7 July 2026 11:20 pm
The Role of the State in Fostering Growth and Innovation

The Role of the State in Fostering Growth and Innovation

Jul 6, 2026

Scenic view of Muscat’s traditional architecture against rugged mountains during the day. by Uğurcan Özmen via Pexels

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What is the role of the state in fostering growth and the green transition?

Productivity & growth • 6 Jul 2026 Delfina Godfrid, Nicholas Stern
Action to address climate change can drive strong, sustainable growth. The state is central in setting the direction of change and mobilising investment and innovation to achieve it. But time is not on our side. Research to guide policy has never been more urgent; it must proceed alongside action.

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This article is part of an upcoming collection on state capacity and industrial strategy by the Policy Hub for the Huth Initiative for a New Political Economy.

The new growth story of the 21st century must be about sustainability and resilience, and with artificial intelligence (AI) at centre stage. It will be very different to the polluting and unsustainable models that so many countries have followed. Private investment will be at the core. But the role of the state will be critical in making it happen. The task of governments and public institutions is to devise comprehensive strategies, policies and institutions that can foster transformation across all economic sectors.

The role of the state must include setting incentives, aligning expectations and spurring innovation and entrepreneurship. It will be in the vanguard of system change, including in our cities, energy, transport, land and water.

This requires a clear strategic vision, tackling market failures and encouraging private investment in new areas. At the same time, it must manage the socio-economic and political challenges arising from dislocation and vested interests. And it must be aware of and avoid the dangers of government failure. In so doing, it must beware both market and institutional fundamentalisms.

These are ambitious tasks that require a renewed and effective state. This article outlines key dimensions of the state action that are needed to enable this growth story. Together, they form both a sense of direction and a research agenda. Because of the urgency, action and learning must go together. There will be mistakes along the way, but this should not be an argument for inaction. Delay is dangerous.

This is a time of crisis – and a new growth story is needed

Much of the global political landscape is currently divided. Across the world, there has been erosion of constitutional democracy. Some of this is related to the sluggish economic growth that the world has been experiencing, eroding living standards for many, undermining communities and leading to anger and discontent.

In this context, climate action has been characterised by many as an issue for elites. Yet it is not sustainability-aligned policy that has led the world to its current state. On the contrary, the lack of it has contributed to the difficulties. Climate inaction creates instability, migration and conflict. Climate action drives growth.

Transforming our economies towards sustainability can provide exactly what is needed to overcome the political and economic difficulties of the present: integrated, well-designed and well-implemented public policy and institutional structures that drive development through private and public investment, innovation and systemic change. Such actions can unleash the forces that will transform our economies, creating strong, sustainable, resilient and inclusive growth.

Climate action will drive the new world growth story. There is no inevitable trade-off between climate action and growth: the former drives the latter. And it is a much more attractive form of growth than the dirty and destructive models of the past.

Developing nations, where most of future growth and investment are set to happen, are at centre stage. In these places, most of the infrastructure remains to be built, the vast majority of the world’s renewable resources are concentrated and the investment needs are the greatest. Their cities can be built in different ways, choosing health and efficiency over pollution and congestion; their agricultural systems can combine local knowledge and AI to become smarter and less toxic; and their economies can leverage their clean endowments, potentially benefiting from a new world economic geography where abundant clean energy or the availability of specific minerals is a key asset.

Strong investments and innovation are necessary across the whole economy – see Figure 1 for five key climate investment areas. Such investment must reach all forms of capital, including physical, natural, human and social.

Clean energy investment drives development; natural capital investment underpins it; adaptation and resilience investment sustains it; and just transition investment makes change equitable, desirable and possible. This investment would strengthen demand, supply and efficiency in the shorter term; stimulate innovation and discovery, creating new investment opportunities in the short and medium term; and avoid the destructive impacts of climate change in the longer term. Carbon-intensive growth self-destructs; it is not a viable option.

Alongside the necessary increase in investment, the growth story comes from a number of key drivers (see Figure 1):

  • Lower costs and technological advancement, with the clean already being cheaper than the dirty across much of the economy, and innovation proceeding apace across most action areas.
  • Increasing returns to scale, shown by many new products and activities.
  • Increased resource efficiency, leading to higher productivity.
  • Reduced pollution, improving health, reducing mortality and increasing productivity.
  • Improvements in the key systems of cities, energy, transport, land and water – for example, cities where you can move and breathe are much more productive than those that are heavily polluted and congested.

AI can magnify these drivers, enabling green and intelligent growth (Stern et al, 2025). See The Growth Story of the 21st Century (Stern, 2025) for a further description of the drivers of growth.

