors to transform the education sector. Rather than supplant the role of teachers, the AI tutors would be used to generate content to encourage student learning. Online education tools are already being used by schools in the country to supplement classroom learning.

In terms of higher education, the UAE’s Mohamed bin Zayed University of Artificial Intelligence saw its inaugural class graduate in early 2023. Founded in 2019, the university is the world’s first graduate institution dedicated to AI research.

Meanwhile, in March the Bahrain Institute of Banking and Finance announced the launch of its metaverse campus, which is intended to provide students and professionals in business and finance with an immersive learning experience supported by the latest technology.

While there are concerns about the job losses that could occur as AI and automation replace a range of professional categories, industry experts argue that AI usage will create a slew of jobs in designing, building and maintaining such programmes.

In the MENA region, an estimated 45% of existing work opportunities could be automated today, just short of the global average of 50%. GCC countries are organizing vocational training programs to prepare their populations for a future where AI plays a larger role.

Such initiatives could also help fulfill localization requirements, providing a skilled domestic workforce that can inhabit positions often held by expatriates in the region.

Saudi Arabia plans to train 20,000 data and AI specialists by 2030 to support its goals in the field. An estimated two-thirds of the goals of Vision 2030 involve some aspect of data and AI. To help support these goals, in November 2022 the Kingdom’s King Abdullah University of Science and Technology launched a specialized program for undergraduates with the aim of training talented students to become leaders in the field of AI.

In March 2023 Bahrain’s Nasser Vocational Training Centre announced its Smart Coders initiative, which aims to train approximately 2000 adults annually to write computer code. By 2027 the initiative is expected to train a total of 10,000 Bahrainis to enter the workforce as programmers.

Bahrain has also received recognition for ensuring equitable opportunities in technology. The country ranked first in national female e-inclusion policies, female digital skills training and science, technology, engineering and maths education in Meta’s 2022 Inclusive Internet Index compiled by Economist Impact.

ICT and the digital economy are central to the kingdom’s Economic Recovery Plan, which aims to cultivate a digital infrastructure and local workforce to encourage international tech companies to set up shop in the country.

Earlier this year the UAE’s Ministry of Education announced the launch of a new innovation strategy that includes a platform known as DisruptED, intended to allow ministry employees to share their ideas for furthering innovation. Although the details of the plan have yet to be revealed, it is intended to help students and professionals from a range of disciplines to embrace new skill sets and ways of working as the digital economy evolves.