The Financial and Economic Transformation of the Global Governments


Modern technologies are widely used in various spheres of life not only by businesses but also by governments as a means to enhance financial and economic areas. Artificial intelligence (AI) is recognized in the professional literature as subversive since its introduction requires a change in the business model when it comes to human activities. For instance, the platform providing taxi services without intermediaries such as Uber and the technical model of functioning that is rebuilt into an autonomous automatic mode of operation of unmanned vehicles may be noted. Using these concepts, many countries have come to the conclusion that there is a need to integrate AI and IT-technologies into the system of state management of the national economy. In other words, the creation of digital economy is declared as paramount, which, ultimately, is likely to contribute to improving the functioning of governments and increase the quality of life of their citizens.

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This proposal aims at discussing the need to conduct a research on the role of AI in the Financial and Economic Transformation of governments, focusing on the United Arab Emirates (UAE) as a country that invests a lot in the mentioned technology. Since AI remains unexplored in terms of economic relations, it is of great importance to understand its potential strengths and weaknesses in meeting the future goals set by the UAE’s Vision 2030 and Vision 2050. At the same time, it will be proposed that another need is associated with determining strategies that can be applied to accelerate the adoption of AI in the Arab context and as a part of the global initiative. Based on the thorough literature review, the key trends and areas to be explored will be identified. As a result of the proposed study, it is expected to address all research questions and define some recommendations, thus contributing to both practice and theory of AI implementation on the governmental level.

Literature Review

Intellect is a common ability to recognize and resolve problems, which unites all cognitive abilities of a person, including sensation, memory, thinking, perception, representation, and imagination. In the early 1980s, Barr and Feigenbaum, scientists working in the field of the theory of computing proposed the following definition of AI: “ is an area of computer science concerned with designing intelligent computer systems’ that is, systems that exhibit the characteristics we associate with intelligence in human behavior” (Rajasekaran and Vijayalakshmi Pai 1). Later, AI began to include a number of algorithms and software systems, the distinguishing feature of which is that they can do some tasks as the person reflecting on their decision would do. The basic properties of AI are language understanding, learning, the ability to think and, importantly, act. Many countries are increasingly resorting to the use of new technologies to launch such products as e-passports, the flow of documents on the block chain, or biometric identification of people.

The review of the evidence shows that there are a lot of areas, the operation of which can be enhanced due to AI. For example, the identified technology can suggest political decisions based on the opinions of residents of a particular country. At the moment, to understand the needs and wishes of citizens, it is necessary to spend a lot of time on surveys and research. With the help of AI, it is possible to simplify data collection and automate a particular part of the processes, which is likely to save both time and finances, as it can be seen on the examples of Jakarta and Singapore. Another essential area is security as one of the forms of using AI is the prediction of crimes. For instance, the algorithm can predict where the prerequisites for a crime may appear, which, in turn, will reduce the number of robberies and other illegal acts – such systems exist in New York, Chicago, and Los Angeles (Cath et al. 518). They allow minimizing costs on criminal investigations, provisions on prisoners, et cetera.

Modern technologies are actively penetrating all spheres of society, and another example of this phenomenon is the introduction of software algorithms into the government workflow. In particular, while many governments have already finished it, others are only in the process of the transfer of the so-called paperwork to a protected system of information exchange and the creation of primary texts of draft laws by using machines. The goal of this digital upgrade is to reduce the time and material costs of working with documentation. In order to reduce paperwork, part of the tasks within the framework of legislative activity will be transferred to computers operating on the basis of machine learning technologies.

Companies are increasing investment in AI as they optimistically expect that AI technologies will benefit in the future. IT, telecommunications, customer services and the financial services sector, and commercial and professional services are the industries that are regarded as the ones that can bring the maximum effect of investment in AI. New product development and research, supply and production activities, as well as customer service are among those that are likely a maximum profit a result of investment in AI technologies. These tendencies are consistent with the data about the key directions of AI technologies’ investment, involving the quality of customer service, production optimization, and the elaboration of new products.

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In the UAE, AI is valued on the governmental level, and the Ministry of Artificial Intelligence was established in 2017. As stated by its head, Omar Bin Sultan Al Olama who was assigned to this post by Prime Minister of the UAE and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, AI is the way to achieve futuristic goals. Among the latter, it is possible to mention the idea to reach Mars in the nearest future, launch robot cops, and present autonomous and safe vehicles. It should be stressed that no one country except the UAE has a similar department that is wholly directed to the development and implementation of AI-driven products. All these efforts are aimed at making the UAE and, in particular, Dubai city the most updated place that uses AI and received corresponding benefits.

