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AI could be a big Middle East story. But can it deliver business growth?

AI is becoming a force to reckon with in the region’s economy, with prominent businesses adopting the technology, creating industry-leading use cases.

AI could be a big Middle East story. But can it deliver business growth?
[Source photo: Anvita Gupta/Fast Company Middle East]

For years, it has been said in the corporate Middle East that artificial intelligence (AI) will fuel business growth. That belief, mostly, was inspired by a flood of venture funding and company spending. And the payoff, optimists insisted, will spread across the economy.

Has it happened yet?

Amid coverage of conflicts, slowdowns, tech layoffs, and the rest, the Middle East is getting something right. Businesses are harnessing the power of AI in every sphere — from enhancing the customer experience in retail to providing more accurate medical insights. 

Last month, business leaders were trained to utilize AI.

“By arming industrial leaders with skills and knowledge, we are boosting the country’s industrial capacity and accelerating its transformation,” said Mohammed Al-Qasim, Director of Science and Technology Adoption and Development at the Ministry of Industry and Advanced Technology in UAE, in a statement.

THE SIGNS ARE PROMISING 

The governments across the region, including Saudi Arabia and the UAE, are exploring AI as part of broad economic transformation plans.

The UAE’s AI Strategy 2031 aims to enhance the UAE’s reputation in the field by attracting AI companies and coders. By 2030, the UAE is expected to see the largest relative impact of AI in the region, contributing almost $100 billion, nearly 14% of GDP.

AI can be seen across various verticals in the region, including consumer, enterprise, and government activities. There are more than a thousand AI-based companies in the region. Research shows AI investments in the region to increase at a CAGR of 19% by 2023. Investments in AI across the Middle East are driven by a wide range of usage, particularly in automated customer agents, IT automation, and threat intelligence and prevention systems. 

AI has transformed how digital healthcare works, says Jalil Allabadi, CEO and co-founder of Altibbi, the Middle East’s largest AI-based digital health platform. “AI has benefited our growth. With innovative technologies such as AI, we have analyzed and interpreted increased data to provide more accurate medical insights.”

The AI-based digital health provider has ring-fenced part of its $44 million Series B fund raised in March to develop further AI and ML technologies to help doctors provide more precise diagnostics, referrals, and prescriptions.

“We will continue to focus on AI and understand how it can continue to better our services,” adds Allabadi.

AN AI-ENGAGED REGION 

The region’s prominent businesses are AI adopters, creating industry-leading use cases. Emirates Group began to “operationalize” AI development efforts in 2018. Emirates Flight Catering partnered with an AI-based company to reduce food wastage across its Dubai operations by over a third. The AI algorithms predict for each individual flight on each day, the volume of food that will be consumed by its business class passengers. Etihad Aviation Group transformed its finance operations using Microsoft AI, including modernizing its payment-inspection process using cognitive services. 

AI personalizes online and in-store shopping experiences for consumers. Recently, technology company I.AM+ rolled out its conversational AI platform, Omega, across Majid Al Futtaim retail outlets in the Middle East. Contextual interactions in English and Arabic power the platform. 

Yet another way, AI is helping customers during their in-store visits as a shopping assistant. Tally, an automated kiosk incorporated by Carrefour at Mall of the Emirates in Dubai, can scan the shelves and provide real-time discrepancies such as misplaced, unmarked, or missing products.

“AI is transforming enterprises in the Middle East at a whole new level — we now see a trend where business users will start delivering more value with AI than data scientists. It’s a defining moment in time for AI space in the Middle East,” says Sid Bhatia, Regional Vice President, Middle East & Turkey, Dataiku.

The most obvious manifestations of this are efforts to develop smart cities. Saudi Arabia’s $500 billion NEOM megacity is driven by AI, integrating robotics into every aspect of citizens’ lives, including AI-powered healthcare systems.

AI DISRUPTING SECTORS 

Customer service is currently the most active in using AI, while the financial service industry is a leading adopter, especially through chatbot technology. Emirates NBD, the UAE-based bank, has developed Eva, the first AI-based personal banking assistant in the Middle East. The bank also uses a customer service robot, Pepper, in its Dubai branch.

“The financial services sector relies heavily on the systems powered by AI and ML technologies to detect fraud and secure online transactions. For the last few years, the focus of players in the banking industry has been client life-cycle management,” says Bhatia. 

Banks are ahead of the curve when it comes to gaining comprehensive insights into their customers compared to any other industry. “Customer analytics in banking helps banks gain granular insights on current and upcoming requirements of their customer base,” he adds.

AI has given rise to the fintech in the region that is disrupting traditional financial services offering innovative financial products. Robo-advisory platforms are offering advanced investment services by using AI and automation – notable players include UAE-based Sarwa. 

Allabadi says AI is disrupting healthcare technology in the region, especially in the post-pandemic era. The remote healthcare market in the MENA region is projected to reach $2 billion in 2024. “We see a greater use of AI within the healthcare sector in the region, with several governments welcoming its potential,” he says.

The Egyptian ICT Ministry also announced the development of an AI system with Alexandria University to detect early signs of diabetic retinopathy, further highlighting the use of AI within the region. 

“We will continue to see AI play a pivotal role in the future of healthcare, particularly with the growing regional acceptance of digital health services,” adds Allabadi.

