Automation poised to transform GCC labor market

Dubai, UAE – The GCC automation market is expected to exceed $10 billion by 2023, transforming everything from governance to businesses to the labor market. 

Management consulting firm McKinsey predicts that 42.6 percent of jobs in the GCC will be automated by 2030, ahead of the global average of 32 percent, based on a study of five GCC economies: Kuwait, Oman, Saudi Arabia, Bahrain, and the United Arab Emirates. As a backup plan against future pandemics, the GCC’s business automation strategies evolved quickly during and after the COVID-19 pandemic.

The likelihood that a job will be automated soon is highest for those with a high school education (57 percent) compared to those with a bachelor’s degree (22 percent) and higher education (3 percent).  Retail, food service, and wholesale trade workers are less likely to be affected than those in the wholesale, construction, and manufacturing industries.

Digital technology advancements are projected to have an impact on manned and unmanned networked autonomous transportation, as well as the physical transportation infrastructure powered by smart sensors. Innovations in areas such as automation, robotics, autonomous vehicles, and Big Data analytics are anticipated to either revolutionize or disrupt the logistics service industry.

UAE, KSA take lead

The UAE and Saudi Arabia (KSA) lead technology adoption. Government support, higher internet penetration, and mobile technology have boosted the logistics startup sector. Companies are experimenting with using autonomous vehicles and drones to do last-mile deliveries more quickly and efficiently, and robots are being integrated into the automation of modern warehouses.

Automation strategies

According to VR Ragunandan, Account Executive at Vuram, a provider of hyperautomation services, the GCC governments have taken a number of business and technology-related initiatives that have been successful. These initiatives include widespread adoption of front, middle, and back-office process automation as well as ongoing advancements in artificial intelligence and robotics.

“IT and automation events show a futuristic mindset to adopt technologies,” Ragunandan told TRENDS in an interview adding that a lot still needs to be done by GCC businesses to adopt technology.

This, according to him, includes people and change management, organization-level adoption of technology, listening, understanding, and empathizing with all the stakeholders at all levels, setting internal  CEOs investment and budgeting.  Governments in the GCC still need to establish data residency and availability limits, implement cloud technology, and exercise flexibility when signing contracts with outside suppliers. 

Benefits

GCC Skills plays a significant role in technology transmission, and governments constantly encourage youth to master new skills. The three areas that Ragunandan recommends are business operations, process optimization, and customer success-related studies. When applying automation strategies, GCC businesses will benefit from rising customer satisfaction and international operational accuracy. Automation also helps companies to reassign employees to more valuable duties and provides a better reach to attract possible future clients. At the same time, automation reduces the costs of firms. 

Ragunandan explained: “With the right strategy, businesses can save 60-70 percent costs with automation”. By automating the invoicing process, he continued, a business can save between US$8 and $10 every invoice, as an example.  “Raising almost 1,000 invoices every month will save US$100,000 to $120,000 annually,” he added.