Wider AI usage to boost UAE's digital economy, AI minister says

Widespread adoption of artificial intelligence will boost the digital economy in the UAE, according to Omar bin Sultan Al Olama, Minister of State for AI, digital economy and remote work applications.

“We are working a lot on computer power and AI systems and infrastructure in the UAE … this is going to improve our digital economy,” Mr Al Olama said in an interview with CNN.

An uptick in the digital economy will also lead to new jobs in the Emirates, he added.

“If we actually improve and new jobs are created … new industries are created … we are not going to just cannibalise from the traditional economy,” Mr Al Olama said.

The UAE, the Arab world's second-largest economy, is projected to benefit the most in the region from AI adoption. The technology is expected to contribute up to 14 per cent to the country’s gross domestic product – equivalent to Dh352.5 billion – by 2030, according to a report by consultancy PwC.

The UAE will be followed by Saudi Arabia, where AI is forecast to add 12.4 per cent to GDP.

Mr Al Olama said the UAE government is working to ensure that digital economy does not have an adverse impact on current jobs or lead to a massive skills gap.

AI spending is predicted to increase at a compound annual growth rate of 19 per cent in MEA till 2023. EPA

“This is the role of [the] government. We need to think about deploying AI in a way … [that] provides value and has the least number of jobs lost,” he added.

While deploying AI technologies and applications, the UAE government considers various factors such as its future impact, number of jobs that are generated and cost savings that can be reinvested in reskilling people, said Mr Al Olama, who was appointed as the country’s first AI minister in 2017.

“Governments exist to serve the people … to provide better livelihoods and to ensure the future is better … not just to deploy technologies for the sake of deploying,” he added.

Globally, Covid-19 is accelerating digitisation, especially in areas such as payments and retail.

According to a new survey conducted by YouGov, six out of 10 people in the UAE are in favour of the country’s economy becoming cashless. Such a shift comes as the pandemic spurred demand for contactless payments.

Going grey? A stylist's advice

If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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