Overview of the approach
Our approach seeks to quantify the total economic impact of artificial intelligence on the economies of 7 countries in the Middle East (Egypt, UAE, Saudi Arabia, and four countries have been grouped: Bahrain, Kuwait, Oman and Qatar) via productivity gains and consumption side impacts between now and 2030.
We have completed a number of stages of analysis in order to estimate the “first-round” impacts on jobs, productivity and product enhancements that have been inputted into our dynamic economic model in order to estimate the future size of the AI prize.
- On the production side, we focus on AI’s impact on labour productivity through automation. This required estimating the marginal impact of AI on productivity, the scale of automation expected to take place, the amount of AI replacing human labour and the amount of AI augmenting human labour for every industry in the Middle East between now and 2030.
- On the consumption side, we focus on AI’s impact on product enhancements which include increased quality, personalisation (i.e. product variety), as well as increased time-available for leisure or work.
We have used a dynamic economic model to evaluate the “net” impact of each channel on GDP and the economies as a whole.
Our results estimate the upwards pressure on GDP as a result of AI only, under the ceteris paribus assumption. Our results may not be directly reflected in future economic growth figures, as there will be many positive or negative forces that either amplify or cancel out the potential effects of AI (e.g. shifts in global trade policy, financial booms and busts, major commodity price changes, geopolitical shocks etc.).
What is AI?
In our broad definition, AI is a collective term for computer systems that can sense their environment, think, learn, and take action in response to what they’re sensing and their objectives.
Forms of AI in use today include digital assistants, chatbots and machine learning amongst others. In the table, we discuss the types of AI which include:
Assisted intelligence: Helping people to perform tasks faster and better.
Automated intelligence: Automation of manual/cognitive and routine/non-routine
Augmented intelligence: Helping people to make better decisions.
Autonomous intelligence: Automating decision making processes without human
As humans and machines collaborate more closely, and AI innovations come out of the research lab and into the mainstream, the transformational possibilities are infinite.