As part of ongoing efforts to diversify their economies and build a platform for future sustainable growth, MENA nations are increasingly turning to artificial intelligence (AI). A host of recent investments and initiatives, primarily in academia and government, but also in the private sector, have reinvigorated interest from industry leaders around the world in the potential of AI to enhance efficiency and productivity. sustainability of MENA economies.
According to a report by the Economist Impact Unit (EIU) and Google published earlier this year, AI could deliver an additional $320 billion in economic growth in the MENA region by 2030.
Many long-term economic strategies in the region target high-value sectors with the potential to benefit from the Fourth Industrial Revolution, a series of technological advances in AI, data, and cloud computing that are merging the physical, digital, and biological worlds.
The economic potential of AI
In recent years, the United Arab Emirates, Saudi Arabia, Qatar and Egypt have published ambitious government-driven strategies to develop AI. Much of its momentum, however, was derailed in the early months of the Covid-19 pandemic, when attention turned to dealing with the developing health situation, the broader economic downturn and the collapse in oil prices. .
Despite the temporary setback, the pandemic has underscored the urgency of economic diversification, with several MENA nations accelerating investment in sectors other than hydrocarbons where AI could play a key role.
Global private sector investment in AI, driven largely by companies from China and the US, rose 40% in 2020, according to a Stanford University study, underscoring growing interest in the field and its benefits. possible applications, especially in applications with high added value. sectors
A March report by 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% of GDP. Manufacturing, health care, education, automotive, retail and e-commerce, and transportation are also positioned to benefit from the technology.
Rather than being limited to ICT and technology-based fields, AI is expected to have a far-reaching impact on broader economies and be key to realizing long-term economic plans.
“Implementation of AI is helping companies become more customer-centric, efficient, productive and competitive in both local and regional markets,” Said bin Abdullah Al Mandhari, CEO of ITHCA Group, an investment company, told OBG. Oman ICT.
“This is already the case in Oman’s oil and gas industry, and progress in priority sectors such as fisheries, tourism and logistics will be particularly important. Ultimately, AI can help unlock the potential of these sectors, see them become significant contributors to the national GDP, and help achieve their goals under Oman Vision 2040.”
Cybersecurity is another area where AI can add value. As OBG recently detailed, Cyber attacks have been on the rise since the Russian invasion of Ukraine, posing a heightened threat to emerging markets..
According to media reports, an extensive phishing campaign involving the impersonation of the UAE Ministry of Human Resources was recently uncovered with the help of an AI digital risk monitoring platform from India’s CloudSEK.
Energy efficiency gains
In a region where several countries derive sizeable portions of GDP and export revenue from hydrocarbons, it is not surprising that the energy sector has attracted significant investment in AI from governments and companies seeking not only to diversify beyond oil and gas, but also strengthen the sector. efficiency and reduce its carbon emissions.
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Abu Dhabi National Oil Company (ADNOC) has already implemented machine learning to mine its historical and current data, which has helped generate scenarios and forecast operations that ADNOC estimates generated $1 billion in “business value” for three years.
AI is also expected to be invaluable in enabling the transition to green energy by managing decentralized electricity systems that renewable sources rely on and tracking carbon emissions.
To this end, in May, London-based AI startup Arloid Automation announced three new partnerships across the Middle East to track and reduce emissions.
Investment in the future
Given their large youth population, many MENA nations are making significant investments in AI education, training, and research to ensure that such technologies play a key role in the economy and workforce of the future.
Of the $320 billion the EIU-Google report estimates MENA nations will generate by 2030 from AI adoption, Strategic Gears expects Saudi Arabia to return 42%, in part due to its investment in education. Roughly three-quarters of the Saudi 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 approach, in April, the leading national energy company, Aramco, signed a memorandum of understanding with the King Abdullah University of Science and Technology to establish a new research center to advance the technological development of AI.
Among the UAE’s largest investments in AI education was the establishment of the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) in 2019. Located in the Masdar City smart city and innovation cluster, MBZUAI is ranked 30th globally. among institutions conducting research in AI. computer vision, machine learning and natural language processing, according to the computing metrics-based platform CSRankings.
Elsewhere, Qatar has several branch campuses of renowned universities, such as Carnegie Mellon University in the US, where students can pursue AI-related degrees and research. The country is also home to the Qatar Center for Artificial Intelligence, which is working to attract talent to its AI faculty and establish a center for research and policy.
Since the benefits of AI are multi-sectoral and cross-sectoral, MENA countries can design strategies and build AI ecosystems tailored to their respective economic and social structures.
For example, as part of the Egyptian government’s efforts to harness AI for economic growth and improved quality of life, it is allocating funds for teacher training programs and other AI-related vocational initiatives.
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 nations by tapping into local talent.
“With the drive toward affordability, a defining trait in developing markets, now also a feature of more advanced markets, software engineers in developing markets are gaining a competitive advantage based on the combination of their inherent affinity for profitable solutions and open possibilities. by AI,” Soham Chokshi, CEO and co-founder of logistics software provider Shipsy, told OBG.
However, to realize this competitive advantage and achieve significant improvements in national AI capacity, countries in the region will also need to incentivize investment.
“For Oman Vision 2040 to become a reality and accelerate economic development, the country needs to work on creating a conducive business environment for further investment in advanced technology, particularly in the area of AI and data analytics,” Maqbool Al Wahaibi, CEO of Oman Data Park, told OBG. “In this context, local IT companies will need to prepare to compete against global players that are expanding their presence in the local market.”
By Oxford Business Group
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