Over 3M jobs will be at risk in the GCC if not adapted to AI advancements: The time is now
Artificial intelligence is becoming an inseparable part of our daily lives, and its impact is reaching almost every segment of the economic wheel. This mega-influence is weighing heavily specifically on employees who are challenged by machines and risk losing their jobs. But in fact, the tech advancement could be tamed in a way to optimize human skills and labor efforts.
According to PwC’s global Artificial Intelligence study: ‘Exploiting the AI Revolution’, the potential contribution of AI to the global economy will peak to almost $16 trillion by 2030. In the Middle East, things have also started to heat up.
The region is expected to accrue two percent of the total global benefits of AI in 2030. This is equivalent to $320 billion. The largest gains are expected to accrue to Saudi Arabia where AI is expected to contribute over $135.2 billion in 2030 to the economy, equivalent to 12.4 percent of GDP. The UAE is expected to see the largest impact of close to 14 percent of its GDP in 2030. Both countries place within the top 50 countries in the world on the Global Innovation Index 2017 in terms of their ability to innovate and the outputs of their innovation.
According to Jan Peter Moore, associate partner at McKinsey & Company, the pace of evolution of AI in the MENA is affected by two major factors: First, the relative young demographics of most countries in the region and the access to expat labor at low wage rates. “This might hinder AI adoption when compared to other countries that are aging fast and where the adoption of automation technology is a necessity to address workforce shortages,” he told Wamda. Second, many countries in the MENA are investing in new technology as part of their ambitious strategies to diversify their economic model towards a knowledge economy.
Morgan Frank, research assistant at the Media Laboratory of the Massachusetts Institute of Technology (MIT) also believes emerging economies are focusing on transitioning from an extraction-based economy, such as oil extraction or agriculture, to a knowledge-based economy.
To put it in simple words, AI will increase the productivity of various industries including finance and tech, by cutting down the amount of labor needed for repetitive tasks. In turn, this should lead to increased returns on capital investment in these areas. Beyond economic growth, AI can also play a major role in improving life expectancy, reducing economic waste, and enabling smarter use of natural resources, for example by applications in preventive personalized healthcare, predictive maintenance in infrastructure and manufacturing, or smart metering in utilities, Moore added.
Gerard Gallagher, head of advisory at EY for the Middle East believes that the potential opportunities and benefits of AI are still underhyped, but they will eventually. “The appointment of the UAE Minister for Artificial Intelligence (AI) set off a lot of discussions (and excitement) on social media networks - not to mention substantial press coverage. This not only mainstreamed AI in way not done before but also amplified the conversations around AI. It’s a major signal that underlines the commitment to innovation in the country,” he said.
Opportunities behind risks
With the multiple benefits AI is promising, the scenery is not as bright in everybody’s minds.
According to the World Economic Forum (WEF), recent research found that concerns about innovation leading to higher unemployment is especially pronounced among business leaders in the MENA, given the region’s already high youth unemployment rates. Data published by the World Bank endorses this as youth unemployment in the Middle East stands at 21 percent and 25 percent in North Africa, figures that are higher than any other region in the world. The WEF’s Future of Jobs analysis found that, compared to 2015, 21 percent of core skills required across all occupations will be totally different by 2020 in the GCC, which poses high risks on current jobs, employees, and employers alike.
The ‘Empowering the GCC digital workforce: Building adaptable skills in the digital era’ report shows that a very high percentage of GCC nationals are now employed in sectors which are at high risk of disruption by new digital technologies. This particularly affects jobs in professional services, public administration, infrastructure and healthcare. While Kuwait shows the most risk with 91 percent of nationals employed in these sectors, UAE stands at 83 percent, followed by Saudi Arabia at 80 percent and Bahrain at 66 percent. “GCC countries must take leaps of efficiencies that are mainly enabled through digitization. To do so, they will need to build an adaptable and skilled digital workforce that can tackle this new technological wave head-on,” Ali Matar, head of LinkedIn Middle East and North Africa, told Wamda.
But, in fact, there is a brighter light at the end of the tunnel. Matar believes that despite the exponential impact of AI on jobs, human interaction is irreplaceable. According to LinkedIn’s annual ‘Global Recruiting Trends 2018’ report, 36 percent of professionals feel that AI is a top trend affecting how they go about hiring employees, but among professionals and employees, there is little concern that AI will take away jobs. “Most of them think it will not replace the parts of a job that require personal and emotional engagement,” he said.