The visions and missions of the UAE were disseminated to the public, while their accomplishment is regarded as a national objective. The perspective plan of the government of the UAE known as the Vision 2030 includes economic diversification, reduction of dependence on oil and gas, and the rapid development of such areas as education, healthcare, media, logistics, aerospace, renewable energy, and tourism (“Future”). These strategic areas need qualified specialists along with properly developed technologies that can assist people in performing both their daily routines and creating innovative ideas. By 2030, solar panels should appear on the roofs of all Dubai buildings. Such batteries can officially be installed in Dubai since 2015, consuming the energy they produce and sell its surplus to the city grid, thus reducing the need for electricity in Dubai by 30 percent based on energy-saving technologies. The Dubai International Financial Center (DIFC), the Dubai Civil Defense Authority, and the Dubai Airport Free Economic Zone signed the corresponding contracts.

One more goal stated by the Vision 2050 is to set an ambitious goal to launch the UAE Energy Strategy 2050 to increase clean energy consumption by 50 percent. In addition, the initiative aims to ensure that 75 percent of the total energy production will be generated from environmentally friendly sources. Dubai has set a goal to provide 75 percent of its total capacity with clean sources by 2050 (“Future”). Such goals also show that the eco-friendly approach will lead to decreased spending on environmental protection and purification of already polluted areas.

The main idea of utilizing AI in the UAE is related to the idea of ensuring a better life for future generations. One may, for instance, note the autonomous cops that are called to preserve safety and security of citizens by sending timely reports to people who control their work. In addition, the launch of special vehicles is likely to result in the reduction of accidents and congestion on the roads of the country followed by the lower operational costs. More effective traffic policies integrated into AI-driven vehicles will show when a car should stop and how it is better to select a highway to reach the desired destination. Dubai plans to increase the number of electric vehicles on the streets to 32 thousand by 2020, including 200 Tesla’s newest electric cars, which will soon start running around Dubai as a taxi (“UAE Strategy for Artificial Intelligence”). Smart pedestrian crossing with special sensors that read the movement of people and automatically adjust the remaining time of the green signal of the traffic light will ensure additional safety.

In general, the program developed by the Ministry of Artificial Intelligence may be represented by three levels, which in their close interaction affect the lives of the UAE citizens and society as a whole. These are markets and industries as areas of activity where specific subjects perform (suppliers, goods, and services) and platforms and technologies where competencies are formed for the development of markets and sectors of the economy (“UAE Strategy for Artificial Intelligence”). Also, the third element is an environment that creates the conditions for effective interaction between market entities and economic sectors and covers regulation, information infrastructure, personnel, and information security. All these three levels of the digital economy will not be able to properly form and function effectively without a government control.

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One of the most pivotal objectives is the creation of the ecosystem of the digital economy, in which digital data will be a key factor of the production in all areas of socio-economic activity and in which effective interaction will be ensured, including business, the scientific and educational community, the state, and citizens. In this connection, the need for the establishment of appropriate institutional and infrastructural conditions, elimination of existing obstacles and restrictions for the creation and development of high-tech businesses is evident. More to the point, the prevention of the emergence of new obstacles and restrictions both in traditional industries and in innovative fields should be targeted. By increasing competitiveness in the global market in various sectors of the economy, the UAE will be among the top countries that succeed in innovations.

In 2018, Forrester, an analytical company, published two studies in the field of AI, concluding that the human factor to automated processes is the core limitation that should be taken into account by companies and governments. The experts claim that when it comes to relationships directly with people, the picture changes (Press). Companies that, in their pursuit of profit, have introduced AI into their work, realize the truth already revealed by sociological research – automation is useful for a business only if it helps bring one closer to the client. Replacing a person with AI at the stage of a referral service or round-the-clock chat, there is a risk of encountering failure and low customer satisfaction (Press). The truth is that most people prefer human contact as they have been interacting with each other for thousands of years and, as it turned out, are not too inclined to change this model.

