Middle East companies slow to act on AI despite high expectations

Businesses in the Middle East have been slow to properly embrace AI according to BCG, despite having high expectations for the technology. 

A new report from global strategy and management firm Boston Consulting Group has revealed that Middle East-based businesses have been especially slow to incorporate artificial intelligence into their offerings or processes, at just one in fourteen companies locally compared to the global average of close to one quarter – despite substantially higher levels of optimism for the technology in the region.

The data is drawn from an extensive recent global survey of more than 3,000 business executives worldwide (across 29 industries and 126 countries) conducted by BCG in conjunction with MIT Sloan Management Review, which examined sentiment and progress in relation to the adoption of AI – finding that 60 percent of business leaders overall considered the development of an AI strategy to be urgent for their organisations.While the initial survey report was released in September, a new report from BCG’s Middle East practice – co-authored by regional digital transformation lead Rami Mourtada and BCG strategist Akram Awad – has shone additional light on the Middle Eastern component of the survey, revealing that 60 percent of local executives consider AI to be an opportunity alone without risk, compared to just 50 percent globally.

In addition, while only a small percentage of global executives state a perceived substantial impact from AI on their businesses to date, almost a quarter of those in the Middle East believe the technology is already playing a large role. Yet, this positive local sentiment and early anecdotal evidence hasn’t however translated to action, with Middle East companies lagging their global counterparts in terms of implementation.

“A striking finding of the survey is that business adoption of AI is at a very early stage, with a clear disparity between expectations and actions. And this gap is significantly more prominent in the Middle East,” say the authors. One reason given for the disparity; only half of the surveyed executives in the region believed their organisations had a good understanding of AI’s technological requirements or its business and workplace implications.

Further, just 40 percent understood the costs required for products and services based on AI, while only just over half were across the skill and knowledge changes required for future AI adoptions – figures, according to the authors, which are comparatively very low; with a key barrier to adoption, they say, being an organisations’ ability to first develop an intuitive understanding of AI technology and how it can drive value.Yet, there may be also another element at play; complacency. A curious insight of the global survey was the decline in unbridled positivity from the previous survey, that is, the percentage of respondents who considered AI an opportunity without risk, with a six percentage point rise in those who believed it a mixed blessing. This, BCG contends, may be due to the dawning realisation that a potential advantage doubles as a risk if a competitor beats you to the punch.

Mourtada and Awad conclude that immediate action is required if Middle East businesses are to catch up with or surpass regional and global AI pioneers. “With AI fundamentally and steadily disrupting industries one by one, executives in the Middle East must start embracing AI in their most senior strategic discussions and quickly produce intuitive insights about AI and its requirements, potential, and impact for their businesses. This will equip them with the necessary tools to disrupt their own businesses with the power of AI—before others do.”