Opportunities arising from Middle East’s Asian pivot

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The Middle East has always been considered an energy exporter to Asean, but this relationship has become more nuanced in recent years, especially as the former has shifted its focus to boosting non-oil exports.

Notably, countries such as Indonesia and Singapore have benefited.

Late last year, the Indonesian government announced they had secured US$32.7 billion worth of investment commitments from United Arab Emirates (UAE) businesses in various sectors, such as vaccine manufacturing and distribution.

“Indonesia is a very typical case of how I think Asean is becoming a magnet for foreign direct investment (FDI) from the Gulf countries,” said Gyorgy Busztin, a visiting research professor at the Middle East Institute, National University of Singapore.

Dr Busztin cited Asean’s political stability (outside of Myanmar) as well as a general lack of labour unrest as key factors that draw these Gulf countries to the region, even as he qualified that these countries have to be looked on a case-by-case basis.

“Compatibility, stability, and predictability, which are, of course, combined with the presence of a large, young, and highly trained workforce – it all comes together very nicely.”

Singapore too has benefited from the relationship.

A spokesperson from the Singapore Business Council, Qatar, noted that with Qatar is diversifying its economy away from oil and gas as part of its National Vision 2030, some of the key sectors they are looking at include sustainability and technology.

These are sectors in which Singapore has strong capabilities, he said.

“This makes businesses that wish to expand outside of the Middle East region look to Singapore as one of the key destinations to explore opportunities and use it as a base to springboard into the wider region due to its strategic location and easy access from the Middle East,” he said.

Alessandro Arduino, principal research fellow at the Middle East Institute at the National University of Singapore, added: “Expertise from Singapore will be beneficial to development in the Gulf and at the same time, can increase profitable cooperation between the Gulf and South-east Asia in areas ranging from artificial intelligence to Internet of Things, and smart cities.”

Leveraging Asean’s strengths

Economic ties between the Middle East and Asean have strengthened significantly since the first Asean-GCC Joint Vision was adopted in 2009.

In 2019, the two blocs further agreed to finalise the Asean-GCC Framework of Cooperation for 2020-2024 to advance collaboration in multiple sectors including smart cities, energy, connectivity, agriculture and halal products. Bilateral partnerships between individual countries have also risen.

The Singapore-UAE Comprehensive Partnership (2019) and the Malaysian Investment Development Authority’s (MIDA) MoU with the Investment Promotion Agency of Qatar (2019) are notable examples.

Heidi Toribio, Regional Co-head, Client Coverage, Asia, Corporate, Commercial and Institutional Banking at Standard Chartered

Heidi Toribio, regional co-head, client coverage, Asia, corporate, commercial and institutional banking at Standard Chartered, said: “As countries across the Middle East diversify into new non-oil sectors, Asean is emerging as an important trade and investment destination.”

In 2020, investments from the Middle East into Asean reached US$700 million, a three-fold growth from 2017. In the first three quarters in 2021 alone, merchandise imports to Asean from the Middle East grew more than 30 percent year-on-year, reaching US$52 billion in value, she noted.

According to a survey of Middle Eastern companies commissioned by Standard Chartered and prepared by PricewaterhouseCoopers, 82 per cent of Middle East respondents expect more than 10 per cent growth in their Asean business revenues this year.

They identified access to the large and growing Asean consumer market (60 per cent); access to a global market (from Asean) enabled by a network of Free Trade Agreements (58 per cent); and diversification of production footprint (51 per cent) as key reasons why they are interested in the region.

The Regional Comprehensive Economic Partnership (RCEP) is also expected to attract more investments; all of the respondents agreed that the ratification of the agreement will lead to more investments from their company. Close to 70 per cent said they expect their company to increase investments by more than 50 per cent over the next 3-5 years.

In terms of geographical preference, respondents chose Malaysia (78 per cent), followed by Singapore (69 per cent) and Indonesia (67 per cent).

Of those who picked Singapore, 94 per cent of the senior executives from the 45 companies based in the Middle East said they consider the city-state a major regional R&D/innovation centre.

A further 87 per cent said Singapore is a desirable hub for regional procurement and that Singapore is an ideal place to set up their regional sales and marketing headquarters.

Finding new growth opportunities

The report identified 5 growth sectors which it expects to drive the future of the Middle East-Asean corridor. They are namely refining and petrochemicals; infrastructure and real estate; renewable energy; retail and consumer goods; and digital infrastructure and services.

