Gen AI is driving Engine 2 growth and innovation, say Bain & Company experts
The rapid rise of Generative AI – along with more advanced technologies emerging in its wake, such as Agentic AI – is becoming a powerful driver of business growth and model innovation alongside traditional operating models, according to a new insight paper from Bain & Company.
Amid a rapidly shifting global landscape defined by geopolitical uncertainty, environmental change, and accelerating technological disruption, one transformation stands above the rest: the rise of Generative AI and its evolution into agentic systems.
In its latest insight paper, Bain & Company explores how Generative AI is powering the next engines of business growth. The firm highlights how companies that pair Gen AI-driven innovation with bold ‘Engine 2’ strategies – creating new business models alongside reinvented cores – are emerging as the true architects of resilience and future competitiveness.
Engine 2 strategies are a business concept where companies develop a new, separate growth engine to supplement or eventually replace their core business (‘Engine 1’) as it matures or declines. These strategies focus on innovation, new markets, and future growth by investing in creative, experimental, and agile ventures that are distinct from the current operations, such as Amazon’s expansion into cloud computing with AWS.
“Generative AI is creating entirely new ways of doing business while reshaping existing models at their core. True innovation now means balancing both, building on what works and exploring what’s next,” said Sami Abdul Rahman, Partner at Bain & Company. “Organizations that embrace these Engine 2 strategies will be best positioned to capture growth while redefining their industries.”
Research from the global strategy consulting firm found that around two thirds (67%) of the world’s top 100 companies are Engine 2 innovators. This dynamic is especially visible in the Gulf Cooperation Council (GCC).
In Saudi Arabia, almost 75% of government entities score at or above “proficient” on AI readiness indices, with over 40% actively experimenting today, many already reporting improved service delivery. On the private sector side, the signals are even stronger: 95% of Saudi companies view AI as crucial for institutional success, compared with 87% globally.
Moreover, 92% of CEOs in the Kingdom believe Generative AI will be systematically embedded within their platforms within three years, far outpacing the global average of 78%.
“AI adoption in the GCC is moving faster than in many other regions, reflecting both government vision and private sector ambition. The dual effect of reinventing existing business models while simultaneously creating new ones is where Engine 2 opportunities become most powerful. The GCC has the potential to set global benchmarks for how to lead through disruption,” said Jack Nolan, Senior Manager at Bain & Company.
Scaling Engine 2
The main conclusion of Bain’s insight paper is clear: Generative AI is enabling entirely new business models while redefining established ones. In fact, 56% of global executives expect GenAI to significantly alter product differentiation in their industries, demonstrating that innovation today is as much about reimagining the core as it is about creating the new.
Those that diversify into adjacencies, reimagine their core, and place AI at the heart of their strategies will be best positioned to thrive.
“The decade ahead will reward those who act with intent, who create their own clarity rather than waiting for it to emerge,” said Nolan. “For leaders across the GCC, this means moving decisively to embed AI, scale Engine 2 opportunities, and invest in the capabilities that will define the future of competitiveness.”