WEF believes that if harnessed well, the adoption of this tech will help the region’s group of labor-abundant middle-income countries broaden their manufacturing base by expanding their pool of advanced manufacturing talent. It will also support the resource-rich Gulf countries to further diversify their economic activities, by reducing their dependence on oil and gas exports. It would also be an opportunity to the lowest-income countries to reduce fragility and increase stability through deeper integration of their local labor markets into regional supply chains and industry ecosystems.
Gallagher said that the biggest challenge goes beyond the technology: it’s about change management and the potential confusion over how AI is applied. “But we should all be reassured; AI can do a lot, but there’s also a lot it cannot do, and we cannot rely on it to deliver skepticism and judgment. Something that is our exclusive preserve.”
So, what are the new standards and norms to maintain an appealing job profile?
New skill sets, new jobs
According to LinkedIn and Strategy& report, the emerging trend coming out of the MENA region for the jobs market is ‘digital jobs’. By these we mean roles in the production, distribution, implementation, or servicing of ICT. The report shows that while digital jobs account for 5.4 percent of the EU’s total workforce, only 1.7 percent of the total GCC workforce are employed in similar roles. The report explains that in order to face the disruption digitization is imposing, countries should undertake the large-scale creation of digital jobs. Else, the lack of digital jobs will aggravate job shortage of 3.1 million posts for GCC nationals, across industries, by 2025.
About 60 percent of occupations have at least 30 percent of their activities that are automatable, so many low- to middle-skills jobs like technicians, clerks and service assistants are set to see major changes to their work requirements, Moore explained. The creation of most new jobs will likely happen at the intersection of new technologies and existing human work across industries, e.g. in the form of ‘translators’, ‘trainers’, or ‘implementers’ that interact with AI and other technologies to integrate it in new business processes, train both machines and human workers to interact productively, and scale up new emerging business models.
Thus, the top skills to watch out for are: Statistical analysis and data mining, public policy and international relations, and algorithm design, are the most in demand skills. “We expect these skills to remain high in demand this year. These jobs are an example of how digitization is changing how companies approach hiring and look at jobs,” Matar said. Skills pertaining to science, technology, engineering, and mathematics (STEM) and information, communication, and technology (ICT) in digital-related industries will be in demand, LinkedIn research shows.
Accordingly, the next wave of jobs will be shaped by the ‘Essential eight’ technologies: Blockchain, 3D printing, drones, virtual reality, augmented reality, the Internet of Things, robotics, and artificial intelligence.
According to LinkedIn’s report, employers in the MENA are now embracing four key trends: Diversity, new interviewing tools, data, and Artificial Intelligence. 80 percent of talent acquisition leaders and hiring managers in the MENA say that diversity is the top trend affecting how they hire. Companies are prioritizing diversity – gender, race, ethnicity, age, education, etcetera to improve culture and boost financial performance, as they are increasingly realizing that diverse teams are more productive, more innovative, and more engaged. More than half (58 percent) of hiring managers feel that interviewing innovations are ‘very’ or ‘extremely’ important to the future of hiring. Innovations such as job auditions, soft skills tests, meeting candidates in casual settings, virtual reality assessments and video interviews are gaining traction. Matar concludes that “even as AI merges and truly starts powering a Fourth Industrial Revolution, companies will still need people — people to persuade and negotiate, to understand business needs, and to build communities and cultures.” He added: “Paradoxically, the more you use the technology, the more you can invest in the human side of the job.
Other obstacles to overcome
Besides jobs, other obstacles face the deployment of AI globally and in the region. According to Frank, the biggest one would be regulations regarding ethical concerns, about decision transparency, and new methods for enforcing regulation. It is much more elaborate and complex than granting Sophia the robot, the KSA citizenship, as it touches broader aspects of people’s lives. Frank explained: “If an autonomous vehicle performs a traffic violation or is involved in an accident, then society will need to agree on how to assign responsibility and blame for the situation. Specifically, is the vehicle’s owner, the vehicle’s manufacturer, the vehicle’s programmer, and/or the vehicle itself responsible for regulatory infractions? Complicating the matter further, modern machine learning techniques are often seen as opaque which makes it difficult to understand how an algorithm reaches a final decision. Since algorithms often learn from human data, undesirable human biases may become part of the algorithmic decision making.” To sum it up, new methods to enforce regulations on AI and to certify that algorithms are ready for use in the real-world are needed. As a specific example of this, Germany recently released guidelines pertaining to autonomous driving. The report lists 20 guidelines for the motor industry to consider in the development of any automated driving systems. As per these guidelines, if an accident cannot be avoided, human safety must take precedence over animals and property. The software must try to avoid a collision altogether, but if that's not possible, it should take the action that does least harm to people.