Perhaps unsurprisingly, consumption of fuels and petrochemicals continues to grow strongly in Asean, driven by rising consumer and industrial demand. To address energy security concerns, the region is also now focusing on boosting local production capacity by building integrated refining and petrochemical facilities.

Similarly, rapid economic and social progress have accentuated Asean’s infrastructure needs.

“The infrastructure segment will continue to dominate the construction industry, maintaining a 46 per cent share in sector GVA (gross value added) by 2025, followed by commercial real estate (32 per cent) and residential real estate (22 per cent),” said the report.

“In particular, demand for healthcare and transport infrastructure as well as logistics and industrial real estate are expected to drive growth, which is creating new investment and business opportunities for Middle East companies.”

Separately, demand for digital solutions and enabling digital infrastructure is expected to see significant growth. Indeed, the region’s flourishing digital start-ups are increasingly attracting capital from leading investment firms globally, including many from the Middle East.

In terms of more nascent sectors, Asean nations are increasingly prioritising solar and wind solutions to meet their future energy requirements. Retail and consumer goods sector in Asean is also expected to regain momentum in the years ahead, led by an expected surge in consumer spending.

 

 

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Sustainability actions speak louder, says Oracle study

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TECHWIRE ASIA looks like yet another media to confirm that Sustainability actions speak louder, all per an Oracle study.

When it comes to sustainability, how much action is actually taken, given the efforts announced today? While organizations continue to make sustainability announcements and find ways to reduce their carbon emissions, the reality is, that people are fed up with the lack of progress society is making toward sustainability and social initiatives.

According to the No Planet B study by Oracle and Pamela Rucker, CIO Advisor and Instructor for Harvard Professional Development, people want businesses to turn talk into action, and believe technology can help businesses succeed where people have failed. The study involved more than 11,000 consumers and business leaders across 15 countries, including  500 from Singapore.  

The statistics from Singapore show an increasing demand for businesses to step up sustainability and social efforts. In fact, 97% believe sustainability and social factors are more important than ever with 95% also believing that society has not made enough progress.

About half of the respondents attribute the lack of progress to people being too busy with other priorities with 39% believing people are just too lazy or selfish to help save the planet. 53% also believe businesses can make more meaningful changes on sustainability and social factors than individuals or governments alone.

Interestingly, 92% believe businesses would make more progress towards sustainability and social goals with the help of AI, and 62% even believe bots will succeed where humans have failed. For business leaders, they are aware that sustainability efforts are critical to corporate success and even trust bots over humans alone to drive sustainability and social efforts.

As such, 97% of business leaders would trust a bot over a human to make sustainability and social decisions. They believe bots are better at predicting future outcomes based on metrics/past performance, collecting different types of data without error, and making rational, unbiased decisions.

At the same time, business leaders also believe people are still essential to the success of sustainability and social initiatives and believe people are better at educating others on the information needed to make decisions, implementing changes based on feedback from stakeholders, and making context-informed strategic decisions.

Sustainability actions lauded

Another interesting highlight from the survey showed that people will cut ties with businesses that don’t take action on sustainability and social initiatives. Simply put, businesses need to prioritize sustainability and social issues and rethink how they use technology to make an impact, or risk facing major consequences.

The report also showed that if organizations can clearly demonstrate the progress they are making on environmental and social issues, people would be more willing to pay a premium for their products and services, work for them, and invest in their companies. Business leaders understand the importance and urgency with 95% believing sustainability and societal metrics should be used to inform traditional business metrics. 93% also want to increase their investment in sustainability.

For Pamela Rucker, CIO Advisor and Instructor for Harvard Professional Development, the events of the past two years have put sustainability and social initiatives under the microscope and people are demanding material change. While there are challenges to tackling these issues, Rucker pointed out that businesses have an immense opportunity to change the world for the better.

“The results show that people are more likely to do business with and work for organizations that act responsibly toward our society and the environment. This is an opportune moment. While thinking has evolved, technology has as well, and it can play a key role in overcoming many of the obstacles that have held progress back,” added Rucker.

Juergen Lindner, senior vice president, and CMO, Global Marketing SaaS at Oracle also commented that while business leaders understand the importance, they often have the erroneous assumption that they need to prioritize either profits or sustainability.

