ILO Report: AI and Digitalization Could Boost Jobs in Arab States if Inclusive

A new report from the International Labour Organization (ILO) projects that digitalization and artificial intelligence (AI) could significantly boost economic growth and job creation in the Arab States, provided governments and businesses adopt inclusive policies and invest in digital infrastructure and skills development.

The study, titled Navigating the Digital and Artificial Intelligence Revolution in Arab Labour Markets: Trends, Challenges and Opportunities, offers the most comprehensive regional analysis to date on how emerging technologies may reshape labour markets across the Gulf and Levant countries.

Opportunities and Risks

The ILO estimates that nearly 14.6% of jobs (around 8 million positions) in the region could benefit from AI-driven augmentation—where technology complements rather than replaces human labour. In contrast, about 2.2% of jobs (roughly 1.2 million) are at risk of being fully automated by generative AI.

By 2035, AI adoption could add USD 14.1 billion to the region’s GDP and generate a net increase of 118,000 jobs. However, the benefits will not be evenly distributed.

• Sectors likely to gain: construction, transport, engineering, personal services, and education.

• Sectors facing potential decline: public services, basic manufacturing, retail, and routine clerical work.

“Digitalization and AI adoption in the labour market do not have to imply job destruction,” said Ruba Jaradat, ILO Regional Director for Arab States. “While some jobs will be lost, others will be augmented or newly created. The benefits of AI can only be realized if the transition is managed inclusively and fairly.”

Gender and Age Gaps

The report highlights sharp demographic disparities:

• Women: 5.3% of women’s jobs are at risk from automation, more than three times the rate for men (1.6%), due to women’s concentration in clerical roles. However, 22.7% of women’s jobs could be enhanced by AI, compared to 13% of men’s. Without gender-focused policies, women may still face fewer opportunities by 2035.

• Youth (15–24): More likely to benefit from AI adoption, particularly in new technology-driven jobs.

• Older workers (55+): Face higher risks of exclusion due to reskilling challenges.

• Vulnerable groups: Low-skilled workers, migrants, refugees, and persons with disabilities risk being left behind without targeted support.

Policy Imperatives

The ILO stresses that outcomes will depend on policy choices made today. Key recommendations include:

• Investing in digital infrastructure to close connectivity gaps, especially in rural and conflict-affected areas.

• Building a digitally skilled workforce through education reforms, embedding digital literacy, STEM subjects, and lifelong learning.

• Updating labour laws and protections for workers in the digital economy, including gig and platform workers.

• Supporting SMEs to adopt digital tools and integrate AI to boost competitiveness.

• Strengthening social protection systems and employment services to help workers transition.

• Encouraging social dialogue among governments, employers, and workers to shape national strategies.

• Promoting regional and international cooperation to harmonize standards and bridge digital readiness gaps across Arab States.

Regional Context

The report covers the Arab States of the Gulf and the Levant: Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, the State of Palestine, Syria, the United Arab Emirates, and Yemen.

The analysis forms part of the ILO’s broader global initiative on AI and the digital economy, coordinated through its Observatory on AI and Work in the Digital Economy. The findings will guide future ILO support to governments and social partners in designing national and sectoral strategies that ensure technological progress translates into decent jobs and inclusive growth.