Figure 1: Key investment sectors and growth drivers

The role of the state: five key areas for action

The role of the state as indicated above is crucial to the delivery of the growth story. It will chart a path, and thereby expectations, create the conditions for investments, steer action towards shared objectives and help to bring society together. The remainder of this article focuses on five key areas for state action. These are also priority areas for research, which must move quickly and alongside action. Time is not on our side.

National strategy and direction

Structural change at speed requires strong political support. The state must establish a clear direction and craft a compelling national vision and narrative. And it must act so that some of the tangible benefits of change are experienced directly and soon. It is crucial to foster a shared understanding that the transition is a growth story with sustainable and resilient investment at its core. This narrative both resists the separation of climate and development, and tackles misinformation.

There is no doubt that many challenges will arise, but the role of the state is to make practical choices to overcome them. The narrative should be one of hope, presenting climate policy for what it is: action with the objective of advancing development and wellbeing. It is about technological innovation, modernisation, efficiency, creation of job opportunities, industrial dynamism, resilience and more.

It is a narrative and strategy that highlight both the growth story that action enables and the immense curtailment of rights to and opportunities for development that inaction causes. By creating a hostile environment, climate change can erode fundamental human rights, such as access to food and health, and damage economic and human development across the board. The argument should also embrace a discussion of what is ethical and responsible in relation to future generations and others in the current generation (Stern, 2026).

Such narratives and action plans were embodied in the European Union’s Green Deal and the US Inflation Reduction Act.

Comprehensive management of market failures

A core task in generating change and building support is the tackling of key market failures (Stern, 2022), thus reframing incentives and helping to create the conditions for the required investment flows. These market failures, which are many and interwoven, must be tackled together in complementary ways.

A narrow understanding of market failures, highlighting only the externality from greenhouse gas emissions, has led many economists to focus overwhelmingly or exclusively on pricing carbon emissions in formulating policy. Such pricing is indeed a critical part of policy, but it must be complemented by action on other key important failures.

These include research and development (R&D) and innovation, which stem from creators’ inability to capture the full value of their ideas due to knowledge spillovers. Without policy, that leads to under-investment in innovation. Research shows that combining carbon pricing and R&D can be much more powerful than carbon pricing in isolation (Acemoglu et al, 2012).

Another critical market failure concerns networks. Without policy, markets do not adequately account for network interdependencies and can ignore systemic risks and opportunities. Understanding and acting to improve ‘feedbacks among interacting elements’ (Catanzaro and Buchanan, 2013) can bolster efficiency and unlock economic value. For example, the quality of urban mobility is linked to urban planning decisions, the value of having an electric car to the availability of chargers, the viability of clean energy generation projects to grid availability, and so on.

Further important market failures concern information – for example, on how products have been made and other co-benefits where health from avoided pollution can be of great importance (see Figure 2). Capital market imperfections can hinder finance for the strong new investments that are required – development banks can play a key role here.

Figure 2: Key market failures related to climate and sustainable development

Institutional strength, governance and the investment environment

Policy predictability, coherence and a clear direction of change are all fundamental in building the confidence needed to foster investment in the green transition. Policies will change as circumstances change and learning takes place.

But for investor confidence, such change should be ‘predictably flexible’. Criteria for flexibility should be transparent – for example, reducing subsidies for renewables as and when costs fall and diffusion occurs. Concerted action across government, to foster policy alignment, and convening stakeholders, to generate cohesive action, can advance investment more quickly than measures that are uncoordinated across ministries.

‘Country platforms’ can provide mechanisms for coordinating the mobilisation of domestic and international sustainable finance in alignment with national development priorities. Standards and regulation can guide investments and signal which forms are consistent with the long-term trajectory of the economy, in alignment with sustainability goals. As far as possible, sharing standards and coordinating strategies across countries can enlarge markets and accelerate progress (Bhattacharya et al, 2025).

An example of consistency in policy-making is in Uruguay. The country has attracted clean investment and transformed its electricity matrix in less than two decades through sustained and clear policy and regulation. It has also built credibility in innovative ways: by holding itself accountable for climate action, having established a sovereign bond with a structure where, if its aims are not met, it will pay a higher interest rate (Godfrid et al, 2025).

Further, creating a positive investment environment requires strong macroeconomic policies, which are fundamental to ensuring the high investment levels needed in sustainable sectors are translated into increased output and not just a crowding out of private investment. Debt management is part of that story. Legal institutions are also of great importance in offering clarity on obligations and for dispute resolution.

Industrial policy for a dynamic and green private sector

Fostering private investment in the new growth story requires tackling market failures, building credibility in strategy and policy, and creating a strong investment environment across the whole economy. It also involves identifying where a country’s clean economic potential and comparative advantage lie. Such was the case with the Danish government’s support for private firms and entrepreneurs in the wind power sector, which was key to creating the country’s renowned innovation ecosystem (Technology Executive Committee, TEC, 2023).