“The truth is this is not a zero-sum game. The technology that can eliminate all the obstacles to ESG efforts is now available, and organizations that get this right can not only support their communities and the environment, but also realize significant revenue gains, cost savings, and other benefits that impact the bottom line,” said Linder.

Can Dubai be the next Silicon Valley technology hub?

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The Arabian Business tells us a story about the ongoing trends in high-tech businesses, technological innovation and the use of social media in the Emirate, wondered if Dubai can be the next Silicon Valley technology hub?

The emirate provides those in the Web 3 space with the ‘perfect balance of work and fun,’ making it attractive for talent, said the 26-year-old co-founder of interactive short video platform Vurse

Originally intending to stay in Dubai for only 12 days, Shadman Sakib ended up “falling in love” with the city and choosing it to launch his interactive short video platform Vurse from, set for the second half of 2022.

Vurse will be one of the first deep tech companies to come out of the Middle East and 26-year-old Sakib said Dubai “has so much potential and can become the next Silicon Valley.”

“We just have to fine-tune people’s mentality on a deep tech perspective and once that happens, the sky is the limit. For us people in the Web 3.0 space, we really want a nice balance between fun and work and Dubai really has the capability to provide both,” said Sakib.

“We are in the process of hiring our team members from across the world and it is actually much easier for us to attract them being based here in Dubai versus other cities because of the fine balance between work and life, plus the entertainment aspect. This is why we chose Dubai and we feel like it is going to be our long-term home,” he continued.

Shadman Sakib, Tech Entrepreneur

Sakib believes Vurse’s growth will translate into the growth of Dubai in the deep tech and Web 3.0 space, giving the example of how the presence of the big tech companies in San Francisco led to the development of the American state’s tech reputation.

“Dubai is one of the smartest cities in the world. You go to the airport and immigration is done in minutes, not many cities in the world can compete with that kind of technology,” explained Sakib.

“It is therefore high time we have a homegrown company that goes beyond the traditional businesses we have in this city. Traditional companies can only grow so far versus the companies in deep tech or Web 3 space – especially the ones with proper resources – where the sky is the limit; you have the whole world to play with,” he continued.

How Sakib got into tech and conceived of Vurse

Sakib grew up in Bangladesh and says he was “pretty much of an underdog,” for most of his life, recounting how he dropped out of his undergraduate studies in the US before moving to the UK where he again pursued his studies while working as a waiter on the side.

Lying on his couch one day and playing with his phone Sakib wondered why he was using someone else’s product instead of developing a product that people could use.

“I was 20 years old at the time and while my peers were focused on enjoying life, I was consumed with finding a purpose for mine,” he recalled.

“My philosophy was all about being determined that I would have a strong footfall by the time my friends finish university so that they would come to me and ask for a job,” added Sakib.

Sakib believes Vurse’s growth will translate into the growth of Dubai in the deep tech and Web 3.0 space

Having no background in technology, Sakib talked to a few of his friends and contacts in the app design space but was frustrated with the ideas they came up with as they were a copy of what already existed.

“I wanted to look at how I can wow the customer or my user not recreate the same thing – I wanted to build something different,” explained Sakib. As such, he taught himself coding before meeting the co-founder of Vurse who is a “coding genius.”

It is within this context that the idea of Vurse came about to take the social media experience into the Web 3 space and give content creators ownership over their content rather than having a platform control that.

“Our target is to make the content creators bigger because once they are a big brand themselves, a similar effect will happen to the company itself,” explained Sakib.

“My co-founder and I have been wanting to work on a consumer-facing product for some time now because that is where we think the main fun is. We want to understand the newer generations that are coming up and their culture. We also want to understand the music industry very well,” he continued.

As such, Sakib has delegated his other businesses to fully focus on Vurse, a business he self-funded. And while he declined disclosing much information about Vurse itself, he said it is built on three verticals: a content creator marketplace where people will be able to trade NFTs, a short video platform and the AI verse, a self-created metaverse within the platform.

“The metaverse will stay but the way we see and think of it will change. Currently, you have to have a specialised device to access the metaverse which restricts access somehow,” said Sakib.

“Once the technology catches up to the extent that it is easily accessible to anyone anywhere, then the real game begins,” he continued.

Developing countries are being left behind in the AI race

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Developing countries are being left behind in the AI race in spite of what is constantly vented out by the local media in the MENA region.