Meanwhile, the public sector focuses on machine-learning-powered initiatives, especially predictive AI, that can help governmental organizations make more accurate decisions. Abu Dhabi-based investment and holding company ADQ launched Growth Lab to support R&D in tech with a $27.2 million planned investment. It will allocate more funds to fast-track trials and the adoption of AI and automation.

Some strike a more cautious tone, arguing that enterprises use AI as just marketing hyperbole. But all agree that AI is transforming how we work and live, although much of the value potential of AI is up for grabs. 

“Possibly, some enterprises might use it to oversell or market. However, AI has seriously penetrated the consumer market and enterprise operation. Enterprises are increasingly focusing on the true benefit of AI to provide real business value rather than just trying to use AI for the sake of staying up with the hype,” says Dr Neamat El Gayar, Director of the Centre of Excellence in Applied Artificial Intelligence and Data Science; Programme Director of the MSc in Artificial Intelligence at Heriot-Watt University Dubai. 

A PwC study in 2020 shows that 52% of companies accelerated their AI adoption plans because of the pandemic, and 86% say that AI was becoming a mainstream technology at their company in 2021. 

“AI and analytics became essential to enterprises due to the shifts in working arrangements and consumer purchasing during the pandemic. As the adoption of these technologies continues, enterprises will continue to learn more about AI, hopefully guiding their efforts moving forward,” adds El Gayar.

Countries in the region are unlocking the full potential of Industry 4.0 solutions. The UAE’s Industry 4.0 initiative aims to boost manufacturing by 30% and add $6.8 billion to the country’s economy by 2031, and AI is the answer. 

The UAE is not the only one; many other countries in the region have their eye on the same prize – the Middle East is expected to accrue 2% of the total global benefits of AI in 2030. This is equivalent to $320 billion.

The frontrunner in this race, neighboring Saudi Arabia, has a bigger population and deeper pockets. Saudi Arabia has assembled institutional support, forming an intellectual property agency in 2017, opening a National Center for AI, an AI regulator, and AI college. The country is also an investor in AI-driven tech companies through its stake in the Softbank Vision Fund.

EMERGING NEW ROLES

New roles are emerging in the regional economy while its contours are still being shaped. With the increase in adoption and scale, new players are joining the teams developing, deploying, and managing AI. There’s an influx of roles now involved in AI projects — project management and leads, risk managers, subject matter experts (SMEs), annotators, hardcore data science internal think tanks who do most things in code, and more, says Bhatia.

“With success from initial AI projects comes more involvement from business stakeholders who want visibility into projects and potentially even review and sign-off at key steps,” he adds.

To make the most of these offers and understand the risks, governments and businesses will need to upgrade how they educate and train the workforce. Hiring people with skills is difficult across industries due to a shortage of talent and skyrocketing demand. “Upskilling business staff is a great way to fill talent gaps, and in many ways, it’s necessary for businesses that want to democratize data science,” says Bhatia.

As the region aims to become a world leader in AI, putting ethics at the core of its strategy is emphasized. At the World Economic Forum at Davos, Omar Sultan Al-Olama, the UAE minister for AI, digital economy, and remote work applications, the first minister dedicated to AI by any government in the world, said the UAE has signed a strategic agreement with the University of Oxford to send government officials, CTOs and directors to school for an eight-month course “to understand what the ethics of AI are, understand good uses of AI and the value of AI.”

Sometimes, for businesses, AI ethics reflects a fear that regulation risks stifling innovation. But is the lack of AI-specific regulation limiting the progress of enterprises as they cannot factor legislation requirements into their long-term planning? “There is no doubt that the lack of regulation of AI is a challenge that not only enterprises face, but people as well,” says El Gayar. “Both are inextricably related as the credibility of enterprises largely relies on transparency with their target audiences.”

According to McKinsey, by 2030, about 70% of companies will have adopted some AI technology. Currently, algorithmic bias and data storage rights are among the main challenges concerning the regulation of AI. “Since algorithms rely on massive sets of personal data, data processing and storage must be regulated to ensure the privacy of individuals. In addition, algorithmic bias can perpetuate existing inequality in our society. Therefore, AI legislation is necessary for the safety of individuals and the transparency of enterprises,” she adds.

Although legislators across the globe are still facing challenges in designing laws specific to the regulation of AI, some progress has been made lately. In 2021, the UAE issued a landmark federal data protection law, which provides clarity regarding the collection, processing, review, and transfer of data. Globally, some legislation addresses AI use; however, much of the challenge lies in implementation. Experts say with increased attention to the issue and AI’s use becomes more regular, AI regulation is expected to become more effective. 

Ultimately, to generate tangible business value and deliver business growth from AI, organizations need to harness advanced analytics and AI for both the short-term – think quick, high-value wins – and the long-term – establishing a transformative, AI-embedded culture that transcends the entire organization. 

“To usher in a two-pronged approach in a scalable and sustainable way, organizations need to embrace Everyday AI — AI that is so ingrained and intertwined with the workings of the day-to-day that it’s just part of the business and not being used or developed exclusively by one team, such as the analytics team or the central data science team,” says Bhatia.

It won’t be a stretch to say that AI feats are impressive but not transformational –  in the way electricity was. But it is only a matter of time because a tidal wave of transformation is underway.

ABOUT THE AUTHOR

Suparna Dutt D’Cunha is the Editor at Fast Company Middle East. She is interested in ideas and culture and cover stories ranging from films and food to startups and technology. She was a Forbes Asia contributor and previously worked at Gulf News and Times Of India. More

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