Providing the right support requires that each country crafts tailored measures, as Japan did through its Ministry of International Trade and Industry, which selected and ‘nurtured’ industries through customised measures such as tax breaks and low-interest loans, accelerating their development (Johnson, 1982). Industrial clusters can drive sectoral growth by enabling economies of scale and collaboration, as seen in China (World Economic Forum, WEF, 2026).

Fortunately, the misguided sneering at ‘industrial policy’ typical of the years of market fundamentalism of the 1980s and 1990s has subsided. Building new industries and transforming technologies in a purposive way requires strategy and policies.

While the majority of investment for the transition will be private, there will also be a critical role for public investment, a crucial element of the role of the state. For example, public transport will play a fundamental role. In many countries, the electricity grid will be owned by the public sector. In many cases, this infrastructure facilitates private activity and builds for long-term growth and prosperity.

Finance will play a key role in fostering a green private sector. Priorities include reducing investment barriers, such as high costs of capital. This frequently involves better management and sharing of risk. Given that domestic capital markets in many emerging markets and developing countries are shallow, facilitating access to financial instruments, such as foreign exchange hedging, as Brazil’s finance ministry has done through its Eco Invest programme, can have catalytic effects.

Adequate access to finance is also of importance for households, whose transition requires their own investment. Often poorer households face a higher cost of capital. How households and organisations are supported and costs distributed is a key part of policy for the transition. The national and multilateral development banks can play a central role both in helping to create the conditions for investment and in managing risk and reducing the cost of capital.

Building stability in trade and collaborating across frontiers in innovation and clean energy generation can accelerate the drivers of the growth story, with positive spillovers across countries. State leaders should work through coalitions of the willing to foster market expansion, resource sharing, cohesive policy-making, access to finance and more, contributing both to resilient supply chains and fostering innovation.

Building trust and coordination across countries can generate predictability, while conflict and volatility can be dangerous. Multilateral action is also of importance in tackling the debt, fiscal and financial constraints confronted by emerging markets and developing nations (Stern, 2021).

Public discussion, social buy-in and workforce adaptation

When the transition plans are put into action, there will be deliberate structural change at speed and scale. Some vested interests will push back, in particular fossil-fuel sectors where high rents are at stake. Without pro-active state action, ordinary citizens will face challenges that will understandably create opposition, from dislocation to increases in the cost of living. Careful policy design must manage these risks while pursuing the economic and social gains from change, which will vary across countries with different systems and structures.

Public action will be necessary to help to overcome dislocation, particularly by investing in people and places to create new opportunities, or by providing low-cost capital to help households to manage change. Some vested interests will have to be confronted head-on. Public discussion and building a shared understanding or narrative are crucial to political and social ‘buy-in’. That discussion will often be focused on localised interactions.

It is critical that policy sustains social buy-in and, for this, that the benefits of the transition are shown early. Successful interventions require designing policy packages that account for and reconcile varied interests, articulating and managing negative impacts well in advance.

Still, not all challenges can be foreseen; there will be difficulties and learning that arise along the way. As emphasised, being flexible while maintaining predictability is a critical element of policy-making, both for investment and acceptance. Thus, political systems must remain open and receptive to public input and should be active in initiating civic dialogue.

What Jürgen Habermas called the public sphere – the space in which public opinion is formed – can take many forms, including citizens’ assemblies. Well-managed transitions, rather than generating backlash, should benefit communities and their workers, potentially increasing support for incumbent governments. For example, one study suggests that Spain’s coal phase-out process had some electoral success, with government, industrial and social discussion playing an important role (Bolet et al, 2024).

Research and action

The five areas of action described (see Figure 3) are also five areas for research. In its pace and scale, the necessary transformation is unprecedented in economic history, except in wartime.

The urgency means that this is ‘public policy as if time matters’ (Stern, 2018). It concerns structural and systemic change across the whole economy of a nation. And it will lead to a new economic geography where activity moves towards low-cost clean energy. It will require financing for investment to move much more strongly into emerging markets and developing economies, where the majority of future economic growth will occur.

These are great challenges for both action and research, and they require a new economics of structural transformation. But research and action must move together. Delay is dangerous.

Figure 3: The role of the state – an action agenda

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AI Sovereignty: Collaborate Globally for Success

AI Sovereignty: Collaborate Globally for Success

Jun 28, 2026

Three professionals in traditional and modern attire collaborate on a project in a contemporary office setting. by Mikhail Nilov via Pexels

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AI sovereignty: Collaborate globally, govern locally

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Carlos Vargas, University World News – 26 June 2026

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Governments across the wealthy world are drafting national strategies for artificial intelligence, and nearly all of them approach sovereignty the same way: as something a country builds and buys.

