Economic growth and a continued digitisation push mean the UAE will probably need to add 1 million workers by 2030, according to a new skills forecast report.
The analysis, conducted by enterprise software company ServiceNow and education company Pearson, said the UAE's affinity for technology, artificial intelligence and its well-known push for the digital transformation of services will help to create jobs in manufacturing, education and retail.
“This 12.1 per cent increase in the human workforce represents one of the highest percentage increases among the markets studied, compared to projected growth in major economies such as the US (2.1 per cent), the UK (2.8 per cent), and India (10.6 per cent),” a news release from ServiceNow highlighting the report read.
Finance, health care, energy and utilities sectors will also see a boost, the analysis added.
The findings of the report, which looked at the UAE, Saudi Arabia, India, Australia, Canada, the UK, the US, Germany and Japan, run contrary to many of the prevailing sentiments about AI potentially disrupting the labour market to the detriment of overall economic growth.
William O’Neill, GCC vice president at ServiceNow, reflected on the economic and employment projections.
“The future of work depends on collaboration between people and AI, and it’s a future that’s hiring now,” Mr O’Neill said, pointing out the need for upskilling, which in turn, could boost growth amid continued AI investment.
“What we are seeing in the UAE, as well as in nearly every other country surveyed, is that AI augmentation will be central to capturing the next wave of economic growth,” he added.
In terms of technology roles in the UAE, ServiceNow and Pearson's report said that by 2030 “organisations will require more than 91,000 additional technology specialists” and that other in-demand roles will revolve around search marketing strategy, programming and computer systems analysis.
In recent years, the UAE has pushed to be an AI leader as it diversifies its economy away from hydrocarbons.
The country’s affinity for research into the technology has resulted in the establishment of start-ups, partnerships and investments from industry leaders including Microsoft, Nvidia and OpenAI.
The UAE has also teamed up with the US to develop an AI campus, which will include 5GW of capacity for AI data centres, in Abu Dhabi.
At first glance, the workforce report may appear not to bode well for Germany and Japan, which project a workforce loss, but ServiceNow says other factors beyond technology and AI are at play.
“Overall, eight out of the 10 countries we studied will need additional workers to support their projected economic growth,” the report read.
“The exceptions are Germany and Japan, where we forecast workforce shrinkage due to demographic shifts as well as slower job creation related to their modest growth and relatively high tech adoption rates.”
Debate continues to rage in various economic, technology and organised labour circles about the impacts AI might have on employment.
Those debates have caused a shift in public sentiment on AI and the technology sector overall.
In the US, a recent poll from the Pew Research Centre showed an increasing chasm between experts and the general public in enthusiasm for AI.
Technology experts surveyed by Pew, however, were significantly more likely – 56 per cent compared with 17 per cent – than the average American to say that AI would have a “very or somewhat positive” impact on society over the next 20 years.
ServiceNow and Pearson's report briefly touches on the negative impacts of AI development, showing that cumulatively among the countries focused on in their report, roles in the finance sector could see the most disruption from “agentic AI”.
Broadly speaking, agentic AI is defined as a way to use technology to automate complex decision-making tasks usually performed by humans.
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TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
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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.”
