Generative AI (GenAI) is set to deliver $23 bn of economic gains to the GCC, according to Strategy& Middle East.
Saudi and the UAE will benefit the most, with $17.5 bn in economic gains annually. The forecast also estimates economic benefits for Qatar and Kuwait, with $2.6 bn and $1.6 bn, respectively. Oman’s economy will gain $1.3 bn, while Kuwait stands to benefit with $600 mn.
According to Strategy& Middle East, the GCC region could realize approximately $9.9 of economic growth for every $1 invested in GenAI.
“These statistics underline the extraordinary potential of Generative AI to revolutionize the Middle East’s business landscape. Executives who seize this opportunity without delay can gain a substantial competitive advantage, while companies that merely watch risk falling behind,” commented Tony Karam, Partner at Strategy& Middle East.
GenAI across industries
When it comes to specific sectors, Strategy& Middle East says media and entertainment industry has the greatest potential for transformation. The introduction of GenAI will deliver $8.5 bn worth of economic gains, revolutionizing content creation, consumption, and distribution.
The healthcare sector closely follows, with an estimated economic gain of $3.8 bn. GenAI is helping revolutionize patient care, diagnosis, and treatment. It is also enhancing the overall quality and efficiency of healthcare services.
Banking and financial services stand to gain some $3.5 bn, as GenAI drives automation and efficiency in operations, risk management, and customer service.
Similarly, the IT and telecommunications sector is set to benefit with $2.9 bn in economic gains, through GenAI-powered innovations.
The broader impact of GenAI transcends industries, promising a seismic shift in business functions encompassing sales, marketing, customer service, and compliance.
Read: The magic behind the machine – Artificial intelligence in the spotlight
Limitations and maximizing value
While GenAI offers impressive capabilities, it also has inherent limitations. Currently, existing GenAI models are not suitable for intricate numerical analysis or critical decision-making processes.
Additionally, there are ethical concerns regarding bias, unethical usage, and significant computational costs.
Furthermore, the mismanagement of GenAI could result in misleading or harmful outputs. This emphasizes the need for strategic deployment to achieve maximum impact.
To make the most of the GenAI opportunity, business leaders should carefully select use cases that align with their strategic goals and provide tangible value. Strategy& Middle East recommends achieving early and small wins while avoiding costly and risky “big bang” approaches.
Concentrating on a few key use cases is advisable, considering organizational maturity, data availability, and the regulatory environment.
Competitive advantage
Strategy& Middle East’s findings were derived from a comprehensive large-scale dynamic economic model, which shed light on the net effect of AI rather than simply predicting future economic growth.
Developed using the Global Trade Analysis Project (GTAP) database, the findings offer intricate insights into the size and interdependencies of various economic sectors across 140 countries.
The results focus on the economic impact of AI, highlighting its potential effects. However, it’s important to note that these effects may not directly translate into future economic growth figures.
The net impact of AI can be influenced by a multitude of factors, including shifts in global trade policies, financial fluctuations, commodity price changes, geopolitical shocks, and more.
For Strategy& Middle East, GenAI represents more than just a tech buzzword. It is a revolutionary force that can redefine the business landscape. Organizations and businesses that embrace GenAI’s true potential are expected to have a strategic competitive advantage.
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