Some 61% of Middle East executives anticipate over 10% productivity gains from AI and GenAI in 2024.

This is in contrast to the global situation where 66% of global leaders report dissatisfaction or ambivalence regarding their AI and GenAI progress, a Boston Consulting Group (BCG) survey found.

54% of Middle Eastern Executives indicate that their AI/GenAI capabilities are currently focused on practical application, going beyond limited experimentation to encompass more comprehensive and scaled initiatives.

Data as a key asset

"The Middle East is making significant progress in the field of GenAI by developing essential AI capabilities and recognising the importance of data as a key asset for immediate and strategic value," says David Panhans, Managing Director and Senior Partner at Boston Consulting Group. "The region's focus on leveraging data for AI and GenAI solutions to various business challenges, combined with a digital-first, data-driven mindset, sets the region apart in GenAI and enables substantial productivity gains and innovation."

The BCG AI Radar: From Potential to Profit with GenAI report is based on a survey of 1,406 C-level executives in 50 markets and 14 industries. Seventy-one percent of executives surveyed say they plan to increase tech investments in 2024—an 11-point jump from 2023—and even more (85%) plan to increase their spending on AI and GenAI.

In workforce development, the Middle East is leading in upskilling efforts related to GenAI. However, despite this progress, there is room for improvement, as currently, only 11% of Middle East executives report that more than a quarter of their workers have received training in GenAI tools. This indicates a focused yet ongoing effort in the region to equip the workforce with the necessary skills for the AI landscape.

Building necessary AI muscle

"As the Middle East continues to excel in AI and GenAI, a key focus is on building the necessary AI muscle to support and advance this area," states Mark Zaleski, Managing Director and Partner at BCG X. "Our region is committed to advancing technology and developing our workforce through comprehensive change management, starting with leadership. We have made significant progress in training our workforce in GenAI, but the journey towards achieving comprehensive AI proficiency is ongoing. We believe our commitment to developing technology and human capital is critical."

This is not the time to wait and see

Although a small percentage of companies are already reaping the rewards of AI and GenAI, others are either playing catch up or standing on the sidelines. More than 60% of executives surveyed say their firms are still waiting to see how AI-specific regulations develop, and just 6% of companies have trained more than 25% of their people on GenAI tools so far.

According to the report, “winning” companies acknowledge GenAI’s permanence and recognise its potential for both enhanced productivity and topline growth. It outlines several characteristics that set the winners apart from observers, including:

•Winners invest for productivity and top-line growth. Organisations that plan to invest more than $50 million in AI and GenAI this year are 1.3 times more likely to see cost savings in 2024—and 1.5 times more likely to achieve more than 10% in cost savings.

•Winners are systematically upskilling. Twenty-one percent of organisations spending upward of $50 million on AI and GenAI this year have already trained more than a quarter of their people.

•Winners are vigilant about GenAI cost of use. Cost of use, which has serious long-term implications, is not commanding the attention it should. Only 19% of those surveyed consider cost the top concern when choosing an AI and GenAI solution.

•Winners build intentional relationships. Only 3% of executives consider preexisting partnerships a priority when looking for AI solutions.

•Winners implement responsible AI (RAI) principles. Of the companies surveyed that are investing more than $50 million in AI in 2024, 27% put the CEO in charge of their RAI strategy (versus 14% overall).

"In the Middle East, AI can redefine company operations, creating significant value for individual businesses and the broader economies. This shift towards AI-driven transformation demands a ‘Value-first’ approach and ’Tech + Change Management’ mindset to succeed across various sectors," says Robert Xu, Managing Director and Partner at BCG X. "Integrating GenAI into our business ecosystems will not only improve operational efficiencies and bring topline impact but also encourage the development of new business models, fostering economic growth and regional development."--TradeArabia News Service

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