Compute clusters, sovereign cloud, domestic energy, national champions, a venture fund to convert research into firms. The logic is coherent and, on its own terms, sound. Prosperity and security increasingly belong to nations that can build and govern AI rather than rent it.

The instinct to control the machine is not the error. The error is what the approach leaves out: the capacity to govern knowledge, which no amount of hardware supplies.

The strategies are written around an economic priority, and that priority is real – but it is a short-horizon reading of it. A country can attract the data centre and train the workforce and still find, a decade on, that the science it produces is analysed, owned and monetised elsewhere.

Knowledge governance is the capacity that protects the long return on exactly the economic bet these strategies are making. Leaving it out is not a competing vision of the economy; it is the part of the same vision that pays out later, and that the rush to stand up infrastructure now tends to discount.

Canada’s ‘AI for All’ strategy

Canada’s ‘AI for All’, launched in June 2026, is among the most sophisticated of these strategies, which is precisely why it shows the pattern cleanly.

It is candid about the country’s dependencies and serious about closing them.

It assigns universities four jobs, and all four point downstream: a literacy engine training a million students, colleges as applied-AI upskillers, institutions as nodes in workforce alliances aligned to industrial demand, and research universities as the origin point for AI-native companies fed by capital.

Each role is legitimate. None is the role on which sovereignty actually turns. Read together, they reduce the university to a pipeline – a supplier of talent and intellectual property to an economy that someone else governs.

This is not a Canadian failing. The OECD’s recent work on science and innovation describes member countries reorganising research policy around competitiveness, industrial strategy and national security, and within that shift valuing universities for two outputs only: the workers they train and the research they commercialise.

The pipeline view is becoming the default way the wealthy world understands what a university is for. What that view cannot see is the function on which sovereignty actually rests.

The function the strategies omit

Call it knowledge governance: the capacity to produce research, decide the terms on which it crosses borders, and capture the value it generates. It is the difference between a science system that controls its own knowledge cycle and one that merely feeds someone else’s.

A country that governs its science moves through the whole cycle – it collects the data, analyses it, publishes first, and captures the value. A country that cannot, becomes a supplier of raw material. It generates biodiversity records, genomic data, climate observations, and loses control over who analyses them, who publishes, and whether the findings ever serve local priorities.

As I argued in a technology profile on connectivity and digital sovereignty in the Global South, written for the International Science Council’s Centre for Science Futures, sovereign infrastructure determines whether institutions can conduct, analyse, publish and benefit from their own research, or whether they remain field stations generating data for processing elsewhere.

That was written about the Global South, but the mechanism is universal and it transfers directly to AI. Data is the bloodline of the system, and governance is decided less by who owns the hardware than by who controls the country’s data, identities and research environments – the platform that authenticates a researcher, the cloud that stores a dataset, the environment in which a collaboration takes place.

A recent review of 775 non-United States data centre projects found that US companies operate close to half of them when weighted by investment value.

The study concluded that building a data centre on home soil does not secure digital sovereignty if a foreign entity runs it: the operator’s nationality becomes a jurisdictional hook, letting its home government compel access to the data inside whatever country it sits in.

A nation can own the compute and still cede the science if its universities authenticate, store and collaborate on platforms configured and operated elsewhere.

Owning the machine is not the same as governing what is done on it. This is the gap in AI national strategies, and it is a strange one: a document can detail a university’s place in alliances and standards bodies while saying nothing about the systems its laboratories actually run on.

That silence is where sovereignty is conceded – the identity platform, the cloud tenancy, the data environment chosen years ago for convenience and never revisited, each one a governance decision made by default in favour of whichever vendor arrived first.

Here a distinction matters. The argument is not that universities should run national AI policy; they will not, and claiming otherwise would overclaim. The steering of AI – what gets funded, deployed, regulated, sold – runs through firms, ministries and capital, and the university sits at the periphery of that steering, despite the research and trained people it supplies to all of it.

Nor is the claim that universities will train frontier models; the capital required for state-of-the-art clusters has largely priced them out, and the foundational models of 2026 are built in private labs, not faculties.

But knowledge governance is a different function from strategic direction, and it is the one the strategies have left unassigned. No firm holds it. No ministry can manufacture it.

It lives, latent and unfunded, in the institutions that produce the open, public-interest knowledge a country cannot buy back once it has been ceded – the methods, the datasets, the trained researchers, the science that was never anyone’s product.

The pipeline view does not just undervalue the university; it leaves the governance function homeless.

Why this begins abroad

And here is the part the AI strategies invert most completely. Having decided that sovereignty is built by accumulating infrastructure inside one’s own borders, they treat international engagement as the channel through which dependency arrives – foreign cloud, foreign models, foreign recruitment – and route whatever ambition remains through trade missions and national firms. The university as an international actor in its own right disappears.

But the capacity these strategies want cannot be built behind a border. AI is possible at all only because of an open global knowledge system, in which researchers share methods and solve problems that belong to no single nation.

