In a world increasingly redefined by new classifications of developed and developing nations, the implications of the COVID-19 pandemic on the global labor market are becoming crucial to assess during the recovery phase. The pandemic emphasized the need for countries to implement effective frameworks and policies that facilitate the rapid adoption of digital technologies, enabling the management of processes digitally and allowing workers to operate remotely during lockdowns. Significant advancements in digital transformation and Artificial Intelligence (AI) have been reshaping global industries for decades, but the accelerating rate of innovations in AI is transforming the landscape of what constitutes “desirable” labor.
Generative AI developments, particularly OpenAI’s Large Language Model (LLM) ChatGPT, are helping companies and workers address the skills gap prevalent in developing economies. These innovations are improving productivity across traditional business functions and easing barriers to entry in high-demand technical roles. Workers are increasingly recognizing the opportunities afforded by new digital working conditions, with a growing supply of skilled labor to meet the rising demand. Fields such as cybersecurity, cloud computing, data analytics, and software development are already witnessing new job opportunities for workers with even minimal coding and data management experience, provided they are adaptable and committed to continuously developing their skills.
The quality of education will be a pivotal factor in whether local job markets can meet the employment demands of these essential fields. In Egypt, tech-based and tech-enabled businesses are competing to recruit top talent in software development while investing in the development of workers’ capabilities. However, insufficient investment in the education sector may exacerbate shortages that hinder the country’s labor demands if not addressed. In contrast, successful case studies of effective fiscal spending on education to foster technological innovation can be seen in the UAE and Saudi Arabia.
Both nations began investing heavily in the future capabilities and tech-readiness of their workforce in the early 2000s, with Saudi Arabia tripling its education budget allocation between 2000 and 2013. In the UAE, education consistently accounted for a significant portion of the state budget, with allocations reaching up to 20.5% in some years during the 2010s. These countries prioritized making their citizens competitive in international labor markets and focused on developing the skills of educators, recognizing that a well-educated workforce is vital for innovative economic diversification and competitiveness in a rapidly data-driven global economy.
The implications for growth underscore the need for structural reform, particularly in Egypt. Research by PWC Middle East indicates that Egypt could gain approximately $42.7 billion from AI adoption contributions to the economy by 2030. The Egyptian Ministry of Communication and Information Technology’s initiative, “The Digital Egypt Strategy for Offshoring Industry 2022-2026,” aims to capitalize on this potential by working to “triple export revenue from digitally-enabled offshoring services,” thereby providing highly skilled technical workers in automation and software development.
This initiative seeks to diversify economic activities and exports, create over 200,000 new job opportunities, and increase the inflow of much-needed foreign currency into the country. However, while upskilling enables some Egyptian workers to benefit from advancements and growing demand in technology, measurable benefits will still depend on government investments to ensure that workers in sectors disrupted by generative AI advancements—such as manufacturing, retail, and healthcare—are equipped with the necessary skills to utilize the latest technologies effectively. Moreover, facilitating a seamless evolution in labor market dynamics is essential, as roles increasingly shift toward more sophisticated tasks while generative AI automates routine functions.
While these steps are crucial for preparing regional economies for AI adoption, it is also vital to remain mindful of the neo-colonial dynamics governing modern global markets. Wealthier nations dominate AI and technological infrastructure, research, and patents, leaving developing nations reliant on foreign technology and perpetually playing catch-up. This dynamic allows developed nations to increase their influence over developing countries. Advanced AI capabilities will enable wealthier nations to dominate critical areas, further marginalizing developing countries and perpetuating an asymmetrical influence on global policy. Issues surrounding data sovereignty and privacy concerns are reinforcing the digital divide, while the exploitation of resources, including labor and data extraction by global corporations, requires urgent attention. Investing in homegrown talent, promoting local research initiatives, and developing strategic partnerships that emphasize knowledge transfer rather than mere technological adoption will be crucial for ensuring that developing nations do not remain passive consumers of technology.
Ultimately, Egypt’s projected growth relies on more than just the adoption of advanced technologies; it requires a comprehensive approach to workforce development, economic diversification, and infrastructure improvements. Without this holistic strategy, Egypt risks falling behind its regional counterparts. Ensuring that AI adoption benefits a broad range of industries is key to achieving long-term sustainable economic growth.
