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How to develop and empower the UAE’s growing AI economy?

How to develop and empower the UAE’s growing AI economy?

AI is a crucial supporting tool, and can boost sales, identify fraud, enhance customer experience, automate processes, and assist with predictive analysis

One of the standout trends in recent months is the growing implementation of artificial intelligence (AI) technologies as businesses strive to differentiate from their competitors.

A 2019 report from the International Data Corporation (IDC) predicted that MEA spending on AI would reach $374.2m in 2020 with a compound annual growth rate (CAGR) of 19 per cent for the 2018-2023 period. Correspondingly, new company formation enquiries from AI businesses reacting to this demand have increased significantly – Creation Business Consultants has seen close to a 100 per cent increase compared to this time last year.

It is time to integrate AI into systems and processes where possible, and the UAE government is leading the way with its UAE 2031 Artificial Intelligence Strategy. Many of the benefits are evidenced in its aims, which include saving 50 per cent of the government’s annual costs, tackling 190 million wasted hours per year on transactions, and boosting the UAE’s GDP by 35 per cent. Overall, the framework seeks to secure a smarter, more efficient future that’s better equipped to deal with future crises.

Implementing effective AI strategies
AI is a crucial supporting tool. Broadly speaking, it can boost sales, identify fraud, enhance customer experience, automate processes, and assist with predictive analysis. Awareness of the possibilities has accelerated mainly in the medical, education, infrastructure, transportation, and energy industries. However, it’s only a matter of time before all companies, irrespective of their size and sector, will have to incorporate some AI software elements into their operations.

With this in mind, it’s important to note that these innovations’ full potential can only be realised with effective implementation. Some of the current challenges to be aware of include:

· Cost: AI integration can save a significant amount of money in the long-term, but the initial investment and roll-out costs are high. They include creating a suitable model, software installation, training, and the education of staff and customers. At a time when budgets are being squeezed, this needs to be carefully factored into cashflow forecasts and business planning.

· Building trust: We’re still in the early adoption phase, meaning AI-driven decision-making represents a big unknown for many people (but that’s why acting now can deliver a competitive edge). Until stakeholders understand the opportunities and accuracy associated with machine learning, it can be hard to convince them of its value. Organisations should invest in skill-building so staff feel more comfortable in the parameters and clearer about how AI will affect their role.

· Data protection and security: AI applications depend on a massive amount of data to learn and make intelligent decisions; this information is very often sensitive and personal. Companies need to proceed with caution to keep AI systems safe and secure against data breaches/identity theft by working with a credible AI partner who can mitigate the risks and advise on General Data Protection Regulation (GDPR).

· Governance and responsibility: Clear KPIs are vital in all areas of a successful business, and performance indicators should be developed to assess the effectiveness of AI. AI governance is still catching up and we can expect to see clearer guidelines put in place as the market develops in 2021. Ultimately, there needs to be accountability around who is responsible for AI within the organisation in both practical and ethical terms. Assigning roles and responsibilities and designing a robust charter should be led by the CEO.

AI company set-up options
The UAE is at the forefront of technology, making it the perfect place for AI companies to establish a regional presence with several different setup options. It’s important to get advice from the right experts to navigate the process and overcome any challenges that might arise. For example, if an AI company wants to focus on a particular sector e.g. education or healthcare, then external approvals may be required.

Abu Dhabi Global Market (ADGM)
ADGM Free Zone is one of the most attractive leading licensing authorities for AI company setups.

In 2019, ADGM partnered with the London-based Centre for Finance, Technology and Entrepreneurship (CFTE) to introduce its “Artificial Intelligence in Finance” programme. This aims to increase AI knowledge and understanding of its impact on the local and global financial services industry. ADGM is recognised by banks and financial institutions worldwide. It provides capital structuring flexibility, 100 per cent foreign ownership and a highly regulated operating environment governed by English Common Law. Entities can have a special purpose vehicle (SPV) company for holding IP, protecting trademarks and holding assets. There is a zero per cent tax rate on income or profits (guaranteed for a period of 50 years) and a wide network of double taxation treaties are available.

Dubai
In Dubai, the Dubai Multi Commodities Centre, Dubai Silicon Oasis, and Dubai Internet City Free Zones, as well as mainland Dubai, are all good choices. Depending on the shareholding and the number of shareholders, we would advise on the most secure structure to take companies into the future, support any plans for an exit strategy and, most importantly, protect IP and assets.

Scott Cairns is the managing director at Creation Business Consultants

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