Knowledge governance worth the name, therefore, does not begin with domestic control and reluctantly admit collaboration; it begins with collaboration and builds control on top of it. International engagement is not a risk to sovereign AI. It is the precondition.

The instruments already exist, and they are institutional and international at once. The hardest gap for most countries is compute itself – the frontier clusters are scarce, expensive and, as the US restrictions on advanced chips to China have made plain, subject to control by whoever holds the supply.

But a nation that cannot build its own cluster is not therefore shut out, because the networks are what make scarce compute reachable and keep the data that runs on it under local terms.

RedCLARA connects the national research and education networks of Latin America, linking their universities to GÉANT in Europe, Internet2 in the United States, and partner networks in Africa – the UbuntuNet Alliance and WACREN among them.

Through that infrastructure it provides federated identity, dedicated high-speed circuits between laboratories, and secure environments for large-scale data exchange. AfricaConnect ties the continent’s regional networks into the same global fabric.

The logic is identical in each case: institutions that could never individually afford intercontinental cables or computing clusters pool their demand, build jointly, and meet dominant providers from greater collective strength – owning capacity rather than renting it.

Europe’s digital sovereignty

These networks are how nationally funded supercomputers are reached and allocated across institutions that could never each own one, and how the datasets those machines run on stay under terms a country sets rather than rents. They are the layer that makes sovereign compute usable, and the reason a country short on compute is not thereby short on sovereignty.

The Global North understands this perfectly when its own autonomy is at stake.

GÉANT, the body that operates Europe’s pan-continental research and education network, defines one of its strategic pillars as maintaining control over intercontinental connectivity in support of European digital sovereignty, and European policy analysts treat research-network infrastructure as a deliberate instrument for reducing dependence on US and Chinese suppliers.

Europe has gone further than rhetoric: EuroHPC pools national money into shared supercomputers, and the European Open Science Cloud builds the federated data layer to match. Most national AI strategies have not followed, even as their own universities sit as nodes in the same federated system and could be resourced to make it carry sovereign AI.

The point holds with most force where resources are scarce. For a wealthy country, these networks amplify a system that already works.

For an under-resourced one, they are the precondition for engaging the global system at all – a university without the capital to build its own compute can still work at the frontier as a node in a shared network, and cannot if it stands outside one.

That a university cannot afford a frontier cluster is the case for federation, not against it: pooled demand is how institutions reach compute none of them could buy alone, and the network is what keeps their data under local terms while they reach it.

So the instruction reverses depending on where you stand. The wealthy country is told international engagement is a dependency to manage; the under-resourced one finds it is the only road to the capacity in question.

For these countries the strategies are not merely incomplete but backwards: the collaboration they treat as a vulnerability is the single route to the sovereignty they say they want, because there is no domestic substitute for it to fall back on.

The harder truth

More collaboration is not automatically better.

The same OECD work that records the securitisation of science also records its cost: international collaboration has lost momentum after three decades of growth, and a chilling effect now pushes institutions to avoid flagged partnerships on thin guidance and researchers to steer clear of important but high-risk fields.

A blanket application of research security measures, the OECD warns, threatens the quality, productivity and integrity of the national research system. Sovereignty pursued through walls has well-documented failure modes.

The remedy is to build the instrument well, not to set it down.

The security-first case deserves a straight answer. That case runs as follows: open standards are how sensitive work bleeds to adversaries, so walls are a necessary quarantine. The answer is that federation governs one dimension of the problem and not the whole of it.

Interoperability and control are not opposites. Federated infrastructure is what makes selective control possible – data held in local custody rather than on a foreign vendor’s servers, access governed institution by institution, sensitive environments segmented from open ones on shared foundations.

It does not, on its own, address the parts of research security that have nothing to do with where data sits: researcher vetting, dual-use fields with direct military application, intellectual property that leaves through a person rather than a server. Those need their own instruments, and federation is no substitute for them.

But on the dimension it does govern, the logic holds: a country that runs its science on systems it does not control has no quarantine to offer; it has already exported the thing it means to protect. The choice is not between openness and security. It is between governing the terms of exposure and not knowing what they are.

That distinction sets the two kinds of sovereignty apart. One breaks interoperability and isolates. The other leaves the shared foundations intact and governs what is built on them – global connectivity on locally governed terms, which is the footing sovereign AI actually requires. The remedy is not less internationalisation but internationalisation built for equity rather than extraction.

That is the version of sovereignty these strategies keep missing. They locate it in infrastructure they can announce and capital they can attract, and treat universities as suppliers and international engagement as a threat to manage.

Buying technology is the visible move. The decisive work is institutional and, paradoxically, external: universities capable enough, connected enough and trusted enough to operate at the frontier on terms they help set.

