Embracing the AI revolution: Navigating the future in the UAE

Just as the discovery of oil helped catalyse the transformation of the UAE’s desert expanses into a thriving business metropolis, artificial intelligence is set to redefine our economy, society, and daily lives in equally profound ways.

While the initial enthusiasm around generative AI has given way to a more realistic assessment of the pace of change, there’s no denying the monumental shift it promises.

As such, the imperative for businesses is clear: Not just to react but to anticipate. The wave of artificial intelligence isn’t just coming; it’s already begun to influence and is poised to become an integral part of the strategic planning process, influencing decision-making and operational efficiency at every level.

As an early adopter of AI, the UAE has already begun implementing strategic measures to harness this potential. Initiatives such as the AI Strategy 2031, the establishment of the Mohamed bin Zayed University of Artificial Intelligence, and the Dubai Data Initiative are indicative of the country’s belief in the technology and its transformative potential. With AI expected to contribute up to 14% to the country’s GDP by 2030, these measures provide a clear roadmap towards making this a reality.

The bedrock of AI integration

Many applications of AI are already well understood and widely used across a broad spectrum of industries. AI-powered chatbots, for instance, are now a staple for many businesses.

Emirates NBD’s AI chatbot, Eva, is a prominent example. Eva has handled over 2 million customer chats since its inception in 2016, increasing the efficiency of resolving customer queries by 30%. Similarly, RAKBANK introduced its AI chatbot RAKBOT in 2018, which has successfully reduced customer wait times by up to 50% and increased customer satisfaction scores by 40%.

Predictive analytics, another cornerstone of AI application, is equally widespread, with sectors from retail and banking to healthcare and logistics leveraging it to anticipate customer behaviours, market trends, and potential risks.

RAK-based Julphar, one of the largest pharmaceutical manufacturers in the Middle East, utilises predictive analytics to optimise its production processes and manage supply chain efficiency, resulting in a 15% improvement in supply chain efficiency and a 20% reduction in waste output.

Additionally, RAK Ceramics, a global giant in the ceramic industry, employs predictive analytics to forecast market trends and customer preferences. This has enabled them to manage inventory levels more effectively and bring desired products to market faster and with greater alignment to customer needs.

The game changers

For most companies, starting with the foundational applications provides immediate benefits and a solid basis for further AI exploration. These solutions offer a lower barrier to entry and a clear ROI, making them accessible to businesses of all sizes. However, venturing into the more innovative applications of AI is where the most significant gains are to be made. For business leaders, the key is not just to adopt AI where it’s already proven but to envision where it could go next by balancing foundational applications with strategic investments in newer innovations.

Autonomous operations

Autonomous operations, particularly in the realms of logistics, manufacturing, and service industries, represent a frontier in the application of AI that, while still in its early stages, offers ground-breaking prospects for businesses ready to innovate. Several pilot programmes and initiatives, such as Dubai’s Autonomous Transportation Strategy, already indicate strong interest.

Adopting fully autonomous systems, such as drones for delivery or autonomous vehicles for transportation, demands substantial investment and a readiness to navigate initial risks. Yet, the potential benefits in terms of efficiency gains, cost reduction, and innovation provide a compelling case for exploration.

There’s clearly an increasing demand for faster, more efficient services among consumers, particularly in the UAE, where the population is both tech-savvy and accustomed to high levels of service and convenience. In fact, a 2020 Global Consumer Insights Survey by PwC highlighted that over 60% of consumers are willing to pay more for services that offer greater convenience and speed, and autonomous systems can deliver this.

The financial implications are also substantial. According to a report by McKinsey, autonomous vehicles and drones in delivery services could eventually reduce shipping costs by up to 40%, primarily through lower labour costs and increased efficiency. Other industries stand to gain, too. Automation and robotics in the manufacturing industry are expected to increase production output by 20%–25%, while the use of autonomous drones for last-mile deliveries in the logistics sector is anticipated to reduce delivery costs by up to 80%.

R&D and sustainable development

AI has great potential in many areas, including R&D and sustainable development.

One compelling example is the RAK-based utility provider, Utico, which is exploring AI technologies to optimise water treatment processes and energy consumption. By employing AI for predictive maintenance and real-time monitoring of its infrastructure, Utico aims to significantly reduce energy usage and operational costs, while ensuring a continuous supply of clean water. Another example is Falcon Technologies, a tech firm specialising in innovative solutions for the construction industry. Falcon Technologies is leveraging AI to transform building design and construction management, using algorithms to predict project timelines, optimise resource allocation, and minimise waste. This approach not only accelerates project delivery times but also enhances sustainability and reduces costs.

Industry-wide, AI integration in construction management has been shown to cut project costs by up to 20% and reduce project timelines by 30%, according to the Boston Consulting Group. With companies across sectors facing pressures to reduce time-to-market for new products and services while also managing R&D costs, AI is proving invaluable.

The potential applications of AI are vast and varied. Beyond optimising water treatment and transforming construction management, it can drive advancements in environmental technology, helping to create more efficient systems for water purification or waste management. In agriculture, AI can aid in developing crops that are more resistant to climate change, pests, and diseases. The possibilities are as limitless as the data AI can analyse.

The path forward

For business owners and entrepreneurs in the UAE, the message is clear: the integration of AI is not a distant future possibility but a present opportunity. Whether through enhancing customer experiences, optimising operations, or creating new value propositions, AI offers a pathway to significant business transformation.

Small and medium-sized enterprises (SMEs) may find the prospect of integrating AI daunting due to cost or expertise requirements. However, partnering with tech firms or universities or participating in government-led AI initiatives can provide access to the necessary resources and knowledge base to make AI integration attainable.

By Puneet Jain, Chief Strategy Officer, RAKEZ

Published by Logistics Middle East