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The UAE is on track to double the contribution of its digital economy to GDP from 9.7% to 19.4% within 10 years and is expected to spend $20 billion on technology. -Shutterstock
The Middle East and Africa region will witness the fastest growing region in the world for AI spending, driven by the UAE and Saudi Arabia, at a CAGR of 29.7% over 2022-2026, reaching $6.4 billion by 2026. dynamic economy.
Spending on artificial intelligence in the Middle East and Africa region (MEA), including Israel, will reach $3 billion by 2023, accounting for just 2.0% of the global total of $151.4 billion, according to the latest forecast from the International Data Corporation.
The UAE is expected to double the contribution of its digital economy to GDP from 9.7 percent to 19.4 percent within 10 years, and is expected to invest $20 billion in technologies such as IT, artificial intelligence, robotics and blockchain in the next three years, according to Boston Consulting Group A recent report by the group.
“The rapid adoption of cloud and digital transformation in MEA will result in AI being incorporated into many different products and solutions,” said Manish Ranjan, senior program manager, MEA Software, Cloud and IT Services, IDC.
Organizations in the region are investing in AI technologies and related software and services to improve efficiency through automation and contribute to a more agile operating environment, he said. “The impact of the pandemic is driving further spending related to AI/ML adoption, especially in banking and finance, manufacturing, trade, healthcare and government verticals.”
Regarding the economic impact of AI in the Middle East, PwC predicts that the region is expected to generate $320 billion in benefits in 2030, accounting for 2.0% of the estimated total global AI benefits of $15.7 trillion.
In absolute terms, Saudi Arabia is projected to gain the most, with AI expected to contribute more than $135.2 billion to the economy by 2030, equivalent to 12.4% of GDP. In relative terms, the UAE is expected to suffer the most, at close to 14% of GDP in 2030, according to PwC.
IDC’s Worldwide AI Spending Guide states that by 2023, banking, retail, and federal/central government will be the largest AI spenders in the MEA region, followed by discrete manufacturing. “By 2023, these four industries will account for nearly half (44%) of the region’s total AI spending. However, IDC expects professional services and transportation to be the fastest-growing industries over the five-year forecast period, each with a CAGR of The rates were 36.4% and 33.9% respectively.”
Ranjan said: “As businesses increasingly invest in AI and analytics and business intelligence (ABI)-based solutions to enhance and extend their customer experience, build digital capabilities and drive innovation, AI is gaining momentum in the region. Growth looks very promising.”
As the region increasingly adopts AI, he said there will be many challenges, not the least of which is a lack of skilled resources such as data scientists, data engineers and AI modelers. “However, there are several initiatives in the region aimed at upskilling local talent, with public and private sector organizations forming partnerships to facilitate AI and ML-specific learning,” Ranjan said.
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