Sovereignty in a domain with little respect for borders is not won by building higher ones. It is won by science systems that can collaborate globally while governing locally – a capacity that does not begin at home, and that lives, in every country now drafting one of these strategies, in the institutions those strategies have reduced to a pipeline.

Carlos Vargas is the founder of Societas Partnerships, a higher education advisory firm based in Panama City, and the author of a technology profile on connectivity and digital sovereignty in the Global South written for the International Science Council’s Centre for Science Futures. He previously spent 14 years in senior internationalisation roles at the University of Toronto, Carleton University and the University of Calgary in Canada.

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CMU-Q Grads Stay Behind to Build Qatar’s Future

CMU-Q Grads Stay Behind to Build Qatar’s Future

Jun 26, 2026

This modern architectural passageway in Doha, Qatar, showcases unique designs and vivid colours.  by Natalya Rostun via Pexels. CMU-Q Grads stay behind and go through it to build their own future and contribute to building Qatar’s Future

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‘95% of CMU-Q grads stay behind to build Qatar’s knowledge economy’

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Peter Alagos
CMU-Q Grads Stay Behind to Build Qatar's Future
Carnegie Mellon University in Qatar (CMU-Q) dean Michael Trick

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The country’s push towards a knowledge-based economy is gaining measurable ground, with nearly 95% of the university’s recent graduates choosing to remain and work in Qatar, according to Carnegie Mellon University in Qatar (CMU-Q) dean Michael Trick.

Trick told Gulf Times that building such an economy requires a full ecosystem rather than isolated components, and that Education City, Qatar’s universities, and CMU-Q itself collectively function as a talent pipeline for that transition.

“We now have two decades of graduates from CMU-Q, most of whom stay in Qatar and contribute to the knowledge economy. When we attend conferences, summits, and industry events within Qatar, we are proud to see so many of our alumni attending, presenting, networking, and leading the conversations,” Trick said.

He said the primary remaining gap is not structural but time-related, noting that a transformation of this scale cannot happen overnight.

Asked about the sectors most ripe for disruption in the next five years, Trick said any discussion on disruption must start with artificial intelligence (AI), which he described as capable of fundamentally transforming industries through the optimisation of core business processes.

He said Qatar is already seeing innovation-led disruption across education, energy, food security, and sports. “In the area of sports and large-scale sporting events, Qatar has the potential to lead globally through technological innovation,” Trick noted.

On whether Qatar is producing enough homegrown entrepreneurial talent, Trick distinguished two models for meeting workforce demand. The first, he explained, involves paying foreign firms a premium to set up a temporary presence — a model that was essential when Qatar’s educational system could not yet keep up with demand. The second model, which he described as more organic, is education-led.

“Through significant investments in higher education, Qatar attracts exceptional minds, both Qatari and international. Our students are exceptionally gifted, and often the top students in their schools and home countries,” he said.

Trick said international students who come to study in Qatar often choose to stay after graduating, drawn by four years of growing attachment to the country. “They want to stay, and they hope to make a lasting economic impact,” he said.

He added: “This second model takes longer, but it is a more organic approach: introduce brilliant young people to a country that values the development of human capital, foster their connection to Qatar, encourage their entrepreneurial aspirations, and allow them to build their futures here.”

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Transforming the Middle East’s Energy Landscape with AI

Transforming the Middle East’s Energy Landscape with AI

Jun 21, 2026

Rooftop air conditioning units on a gravel surface with a mountainous backdrop under a clear sky. by PURPLE24 via Pexels

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Intelligent sustainability and resilience: Transforming the Middle East’s energy landscape with AI

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ME PoV Spring 2026 issue

Deloitte – 21/06/2026

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Intelligent sustainability and resilience
Download PDF (358KB)View PDF

Navigating complexity in the Middle East energy sector

The Middle East holds a unique and influential position in the global energy landscape. Long regarded as the world’s hydrocarbon powerhouse, the region now stands at a strategic crossroads. National visions across the Middle East are increasingly focused on diversifying energy portfolios, enhancing resilience, and embedding sustainability at the heart of energy systems. These ambitions signal a deliberate and strategic approach toward balancing economic growth, societal value, and environmental responsibility.

Recent geopolitical disruptions, such as the closure of the Strait of Hormuz, have exposed vulnerabilities in regional energy supply chains. At the same time, global climate commitments and sustainability mandates are redefining energy strategies. Challenges such as water scarcity, extreme heat, and the pressures of integrating renewable energy sources are adding further complexity. Modernizing transmission grids and improving energy efficiency are now urgent imperatives to ensure stable, adaptive, and secure supply.

