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Technology the New Fuel of GCC Growth

Noiranjana Kashyap

16 October 2023

The Gulf Cooperation Council has been synonymous with the world oil markets for decades. However, in recent years, there has been a concerted effort by the states in the grouping to diversify their economies and reduce dependency on oil. Investments in high technology and STEM education has quickly developed as a major marker of this shift.

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The countries of West Asia have historically cultivated scientific temper and are responsible for making significant advances in fields like mathematics, astronomy, medicine, pharmacology, optics, chemistry and physics. Much of this knowledge was transmitted to the Europeans, helping them emerge from the Dark Ages into the Renaissance. However, throughout the medieval and modern periods, technological developments in Europe that spurred the industrial revolution helped countries like Portugal, Denmark, France, and the UK to dominate the Arab world, since no existing Arab technologies could compete with such innovations.


However, decolonization and the discovery of oil in the Gulf monarchies gave them a chance to become global actors and geopolitical mavericks not just in West Asia but across the globe. The nationalization of oil fields by state governments in the 1970s transformed these states into extremely influential, wealthy and geopolitically powerful entities. Yet, these hydrocarbon resources, namely oil and gas, are non-renewable, and the chances of them running out are inevitable in the long run. Accompanied by a decreasing global demand for oil, this has led these countries to experiment with alternative, renewable sources of energy.


Secondly, the need to generate employment opportunities for the upcoming generations has forced the governments of the Gulf countries to consider shifting their focus to more non-oil sectors, chiefly on entrepreneurial and technological dimensions that could help produce a skilled workforce. Thirdly, climate change is also encouraging this transition from hydrocarbons to green energy technologies. With the developed world focused on finding alternatives to hydrocarbons, the Gulf states have little option than to develop non-oil sector economies and greener technologies for maintaining their revenue stream. Fourthly, the hunt for security in a ‘shatterbelt’ region and the relevance of science and technology to ensure national defence has seen states like the UAE aiming to become militarily self-sufficient to protect themselves during conflicts and reduce dependency.


Due to these reasons, the Gulf countries are now diversifying their efforts to bring about rapid development in non-oil sectors, chiefly in the technology sector. With the private sector starting to play a significant role in the Gulf Cooperation Council (GCC) states, its business leaders have realised digitalisation as a way to make their internal operations and decision-making more efficient and turn it into a potential driver of revenue growth. The Information and Communications Technology (ICT) sector, which incorporates some of the most advanced technologies like Artificial Intelligence (AI), Internet of Things (IoT), 5G, Big data etc., form the top of the list in this regard.


Growing ICT Base


Artificial Intelligence (AI) is at the top of the ICT sector. In addition to powering the Gulf tech companies' search and recommendation engines, AI is used to efficiently manage vast estates of IT infrastructure provided to cloud-computing customers. AI is also used as a tool for a whole range of analytic applications such as fraud detection, voice detection, and cybersecurity. Some examples of AI tech employed in Gulf countries include, in the UAE, Searchie offers talent acquisition software that uses AI to screen and shortlist candidates based on video interviews. Searchie had become especially significant during the pandemic. In Bahrain, platforms such as Dalooni integrates AI into consumer goods and retail services to streamline customer journeys and personalize their experiences, predict demand for specific products, increase the efficiency of delivery mechanisms, etc. Meanwhile, Saudi Arabia has even invested over $135 billion in AI in recent years. Estimates indicate that that the GCC states together could save around $7 billion per year by automating routine tasks with AI machine learning, especially in the government sector.


The Internet of Things (IoT) is another ICT frontrunner in advanced technologies. It offers companies the platform to collect data streaming from their devices and machines and analyze that data to turn it into actionable business. The Saudi-based Averos is a company that offers indoor positioning and tracking services using IoT-connected devices. These devices have been integrated into Riyadh's airport app to help passengers locate their gates. IoT tech has also been incorporated in hospitals of several Gulf states, mainly UAE, to track expensive machinery and equipment and for screening containers and trucks in Bahrain. It is also used extensively in the media and entertainment sector, especially for smart TVs, gaming consoles, etc., that provide insights into customer behaviours.


