TLDR: A new report by the International Labour Organization (ILO) indicates that digitalization and artificial intelligence (AI) could significantly enhance job creation and economic growth in Arab States. However, realizing these benefits hinges on implementing inclusive policies and strategic investments to mitigate disparities, particularly for women, youth, and older workers, and to ensure a just transition across all sectors.
BEIRUT – A comprehensive new report from the International Labour Organization (ILO), titled ‘Navigating the Digital and Artificial Intelligence Revolution in Arab Labour Markets: Trends, Challenges and Opportunities,’ projects a largely positive outlook for employment and economic growth across Arab States, driven by the accelerating adoption of digitalization and artificial intelligence. Released on September 22, 2025, the study underscores that while these technological shifts present immense opportunities, their successful integration requires deliberate and inclusive management to prevent widening existing inequalities.
The report highlights that by 2035, AI integration alone could inject an additional US$14.1 billion into the region’s GDP and lead to a net creation of 118,000 new jobs. This optimistic forecast is based on the premise that technology will primarily augment human work rather than simply replace it. The ILO estimates that nearly 14.6% of jobs, approximately 8 million positions, are poised to benefit from AI-driven augmentation, where AI enhances human capabilities and productivity. In contrast, a smaller proportion, around 2.2% of jobs or 1.2 million positions, are identified as being at risk of full automation by generative AI.
However, the impact of this digital revolution is not expected to be uniform across all sectors and demographic groups. Sectors such as construction, transport and storage, teaching, personal services, and engineering are anticipated to experience net employment gains. Conversely, jobs in public services, basic manufacturing, retail, and routine clerical work may face declines.
Demographic disparities are a significant concern raised by the report. Women, for instance, face a higher risk of automation, with 5.3% of female-held jobs vulnerable compared to 1.6% for men, largely due to their concentration in clerical roles. Yet, women also stand to gain substantially from AI augmentation, with 22.7% of their jobs potentially enhanced, compared to 13% for men. Youth aged 15–24 are more likely to benefit from new tech-driven occupations, while older workers over 55 face greater challenges in reskilling and thus higher risks of exclusion. Other vulnerable groups, including low-skilled workers, migrants, refugees, and persons with disabilities, also require targeted support to ensure they are not left behind in this transition.
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Ruba Jaradat, ILO Regional Director for Arab States, emphasized the critical role of policy in shaping these outcomes. “Digitalization and AI adoption in the labour market do not have to imply job destruction in the Arab States region,” Jaradat stated. “The real benefits can only be realized if governments, employers, and workers take deliberate steps to make the transition inclusive and fair.” The report advocates for robust policy actions, including significant investments in digital infrastructure, initiatives to bridge the digital divide, especially in rural and conflict-affected areas, and the development of comprehensive legal and regulatory frameworks. Furthermore, it stresses the importance of fostering skills development, providing social protection, supporting small enterprises, and enhancing regional cooperation to navigate this transformative era successfully.
