AI as a key economic driver for Ƶ
https://arab.news/vuq4b
The Kingdom of Ƶ is at the crossover of an economic transformation driven by innovations and technology advancement in artificial intelligence. As the Kingdom continues to diversify or shift from its previous oil dependency, AI offers a significant opportunity to create jobs, bolster productivity, and enhance overall economic output and gross domestic product growth. By 2030, AI is estimated to contribute 12 percent to Ƶ’s GDP, highlighting the nation’s commitment to leveraging AI for sustainable economic development.
The Kingdom’s Vision 2030 framework focuses on reducing the nation’s reliance on oil through fostering technology-led industries with cutting-edge innovations. AI is vital and plays a significant role in this transition, especially by enhancing productivity in various sectors and facilitating the creation of a knowledge-based economy. A recent study by the ITU indicates that AI technologies are likely to contribute more than $13 trillion to the global economy by 2030, and Ƶ has the potential to capture a giant share of this growth.
Recently, Ƶ’s investments in digital infrastructure have given the Kingdom a stronger foundation for AI adoption. For example, World Bank reports indicate that Ƶ’s digital economy projects, such as the National Strategy for Digital Transformation, are laying a solid foundation for the country to adopt cutting-edge technologies across its sectors.
The adoption of AI technologies presents a conducive environment to create jobs, especially in high-skilled sectors. AI’s cutting-edge technologies can foster the creation of new markets and services, which are critical in generating employment opportunities. A report by the IMF indicates that AI has great potential to create a positive effect on job creation, and this can be done through enhancing productivity and the automation of routine tasks.
Whereas AI technologies present many opportunities for countries to foster their economic growth, some challenges cannot be overlooked.
Hamad S. Alshehab, Hassan M. Alzain
Like never before, the adoption of AI in Ƶ is likely to increase the demand for high-skilled workers in various fields. The country is focusing on training and education programs that aim at educating the workforce with the skills needed to ensure job creation and new opportunities. This is evident through the remarkable achievement of training more than 628,000 beginners in one year and offering specialized programs for about 7,625 experts in data and AI. The report by the World Economic Forum indicates that 75 percent of organizations across the world plan to adopt AI, and this is likely to create jobs, but also displacements. Despite the challenges that are likely to come with the adoption of AI, the Kingdom has the opportunity to mitigate them by reskilling its workforce for emerging roles in the modern world.
AI technologies are expected to enhance productivity in the country, through the automation of repetitive tasks, improving decision-making processes as well as optimizing supply chains. Research from the ITU says that AI is poised to boost global GDP by more than 16 percent by 2030. This is largely because of the implementation of automation and innovation. Thus, countries like Ƶ are positioned to utilize AI in various sectors, including financial services, logistics and even manufacturing. For instance, the use of AI technologies in logistics has the potential to reduce costs, and at the same time, improve delivery time.
The government has been working proactively to create a conducive environment for new technologies such as AI. Programs such as the Saudi Data and AI Authority, and the National Strategy for AI, highlight the Kingdom’s commitment to take advantage of AI, and position itself to rank among the top 10 global leaders in data and AI by 2030. The country has created better grounds for international investments by fostering innovation, placing Ƶ at the forefront of the global AI race, as evidenced by the $1.7 billion in total funds attracted by Saudi AI companies in 2023.
Whereas AI technologies present many opportunities for countries to foster their economic growth, some challenges cannot be overlooked. Thus, Ƶ must address these challenges to utilize the full potential of AI. One of the critical challenges has been job displacement, especially in the low-skilled sectors. Although this might be the case, the IMF indicates that AI’s impact on job displacement is not entirely negative. For example, by implementing automation of routine tasks, AI allows the human workforce to focus on high-end activities, which can help countries increase productivity.
AI has already proved to be a major economic driver for countries like Ƶ. As the Kingdom continues its journey toward economic diversification, AI technologies play a critical role. By creating new job opportunities, enhancing productivity and fostering innovation, AI is poised to increase the Kingdom’s GDP growth soon. However, to be a global leader in this revolutionary AI era, Ƶ must implement the right policies to allow better investments for a knowledge-based economy.
- Hassan M. Alzain is pursuing a master’s degree in environmental management at Yale University. He led the Environmental Science, Sustainability and Policy Group at Aramco’s Environmental Protection, and is experienced in areas such as sustainability reporting, climate policy, environmental technology and data assurance.
- Hamad S. Alshehab is pursuing a master’s degree in finance at London Business School. He led the Strategy, Finance & Governance at Aramco’s Innovation & Product Development Center (LAB7) and is experienced in areas including control systems, digital transformation, entrepreneurship and innovation.
