Artificial Intelligence (AI) technologies are rapidly revolutionising global economies, including those within the Gulf Cooperation Council (GCC) countries.
This development presents new challenges and opportunities, especially for the GCC countries, which have sought to expand labour market participation of local citizens through localisation initiatives.
While AI has the potential to create new jobs and economic opportunities, it could also displace some of the jobs previously occupied by human workers.
AI’s rapid growth in GCC nations has ignited a heated debate on the potential effect this technology will have on the localisation policies and initiatives; prompting many to ask whether AI technologies will displace jobs or open up new economic opportunities? In other words, is AI a threat or an opportunity for localisation initiatives in the GCC countries? The answer, as always, is complex and multifaceted.
The GCC countries have implemented a number of localisation policies in an attempt to lessen their reliance on foreign workers while increasing local citizens’ participation in the workforce.
For example, Saudi Arabia’s “Saudization” initiative seeks to increase Saudi nationals’ employment in the private sector, while the UAE has implemented “Emiratisation” programme with similar intent to boost participation of local nationals in the workforce.
The adoption of AI technologies in GCC countries could potentially thwart these localisation strategies across the region.
AI creates an ‘unprecedented challenge to GCC’
AI’s capacity to automate tasks that were previously performed by humans creates an unprecedented challenge to GCC countries with ambitious localisation targets, especially sectors that rely heavily on foreign workers.
Therefore, a key challenge in managing the impact of AI on localisation initiatives is ensuring that local citizens have the skills required for AI-related jobs. According to McKinsey’s ‘The Future of Jobs in The Middle East’ report, automation technologies has the potential to displace between 10 percent and 45 percent of work activities in the GCC region alone, depending on the sector!
However, it is not all doom and gloom. The development of AI technologies could also create new employment opportunities for local citizens, particularly in industries related to AI development and implementation.
The development of AI-related industries such as robotics, machine learning, and data analytics could create new job opportunities that require high-level skills and qualifications, particularly in the areas of STEM (Science, Technology, Engineering, and Mathematics).
The economic benefits of AI
AI’s potential economic benefits are also too important to ignore. According to PwC’s ‘The potential impact of AI in the Middle East’ report, the AI industry has the potential to contribute up to $320 billion to the Middle East economy by 2030.
GCC countries such as Saudi Arabia and the UAE have been making significant investments in AI-related technologies and infrastructure, positioning themselves to take advantage of these potential economic benefits.
The dual impact of AI on GCC countries’ localisation initiatives raises several important questions. How will the job displacement be managed across industries? Will the new employment opportunities created by AI be accessible to local citizens, or will they require a different set of skills and qualifications? What kind of support will be needed to ensure a smooth transition from a traditional economy to one that is driven by AI?
To address these questions, GCC countries need to adopt an inclusive approach to managing the impact of AI on their workforces. To maximise the benefits of AI while minimising its risks, policymakers and the private sector must collaborate and work together.
The GCC countries can create a task force to develop strategies that encourage and accelerate the development and adoption of AI, while ensuring that localisation initiatives are not left behind.
This will require investing in up-skilling and re-skilling programmes designed to equip local citizens with skills required to thrive in an AI-enabled economy.
In addition, GCC countries need to invest in AI research and development. By supporting AI start-ups and entrepreneurs, GCC countries can foster innovation that keeps the region at the cutting-edge of global AI trends.
Policymakers should aim to find a balance between potential economic benefits of AI and its bearing on the workforce – this may require providing financial support to industries affected by automation such as construction or hospitality sectors and prioritising investments that are less susceptible to displacement from automation.
Ultimately, the impact of AI on GCC countries’ localisation initiatives will depend on many factors, including the pace of AI adoption, the strategies employed by GCC countries to manage this transition smoothly, and the extent to which AI-related industries are developed.
The advancement of AI technology presents a significant opportunity for the GCC countries to acquire new skills and create new jobs while enhancing localisation objectives. While the challenges associated with AI may exist, its promise for creating new opportunities for local citizens far outweigh them.
A comprehensive approach that prioritises the well-being of the local workforce can harness the power of AI and contribute to the growth of a knowledge-based economy with skills sets revolved around knowledge, creativity and innovation.
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