Data and Analytics has also attracted massive investments. with a considerable push to leverage the technology in retail and e-commerce. Large companies in the GCC states draw from data generated from IoT-connected devices, payment systems and AR to optimize product positioning and consumer experience. These insights are employed to track customer behaviour, monitor website traffic, forecast demand and adjust prices.


5G mobile networks are another frontier technology that the GCC states, particularly Saudi Arabia, UAE, Bahrain, and Qatar, have been investing heavily in recent years. This next-gen wireless network promises faster browsing speeds, reduced network latency and the capacity to connect multiple devices without performance degradation. The main aim has been to utilise the technology to boost the gaming industry, healthcare and automotive industries, along with building innovative and connected cities.


Defence, Space and Green Energy: Emerging Focus Areas


Countries like Saudi Arabia, UAE, Kuwait, and Qatar have also re-focused their attention on developing their Defense Technology Industrial Base and break their historic dependence on Western allies for defence procurement. The UAE has been paving the way for developing indigenous military technologies over the last few years, including autonomous robots like drones.


The GCC states of UAE, Saudi Arabia, Kuwait, Oman, and Bahrain have also started developing their space programs over the last decade with the help of countries like the US, Japan, etc. They seek to acquire the capability to launch commercial satellites. These states are among the 14 member-states of the Arab Space Cooperation Group which seeks to coordinate spacefaring activities in the region. Meanwhile, the UAE has announced plans to set up a human settlement in Mars by 2117. These states have also been focusing on collaboration with states like India for Maritime Domain Awareness in the Indian Ocean Region.


Saudi Arabia and UAE are also shifting their attention towards embracing and developing green technologies to fight the growing challenge of climate change. A majority of the region's states have committed to net zero targets or at least cutting emissions by considerable percentages by 2060. They have been focusing on the development of solar energy, wind energy, and hydropower as renewable alternatives. Research in green hydrogen fuel, clean carbon technologies and the creation of zero-carbon cities is receiving impetus in the UAE and Saudi Arabia.


Reducing Dependency on West: Reshaping Tech Education


However, the GCC countries still depend on Western states for technology transfer as they have historically been importers rather than innovators of new technology. The need of the hour entails heavy investments in reconfiguring existing educational systems to make them more science and research oriented. This could help develop a skilled, indigenous workforce that could ultimately shape the countries' indigenous knowledge-based economies while simultaneously creating more jobs and usher in economic growth.


For instance, the UAE has established the Dubai International Academic City, the world's largest Free Zone dedicated to Higher education, to develop the region's talent pool and establish UAE's knowledge-based economy by 2102. The Qatar Foundation established the Education City in 1997 to support and operate programs in education, science and research, and community development. Saudi Arabia's BADIR Programme for Technology Incubators has been a major achievement as it focuses on supporting jobs based on technical developments and technical projects, namely for ICT, Biotechnology, and Advanced Production Technology. Another breakthrough has been the establishment of the King Abdullah City for Science and Technology (KACST), which performs functions such as drafting science and technology policies, data collection, foreign research funding, etc.


Oman has also undertaken programmes to encourage scientific education amongst its people. The country supports technological research and innovations through programmes like Oasis of Innovation and the Academic Innovation Assistance programme. In Kuwait, the Kuwait Foundation for the Advancement of Sciences established a program that offers Kuwaiti private companies an opportunity to develop their innovation capabilities with the help of experts from Cambridge University's Judge Business School. In Bahrain, the Bahrain Development Bank and E-Government Authority have jointly developed a program for facilitating the growth of the ICT sector in the country.


Thus, GCC countries have significantly evolved over the years from dependency on hydrocarbons to embracing technological advancements to bring about rapid economic growth. This trend will only continue to grow unless these countries fall back into their comfort zone, i.e., oil, which, considering the energy demands created by the Russia-Ukraine conflict, seems more plausible than ever.


Disclaimer: The article expresses the author’s views on the matter and do not reflect the opinions and beliefs of any institution they belong to or of Trivium Think Tank and the StraTechos website.

Noiranjana Kashyap

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Noiranjana holds an M.A. in Geopolitics and International Relations from the Department of Geopolitics and International Relations, Manipal Academy of Higher Education. Her research interests include the geopolitics of Turkey, the Eastern Mediterranean region and the West Asia and North Africa region.

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