According to Forrester, the main lesson to be learned from this study is that in most cases people should not be completely excluded from the AI’s work cycle. Automation can be used to analyses the market and speed up customer support processes, but direct contact must be made by people. In a balanced relationship between AI and humans, automation will be used only as the first line of response, which is confirmed by research (Press). If customers are left without the opportunity to contact an experienced representative at any time, it becomes almost impossible to maintain an effective balance between the necessary automation and maintaining contact with people. In this regard, it is clear that economic and financial areas of the UAE should be explored in connection with AI to identify the strategies that will best fit into the specified context. Also, potential challenges and barriers to the successful implementation of AI in the UAE should be revealed based on the analysis of the available literature and research.

Conceptual Framework

Even though AI emerged more than two decades ago, it is still extremely difficult to define it as a concept due to its complexity. With regard to economic and financial transformation of the UAE, one may state that its trends, capabilities, and functions compose the conceptual framework. Therefore, the framework of the proposed study will be based on an in-depth investigation of AI and its functions in terms of the identified topic. AI allows preliminarily creating a knowledge base, including a body of knowledge from a particular area of human activity, and then solving practical problems involving this knowledge. The integration of past and new information leads to the reflection of key trends from the so-called weakly formalized subject areas, in which it is difficult to determine the input and output parameters of the problem.

In the proposed research, the economic and financial areas of the UAE will be explored before and after the introduction of AI in these sectors. More to the point, potential benefits of AI will be discussed on the basis of analyzing reports and other available data in order to determine the effectiveness of this technology. Accordingly, the goals set by the UAE’s visons will also be examined to identify whether they may be implemented in terms of AI or not. It is expected that the detailed analysis of initiatives set by Dubai and the UAE in general will contribute to better understanding of what strategies are needed. Another essential point is to pay attention to how economic and financial segments may be advanced to help accelerate the pace of the country’s development. The options presented in the literature will be discussed with regard to the desired outcomes planned by the UAE. Ultimately, some obstacles on the way to achieve the goals will be discovered, and recommendations to address them will be provided.

The proposed research will be conducted in terms of the digital transformation framework as the one that shows the aspects that are either met or missed by programs and projects. The abovementioned framework involves such components as customer experience, business models, and operational processes. Its strategic assets include product innovation, partnership, culture, knowledge, and so on. The main task of digital transformation is the creation of new business opportunities, and companies use it to implement adaptive innovations, find more efficient working methods, develop new business models, and provide radically new levels of customer service quality. Accordingly, the capabilities of AI regarding the UAE’s economic and financial sectors will be analyzed in terms of these issues, which demonstrate the overall potential of innovation.


A qualitative research design will be applied for the proposed study as it fully addresses the needs of the study. In particular, while quantitative research is based on the theory of statistics, qualitative research is rooted in exploring relations between phenomena. The latter takes a more flexible approach than structured questionnaires that serve as the basis for any quantitative analysis. Therefore, qualitative research concerns the study of motivation and understanding of a relationship, and how this attitude affects behaviors. Due to its internal flexibility, the qualitative design will stimulate creativity along with the development of ideas and concepts. Since the identified topic is too complex to get the answer “yes” or “no” to the main question, it is expected to provide more descriptive answers to research questions. At the same time, qualitative research methods are more independent of the sample size compared to quantitative methods: a literature review, for example, can get a meaningful result even with a small sample group.

For the proposed study, the literature review will be used as the key method of analysis – the study of articles and other academic and official works published on the specified problem. The goal of the literature review is to comprehend what was done on the topic previously. The concepts developed, the approaches of various scholars, the contemporary state of the topic, and the range of unsolved problems in the field will be discussed. A review of the literature will be conducted with the aim of designating a narrow question selected for the research. It is necessary to demonstrate the need for the examination of the issue and prove its relevance to the modern reality. Both differences and similarities in the theory and practice and their consistence with hypothetical assumptions, as well as inconsistencies and limitations will be revealed. Analyzing sources, weak points will be identified in the literature in order to detect previously unexplored issues.

Works Cited

Cath, Corinne, et al. “Artificial Intelligence and the ‘Good Society’: The US, EU, and UK Approach.” Science and Engineering Ethics, vol. 24, no. 2, 2018, pp. 505-528.

“Future.” Government, n.d., Web.

Press, Gil. “Forrester Predicts Investment in Artificial Intelligence Will Grow 300% in 2017.” Forbes, 2016, Web.

Rajasekaran, Sathish, and Ga Vijayalakshmi Pai. Neural Networks, Fuzzy Systems and Evolutionary Algorithms: Synthesis and Applications. 2nd ed., PHI Learning, 2017.

“UAE Strategy for Artificial Intelligence.” Government. 2018, Web.

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