Nearly half of all Middle East jobs could be automated, says McKinsey

19 February 2018

Nearly half of all existing jobs in the Middle East could be automated today according to global management consulting firm McKinsey & Company.

In a report on the future of jobs in the Middle East, the strategy and management consulting giants McKinsey have contended that 45% of the jobs currently performed in the region today could be automated with existing technologies. Yet, although staggering, the figure is below the estimated 50% global average of jobs which could be subject to technical automation.

The sample study examined six nations in the region, consisting of Bahrain, Egypt, Oman, Kuwait, Saudi Arabia and the UAE, representing a combined population of 147 million people and a GDP upwards of $1.5 trillion on 2016 figures, and covers numerous industries (testing 18 performance capabilities for 2,000 work ‘activities’ across 800 occupations), including those with the highest potential for automation such as transportation, manufacturing and warehousing.

In total, the 45% of jobs which could be currently automated in the Middle East translates to in just the six nations studied more than 20 million full-time employment positions and over $366 billion in wages. In overall terms, there’s little variation between the countries examined as to the percentage of automatable current activates, with Oman and Saudi Arabia at the lower end on 41% and Egypt registering the largest share at 48% of all jobs.IN THE MIDDLE EAST, 20.8 MILLION FTES AND $366.6 BILLION IN WAGES ARE ASSOCIATED WITH ACTIVITIES WHICH ARE ALREADY AUTOMATABLE TODAYBut, with differing population numbers, economies, and the variance in predominant sectors specific to each country, the breakdown of potentially eliminated positions and income savings demonstrates a broad divergence in ultimate bearing – with the report noting that the relative labour force and wage levels are the major determining factors in the distribution of economic impact.

For example, of the roughly 20 million jobs under threat, nearly 12 million are located in Egypt, while Bahrain registers just 300,000 of the same. And yet, while 4.5 million of the jobs are attributed to Saudi Arabia, the associated wages for the country clock in at over $146 billion, compared to just $88.8 million for Egypt at nearly three times the number of jobs. An even greater demonstration of the variance is with the UAE, accounting for just 2.7 million jobs but over $80 million of the total regional savings figure to reflect the country’s far higher average wage structure.

Also, while the variation in overall percentages may seem slight, especially considering the difference in ‘sectorial and occupational make-up’ between the countries, the analysis works on an assumptive model that all of the countries featured in the study will have the same access to currently available technology – which, the report argues, is more realistic than it sounds in the sense of the increased accessibility to digitalisation tools.TECHNICAL POTENTIAL FOR AUTOMATION BY JOB ZONES1 ACROSS MIDDLE EAST COUNTRIESBy sector, however, the report highlights the factors behind the variable regional differences, helping to “illustrate the fact that a much higher share of the automation potential in the region is concentrated in Egypt compared to some of the Gulf economies, driven by its larger absolute and relative workforce footprint for example in manufacturing or agriculture.”

“Sectors intensive in routine tasks like manufacturing, transportation and warehousing, as well as the information sector exhibit technical automation potential in the region larger than 50%, while sectors which are more dependent on human interaction, creative, and non-routine activities and services like arts, entertainment and recreation, healthcare and education display below average automation potential of 29 to 37 percent,” the report states.

As an effect, the potential disruption of automation technology is concentrated mostly in the areas of low to medium levels of education and experience. For the workforce featuring high school and some experience or less than high school, the range of positions subject to potential automation sits between 50% to 55%, whereas the possibility shrinks to ~21% for employees with a bachelors or above, indicating that higher education still seems for now the best measure to secure work in the future jobs' drives the creation of many more jobs than it destroysThe question the paper asks, however, is “whether the skill bias in favour of high-skilled employees will continue to persist, accelerate or potentially even reverse with the next set of emerging technologies over the coming decades?” There is no clear answer as yet, but the argument often made is that technology is a driver of job creation rather than a threat to employment levels, and that losses in certain sectors will lead to far greater jobs opening up elsewhere. A study by the consulting firm into the emergence of personal computing concludes a net job creation of over 15 million jobs in the US since 1970 – with very few coming from the computer manufacturing or supply industry itself.

The report concludes, “The advent of the new age of automation is marked by many uncertainties. While the potential for the substitution of human labour is rapidly expanding, new opportunities arise for the creation of future jobs based on potential gains in productivity and performance across industries – both globally, and in the Middle East… The stakes are high, as the boon of workforce automation could not just lie in overcoming some of the long-standing issues of labor market segmentation, but also in unlocking new sources of innovation and growth in an economy that combines man and machines in new ways.”

Construction consultancy Drees & Sommer launches innovation hub in Dubai

18 April 2019

The Middle East branch of international construction and real estate consultancy Drees & Sommer has launched a new innovation hub in Dubai

Following the appointment of ex-Ramboll exec Abdulmajid Karanouhas as its Head of Interdisciplinary Design & Innovation earlier this year to spearhead the firm’s R&D drive in the Middle East, the local branch of German-origin construction and real estate consultancy Drees & Sommer has now launched a new innovation hub in Dubai – designed as a collaborative environment to serve both external start-ups and its own employees.

“It has always been part of our corporate culture to promote our own ideas and initiatives,” said Drees & Sommer executive board member Steffen Szeidl. “Increasingly, digital transformation and our clients are calling for completely new and disruptive business models. The Innovation Centre is one of our responses to these challenges. All 3,200 staff members can upload their ideas virtually.”

According to Szeidl, from there, promising concepts and solutions addressing identified market gaps in areas such as planning, construction and operations will be developed, funded and localised for any market which sees the potential. He continues: “Adding the Dubai innovation hub emphasises our status as a global innovation company by being one of the few companies doing R&D in this region.”Construction consultancy Drees & Sommer launches innovation hub in DubaiLocally established in 2003, Drees & Sommer was founded close to 50 years ago in Stuttgart, since growing to include some 40 offices worldwide, with its global headcount of 3,200 professionals generating revenues upwards of $430 million in 2017. The firm’s offerings span the gamut of real estate and infrastructure requirements, delivered according to its ‘blue way’, which takes into account economic, functionality, and ecological aspects together.

This, for Drees & Sommer, is an important point in the regional context.  “There is a huge demand in this market for contextual solutions as most models and systems are imported from abroad with little to no adaptation to the local culture, economy, and environment,” explains Karanouh. “As a consequence of this approach, we are facing major challenges related to user-comfort, efficiency, manageability, durability, and overall sustainability and feasibility of the built environment in the region.”

Accordingly, the firm has tailored each of its innovation hubs rolled out so far across the world to drive specific initiatives. In Aachen, Germany’s ‘Silicon Valley’, for example, there is a focus on customised smart buildings, IoT product testing and cyber-security, while the firm’s Stuttgart hub focuses on start-ups and processes and its Berlin one on smart cities and smart quarters. The Netherlands hub meanwhile focuses on wellbeing and sustainable innovation.

Karanouh: “The innovation hub brings together specialists of various disciplines from across the industry as a single interdisciplinary team that advises clients from early feasibility studies all the way to operation and revitalisation of buildings to maximise comfort, efficiency, sustainability, return of investment and overall value. The platform allows for brainstorming ideas, identifying market gaps and needs, adapting existing solutions or/and developing new solutions tailored to the local market and environment.”