Meeting these demands calls for innovative solutions capable of safeguarding operational continuity, reducing environmental impact, and supporting economic diversification. Artificial intelligence (AI) is emerging as a powerful enabler in this transformation. By harnessing AI-driven insights and technologies, Middle Eastern governments and energy companies can optimize operations, strengthen resilience, and accelerate the transition toward intelligent, adaptive energy systems that deliver value across economic, social, and environmental dimensions.

How can leaders harness AI to build resilience amid geopolitical uncertainty?

The recent disruptions in the Middle East region highlighted the challenges GCC oil and gas companies face in maintaining smooth operations amid geopolitical uncertainty, emphasizing the potential value of adaptive and resilient operational strategies. To navigate these complexities, leaders should consider prioritizing the deployment of scalable AI platforms that integrate diverse real-time data, from vessel locations and port capacities to shifting geopolitical risks, enabling dynamic rerouting of logistics, and supporting uninterrupted supply flows despite disruptions.

Investments should focus on modular AI models that enhance demand forecasting, inventory optimization, and operational scenario simulation. AI-driven demand forecasting, which combines data on energy consumption, refinery outputs, storage levels, and socio-economic factors, can provide accurate short-term predictions. This capability will help companies adjust production and distribution swiftly, reducing the risk of costly overproduction or stockouts during volatile market conditions.

AI-powered inventory management can monitor stock levels across refineries, terminals, and distribution hubs, recommending optimal allocation and replenishment schedules to prevent shortages and maintain continuity. Its ability to simulate disruption scenarios, such as partial port closures or workforce constraints, assists operators in prioritizing asset utilization, balancing efficiency with financial prudence.

Leaders should also explore investing in upskilling their workforce to interpret AI insights and fostering collaboration between IT and operational teams to facilitate seamless integration. Establishing ethical and transparent AI governance frameworks is equally important for building trust and ensuring compliance.

Pilot projects demonstrating quick wins, such as AI-enabled logistics rerouting or predictive maintenance, should be prioritized to build momentum and validate AI’s value. Strengthening cybersecurity to protect operational data remains additionally essential.

By considering these approaches, Middle Eastern energy companies have the opportunity to transform AI into a core enabler of intelligent, sustainable energy systems that are resilient to geopolitical shocks and aligned with economic and environmental objectives.

Advancing sustainability through intelligent energy systems

While operational resilience is vital, the Middle East’s energy sector is also undergoing a profound transformation driven by sustainability imperatives.

National strategies such as the UAE’s Energy Strategy 2050 and Saudi Arabia’s Circular Carbon Economy framework exemplify the region’s commitment to reducing emissions, expanding renewable capacity, and improving resource efficiency. These frameworks reflect a growing recognition that sustainability is central to energy sector success.

AI technologies are instrumental in realizing these goals. For example, AI-driven predictive analytics improve renewable energy forecasting by accurately anticipating solar and wind generation patterns. This reduces reliance on fossil fuels, enhances grid stability, and facilitates higher renewable penetration.

Beyond energy generation, AI supports efficient water management, critical in the arid Middle East, by optimizing usage and reducing waste. It also plays a key role in carbon capture and storage initiatives by helping monitor and manage emissions more effectively.

Importantly, AI enables data-driven policymaking and investment decisions. By providing granular insights into emissions, energy consumption, and economic impacts, AI helps design sustainability initiatives that are both impactful and economically viable. Practical applications such as predictive maintenance and digital twins reduce downtime and operational costs. AI-driven scenario modeling equips policymakers to evaluate trade-offs and benefits of different energy mixes and infrastructure investments, further cementing AI’s role as a strategic enabler of intelligent sustainability.

The era of intelligent sustainability: Integration, innovation, and inclusive growth

The energy sector is entering an era of intelligent sustainability, characterized by the seamless integration of advanced technologies, especially AI, that enable real-time optimization of complex energy systems. AI transcends operational efficiency to become a strategic enabler that balances energy security, emissions reduction, and economic diversification.

The success of this transformation depends on fostering ecosystems that promote innovation, collaboration, and transparency. Intelligent sustainability requires not only technological adoption but also a cultural shift towards data-driven governance and inclusive stakeholder engagement. This holistic approach ensures energy systems that are resilient, equitable, and aligned with long-term national and global goals.

Workforce development and community engagement are evolving to become more inclusive and scalable. AI facilitates workforce transitions by identifying skills gaps and tailoring training programs, helping to prepare employees for new roles in a green economy. Simultaneously, AI enhances community engagement through transparent reporting and impact measurement, ensuring that the benefits of the energy transition are broadly shared and contribute to social stability alongside economic progress.

Forward-looking organizations are already investing resources to equip their employees and the communities they work with on green skills and technology, recognizing the interconnection between the two. An example of this future-focused investment is Deloitte’s Green Skills for a Green Economy training program, developed in collaboration with the Institute of Sustainability and Environmental Professionals (ISEP), which has equipped to date thousands of corporate and academic professionals in the Middle East, with the skills needed to thrive in the transition to a more sustainable future.

