Digitalization and artificial intelligence promise to boost jobs in the Arab States – but they must be managed inclusively

BEIRUT (ILO News) – A new report by the International Labour Organization (ILO) projects that digitalization and artificial intelligence (AI) will have an overall positive impact on jobs and growth in the Arab States region if supported by effective investments and policy measures. The report also highlights the need for countries to adopt inclusive policies that leave no one behind in the transition to a digital economy.

The report, Navigating the digital and artificial intelligence revolution in Arab labour markets: Trends, challenges and opportunities, highlights that nearly 14.6 per cent of jobs (almost 8 million) could benefit from AI-driven augmentation, where technology enhances rather than replaces human work. By contrast, around 2.2 per cent of jobs (around 1.2 million) across the region are potentially at risk of being automatable with generative AI.

The report finds that by 2035, AI integration could generate US$14.1 billion in additional GDP and lead to a net creation of 118,000 additional jobs across the region. But digitalization and AI will affect sectors unevenly. Sectors such as construction, transport and storage, teaching, personal services and engineering are expected to see net gains, while jobs in public services, basic manufacturing, retail and routine clerical work may decline.

“Digitalization and AI adoption in the labour market do not have to imply job destruction in the Arab States region,” said ILO Regional Director for Arab States Ruba Jaradat. “While some jobs will be lost, others will be augmented or newly created. The real benefits of AI and digitalization, however, can only be realized if governments, employers and workers take deliberate steps to make the transition inclusive and fair. This report is an important resource for policymakers, providing evidence, data and recommendations that can help the region prepare for the digital future of work and ensure that technological progress translates into more and better jobs and opportunities for all.”

The study highlights sharp disparities across demographic groups. Women hold more than three times the share of jobs at risk of automation due to generative AI (5.3 per cent) compared to men (1.6 per cent), reflecting women’s concentration in routine clerical roles. Yet they also stand to benefit the most from augmentation, with 22.7 per cent of female-held jobs potentially enhanced by generative AI technologies compared to 13 per cent of male-held jobs. Importantly, even after accounting for the job creation potential of AI and digital technologies, women are projected to face fewer job opportunities by 2035 unless policies are deliberately designed to address gender inequalities and actively promote women’s employment. 

Youth aged 15–24 are more likely to benefit from AI adoption, particularly in new tech-driven occupations, while older workers aged over 55 face greater risks of exclusion due to reskilling challenges. Other groups such as low-skilled workers, migrants, refugees and persons with disabilities also risk being left behind without targeted support.

The report stresses that the outcome of digital transformation will depend heavily on policy choices. Governments must invest in digital infrastructure and narrow the digital divide, especially in rural and conflict-affected areas. At the same time, they need to build a digitally skilled workforce by embedding digital literacy and lifelong learning, as well as science, technology, engineering and mathematics (STEM) subjects into education and training systems.

Robust social protection and employment services are also critical to help workers adapt to technological disruption, while micro, small and medium-sized enterprises must be supported to adopt digital tools and benefit from AI. The report also urges countries to update labour laws and regulations to protect workers in the digital economy, including platform and gig workers, while ensuring that strategies are developed through social dialogue among governments, employers and workers. Finally, the ILO calls for stronger regional and international cooperation to reduce disparities in digital readiness and align national strategies with global standards.

The report’s findings will guide ILO support to governments and social partners in navigating the digital transformation of work. They will serve as a foundation for developing and implementing regional, national and sectoral strategies that translate into tangible labour market and employment outcomes.
 

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. It provides an in-depth regional view that underpins the ILO’s global work on the world-of-work dimensions of AI and the digital economy through its Observatory on AI and Work in the Digital Economy.