Developing countries are being left behind in the AI race – and that’s a problem for all of us

By Joyjit Chatterjee, University of Hull and Nina Dethlefs, University of Hull

Artificial Intelligence (AI) is much more than just a buzzword nowadays. It powers facial recognition in smartphones and computers, translation between foreign languages, systems which filter spam emails and identify toxic content on social media, and can even detect cancerous tumours. These examples, along with countless other existing and emerging applications of AI, help make people’s daily lives easier, especially in the developed world.

As of October 2021, 44 countries were reported to have their own national AI strategic plans, showing their willingness to forge ahead in the global AI race. These include emerging economies like China and India, which are leading the way in building national AI plans within the developing world.

Oxford Insights, a consultancy firm that advises organisations and governments on matters relating to digital transformation, has ranked the preparedness of 160 countries across the world when it comes to using AI in public services. The US ranks first in their 2021 Government AI Readiness Index, followed by Singapore and the UK.

Notably, the lowest-scoring regions in this index include much of the developing world, such as sub-Saharan Africa, the Carribean and Latin America, as well as some central and south Asian countries.

The developed world has an inevitable edge in making rapid progress in the AI revolution. With greater economic capacity, these wealthier countries are naturally best positioned to make large investments in the research and development needed for creating modern AI models.

In contrast, developing countries often have more urgent priorities, such as education, sanitation, healthcare and feeding the population, which override any significant investment in digital transformation. In this climate, AI could widen the digital divide that already exists between developed and developing countries.

The hidden costs of modern AI

AI is traditionally defined as “the science and engineering of making intelligent machines”. To solve problems and perform tasks, AI models generally look at past information and learn rules for making predictions based on unique patterns in the data.

AI is a broad term, comprising two main areas – machine learning and deep learning. While machine learning tends to be suitable when learning from smaller, well-organised datasets, deep learning algorithms are more suited to complex, real-world problems – for example, predicting respiratory diseases using chest X-ray images.

Many modern AI-driven applications, from the Google translate feature to robot-assisted surgical procedures, leverage deep neural networks. These are a special type of deep learning model loosely based on the architecture of the human brain.

Crucially, neural networks are data hungry, often requiring millions of examples to learn how to perform a new task well. This means they require a complex infrastructure of data storage and modern computing hardware, compared to simpler machine learning models. Such large-scale computing infrastructure is generally unaffordable for developing nations.

The developed world has an inevitable edge in the AI revolution. MikeDotta/Shutterstock

Beyond the hefty price tag, another issue that disproportionately affects developing countries is the growing toll this kind of AI takes on the environment. For example, a contemporary neural network costs upwards of US$150,000 to train, and will create around 650kg of carbon emissions during training (comparable to a trans-American flight). Training a more advanced model can lead to roughly five times the total carbon emissions generated by an average car during its entire lifetime.

Developed countries have historically been the leading contributors to rising carbon emissions, but the burden of such emissions unfortunately lands most heavily on developing nations. The global south generally suffers disproportionate environmental crises, such as extreme weather, droughts, floods and pollution, in part because of its limited capacity to invest in climate action.

Developing countries also benefit the least from the advances in AI and all the good it can bring – including building resilience against natural disasters.

Using AI for good

While the developed world is making rapid technological progress, the developing world seems to be underrepresented in the AI revolution. And beyond inequitable growth, the developing world is likely bearing the brunt of the environmental consequences that modern AI models, mostly deployed in the developed world, create.

But it’s not all bad news. According to a 2020 study, AI can help achieve 79% of the targets within the sustainable development goals. For example, AI could be used to measure and predict the presence of contamination in water supplies, thereby improving water quality monitoring processes. This in turn could increase access to clean water in developing countries.

The benefits of AI in the global south could be vast – from improving sanitation to helping with education, to providing better medical care. These incremental changes could have significant flow-on effects. For example, improved sanitation and health services in developing countries could help avert outbreaks of disease.

But if we want to achieve the true value of “good AI”, equitable participation in the development and use of the technology is essential. This means the developed world needs to provide greater financial and technological support to the developing world in the AI revolution. This support will need to be more than short term, but it will create significant and lasting benefits for all.

Joyjit Chatterjee, Data Scientist (KTP Associate), University of Hull and Nina Dethlefs, Senior Lecturer in Computer Science, University of Hull

This article is republished from The Conversation under a Creative Commons license. Read the original article.