Other than the moral part, education is another core element to revisit, as it must also evolve accordingly. According to Frank, societies need to invest in their education infrastructure. “Labor demands are shifting at an increasing rate and returns on higher education may not be keeping pace. Societies that can best prepare workers to work with AI, rather than competing with AI, will yield the most benefit. For emerging markets, this may mean continued interaction with top educational institutions and industries abroad while local educational institutions are strengthened,” he said. Many universities in the region have started already adopting this state of mind. The British University in Dubai has added AI to its computer science specialization for example.
The governments’ role
With the dramatic shifts AI are imposing, governments must be present with active role to create matching regulations and to organize the basics. According to Moore, it is a no brainer that the emergence of AI would be causing more problems to MENA markets and governments, which are more susceptible to shocks. “We believe that in the long run the benefits can outweigh the short-term challenges, but it requires joint efforts by all stakeholders, including each individual to prepare for this new world of work. I would tend to agree here with Daniela Rus, the MIT Director of the Center for Artificial Intelligence, who in her talk at the World Government Summit quoted President John F. Kennedy, who said already in 1962 that “if men have the talent to invent new machines that put men out of work, they have the talent to put those men back to work.” McKinsey highlights five imperatives for governments to manage this major transition: Embrace AI and automation without hesitation, as attempts to slow down the speed of technological progress would likely be futile and counterproductive in a globalized competitive economy.Equip workers with the right skills, including more, and more timely investments into the human skills that complement new automation technology. Focus on augmented-labor opportunities, and increasing opportunities for creation of new jobs from the implementation and customization of new technologies. Innovate and capitalize on new market opportunities at the same pace that human tasks are being replaced, and take advantage of technological disruption to build new competitive advantages in reconfigured global value chains, and last reinvest AI-driven productivity gains in as many economic sectors as possible, and create incentives that gains are reinvested into the local and regional communities most affected by the transition in order to boost demand for new labor.
AI to foster entrepreneurship
With the various risks associated with classic jobs and employment opportunities, and the vast potentials unleashed with entrepreneurs and SMEs, the link between AI and entrepreneurship seems to get tighter. Matar said: “We think that as Artificial Intelligence gains steam, driving innovation in varied fields such as medicine, agriculture and education, entrepreneurs have a huge opportunity to remake entire industries - by creating new class of jobs and engaging with startups. AI is the future, but so is the human touch. AI is a huge step forward for talent acquisition, but it will never fully automate it. Companies still need people — people to persuade and negotiate, to understand business needs, and to build communities and cultures.”
MIT’s Frank shares the same thoughts, “because new technologies tend to increase possibilities. This, in turn, leads to more innovation.
Frank explained that tech improvements tend to yield productivity and efficiency gains in existing areas of work. “The new opportunities afforded by improvement in AI can yield new employment opportunities, and improvement in AI can decrease labor demand in traditional areas due to efficiency gains; it is therefore essential for communities to be mindful of these two forces moving forward.”
According to Gallagher, non-adoption of the advancements AI may bring would put laggards in a tricky situation. He explained that adopting AI will require patience and a willingness to learn, and will be complex and lengthy, so firms need to start now. “Many early projects will have a low return on investment (ROI) and a limited impact – they primarily provide learning opportunities. But that learning is essential and the first step on a transformational journey that will touch every business,” he said. He added that most organizations haven’t yet started exploiting the potential of AI. In fact, it is not the lack of talent that’s holding back these companies from having the best out of AI. “It’s actually a lack of understanding of what’s possible – particularly at the top of larger enterprise,” he said.
Thus, more entreprise-specific AI products must be developed, to put the tech and scientific innovation into context. “We need to see more input and influence from business-driven individuals who care about creating something with value or who have a burning problem they need to solve,” Gallagher thinks.