A call to leadership: Seizing the AI-driven opportunity for sustainable energy transformation

The next five years will be critical for the Middle East’s energy sector. Integrated AI-driven solutions will play an essential role in balancing energy security, sustainability, and economic diversification.

According to the 2025 Deloitte Global C-suite Sustainability Report, 83% of global executives increased sustainability investments in the preceding year. Leaders recognize the business case and related benefits from corporate sustainability efforts, with revenue generation being the most frequently cited business benefit across a range of sustainability actions. Furthermore, AI and data analytics are emerging as central tools to meet emissions targets and boost operational efficiency.

For Middle Eastern economies, this presents a transformative opportunity: leveraging AI to optimize energy production and consumption, strengthen grid stability, reduce carbon intensity, and enable more agile and intelligent energy systems. Technologies like predictive maintenance, digital twins, and AI-driven scenario modeling are already reducing downtime, lowering costs, and enabling smarter policymaking.

However, technology alone will not determine success. Organizations that lead in this new era will be those that embed AI strategically across their operations, invest in digital infrastructure and workforce capabilities, and establish strong and ethical governance.

The time to move from ambition to action is now. Those who lead this transformation will not only secure their organizations’ competitive advantage but also position the Middle East as a global exemplar of intelligent sustainability in energy, delivering lasting value for their nations and the world.

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By Amro Suleiman, Director, Technology & Transformation, Artificial Intelligence & Data and Rybale Al Hage, Senior Manager, Corporate Responsibility & Sustainability Lead, Deloitte Middle East 

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Riyadh Metro Finally: The Snøhetta Station

Riyadh Metro Finally: The Snøhetta Station

May 18, 2026

Cityscape of Riyadh with busy streets and modern skyscrapers on a sunny day. by Fahad Puthawala via Pexels

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Riyadh finally has a metro, and its symbol is the Snøhetta station

The new Riyadh metro station is set to transform the Al-Qiri transport hub. Designed by Snøhetta, it features a large reflective canopy, bright underground spaces, and an underground garden intended to serve as a new urban public square. Snøhetta talks to Domus about the project.

This article was previously published in Domus 1112, May 2026.
As one of four main hubs in the Saudi capital’s new metro system, connecting two of the main metro lines, the station in the his toric Al-Qiri district is designed as an open urban and pedestrian plaza with a large stainless steel canopy that acts as an urban periscope.

The station levels are visually linked by the mirror-like overhang structure that reflects the outside inwards and the inside outwards, while also directing natural light into the underground station and providing shade to the surrounding public areas.
Qasr Alhokm Metro Station, Snøhetta, Riyadh, 2025. Photo Iwan Baan
The steel canopy serves as the focal point and marks the station’s main entrance. The supporting steel space frame allows the canopy to extend above and beyond its base to form a massive cone wall. Beneath ground level, the sloping interior walls are finished with a rendered surface inspired by the ar ea’s traditional architecture. Acting as both a unifying architectural element and a point of orientation within the building, the steel canopy also reflects indirect sunlight down wards from its mirror-like surface.

 Designed to create subtle glimpses between the different sections of the station, the patterned openings – formed by 326 tri angular carvings in three different sizes – al so filter light gently into the atrium.

When passengers step off a train and look up, they see a 360-degree view of the ur ban landscape reflected on the underside of the canopy, giving them an immediate pic ture of where they are in the city. Likewise, people arriving from the city can look up to the canopy and see a mirrored reflection of everything happening below. The two metro lines traverse the open space within trans parent tubes, creating a striking visual pres ence and enhancing wayfinding throughout the station. The platforms are also each en capsulated within glazed tubes that pro trude into the atrium void, allowing a seam less integration between interior and exte rior, and opening the platform areas to the grandeur of the atrium for both arriving and departing travellers.
Qasr Alhokm Metro Station, Snøhetta, Riyadh, 2025. Photo Iwan Baan
At the base of the atrium, at around 35 metres below city level, an accessible garden helps to maintain a temperate environment even during the hot summer periods. Wa ter for irrigation is collected from the paved plaza areas and canopy above. The new pla za and garden further strengthen the public realm, providing valuable shared spaces for the nearby communities.With respect for the station’s historic setting, the inner atrium walls are adorned with a window-cut pattern inspired by tradi tional Najdi motifs, echoing the architectur al character of the surrounding neighbour hoods.
Qasr Alhokm Metro Station, Snøhetta, Riyadh, 2025. Photo Iwan Baan
Designed to create subtle glimpses between the different sections of the station, the patterned openings – formed by 326 tri angular carvings in three different sizes – al so filter light gently into the atrium.
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Read also: Domus 1112 hits the shelves
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