AI at the Frontier

If 2023 was the year of enthusiasm and experimentation for artificial intelligence (AI), 2024 is the year that it goes mainstream as firms deploy the technology on a larger scale.

IBM’s Global AI Adoption Index found that 42% of IT professionals at large organizations report that they have actively deployed AI. The same research reports that China, the UAE, and India are among the most active in terms of AI usage. A 2020 MIT report shows widespread adoption across the Middle East and Africa (MEA) as early as 2019. 82% of large companies in the region had already launched AI programs by the end of that year. Projected to contribute $320 billion of value in MENA by 2030, the implementation of AI is only beginning.

 What does this mean for the region? Here, we are already witnessing interesting deployment of this technology. For example, the UAE’s spidersilk leverages AI to proactively identify and detect cyber vulnerabilities, resulting in more targeted, cost-efficient, and intelligent cybersecurity. Axis’ AI-powered semantic search platform sorts unstructured data from multiple sources, providing businesses deeper and real-time insights into changing regulation, competitive dynamics, and stakeholder behaviors.  

AI’s potential is too significant to ignore, and its implementation has become imperative for businesses to remain competitive. The truth about AI is that it can profoundly elevate the outcomes of human intelligence, across sectors and spaces. Through automation, data analysis, accurate decisioning and research, AI brings efficiency beyond what was once possible, freeing human headspace for far more complex and creative tasks and driving productivity, industry, job, and wage growth throughout the economy.   

This is a global reality and while it applies to emerging markets, the opposite is not true: local and regional realities make AI’s fundamental truths far more impactful in these markets than others.

There are four truths about emerging markets, with MEA acting as prime examples, that are particularly relevant to this conversation.

• One: In frontier markets, entrepreneurship is a job and economic growth multiplier
• Two: Start-ups and technology in these markets are more than a lucrative economic opportunity, but drivers of positive social, economic, and environmental impact
• Three: Regional businesses are more sustainable due to an inherent adversity advantage
• Four: Across markets in MEA, the adoption of technology creates a considerable leapfrog opportunity due to a baseline lack of infrastructure.     

What happens when we juxtapose these four truths with the truth about AI? How does the application of AI translate in the context of business-building in emerging markets?  

If regional start-ups are inherently more resilient, how does AI increase and improve a business’ lifespan? If AI creates jobs, what does it mean in markets with record high unemployment rates? If AI accelerates economic growth, how does it apply in markets that are already among the fastest-growing globally? If AI creates new industries, what can it do in markets with a lack of infrastructure? If AI helps solve some of the world’s biggest challenges, how does it accelerate the region’s existing innovation head start?

More jobs. Entrepreneurship is already the biggest force of job creation worldwide. In emerging markets, the prevalence of entrepreneurship is 25% higher than in places like the US thereby creating more jobs as a whole. It is because new ventures often need to fill multiple market gaps to grow.

When AI is layered in, it produces a multiplier effect on employment. In essence, the productivity potential of AI reduces the input needed while also increasing output and decreasing prices  - creating more economic demand, fueling more production, and generating more jobs. In markets where unemployment rates are among the highest in the world (as high as 19% in some places, compared to the world average of 5%) and where the incidence of entrepreneurship is higher, the integration of AI amplifies the economic effect of start-ups.

More impact. From capital and talent to natural and non-natural resources, scarcity has been a common feature in emerging markets. To illustrate, food insecurity has been a regional reality before the growing threat of climate change, just because these markets are home to some of the most arid lands on earth. Regional entrepreneurs are and have been building localized solutions around these limitations, making them increasingly and globally relevant in the context of a warming planet. In the ways that AI broadens the scope of scientific breakthrough – leveraging existing datasets to make more accurate predictions and offer more tailored and thorough analysis – its analytical potential is far greater in markets that have a data head start.

While the solutions being built regionally have global applicability, the majority of entrepreneurs are also solving deep challenges for millions of people in their immediate markets. If AI eliminates routine tasks and brings more efficiency, then it allows them to focus on building and improving products that perform better, are more targeted and have more impact.    

More success

I have argued elsewhere that emerging market entrepreneurs are more resilient by design due to the adversity and uncertainty that has always characterized regional operating environments. Research has shown that they carry a higher survival rate. The adaptive nature of AI complements the inherent resilience of businesses in emerging markets, enabling greater sustainability and business longevity. McKinsey finds that AI leaders outperform their industry peers by a factor of 3.4. That number compounds when we consider that regional start-ups intrinsically perform better.  By harnessing AI-powered predictive analytics and risk management tools, businesses can better anticipate and mitigate operational challenges, ranging from supply chain disruptions to market volatility. AI-generated insights enhance decision-making processes, empowering businesses to navigate uncertain environments with agility and foresight.   

More leapfrogging

The lack of infrastructure in regional markets, long perceived as a developmental disadvantage, is now an opportunity for technology to help transition these markets to digital models and bypass entrenched infrastructure. AI takes this a step further, reshaping the future of development through innovation. We are already witnessing AI-enabled medical care delivery systems expand access to care in areas where resources and infrastructure are limited, and AI-powered diagnostic services allowing early detection of diseases while improving patient outcomes and reducing healthcare costs. 

500 million rural and peri-urban Africans lack access to basic diagnostics due to geographical and financial barriers. Doctors can't offer these tests in clinics, leading them to refer patients to labs, except that rural infrastructure challenges often prevent patients from seeking further treatment, leaving a large population without access to care. Kenya’s Ilara Health is addressing the bottleneck by partnering with high-tech device manufacturers and companies using robotics and AI to create more affordable and accurate diagnostics, integrating these devices into Ilara Health’s technology platform, and selling this bundle to doctors with a financing component.

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The world is currently experiencing the strongest wave of AI discovery and deployment to date. If this iteration is projected to transform companies, industries, and economies in most of the world, its impact on the region will be monumental – in the ways businesses are built, create impact, and contribute to economic growth and development. This wave, unlike its predecessors, will usher in a platform shift globally… and a paradigm shift for emerging markets.