Cairo
Source: Al-Wafd Newspaper
Prof. Dr. Ali Mohammed Al-Khouri
The construction sector is a cornerstone of economic development in the Arab world, representing between 6% and 10% of GDP in several countries, and even more so in the Gulf economies, which base their development strategies on large-scale urban investment. Despite the sector’s size and substantial investments, its performance remains below global averages, with persistent deviations from original implementation plans and high execution costs. These shortcomings stem from traditional work systems characterized by weak strategic planning, fragmented roles among implementing entities, excessive reliance on low-skilled labor, limited investment in technology and knowledge, and the absence of data-driven management systems that integrate project phases.
Economic studies confirm that the productivity of the construction sector globally has grown by less than 1% annually over the past two decades, lagging behind the growth rates of the industrial and service sectors. In the Arab region, the performance and productivity gap is even more pronounced due to weak integration between planning, financing, and implementation, the absence of accurate performance indicators, and a widespread reliance on individual decisions rather than analytical systems. These factors make technological transformation in Arab construction a strategic imperative that cannot be postponed.
Reports from global consulting firms, including studies by McKinsey, estimate that the artificial intelligence (AI) market in construction will reach approximately $9 billion by 2031, with an annual growth rate of nearly 22%. These reports also indicate that the application of digital technologies and AI could increase the productivity of the global construction sector by 10-15%. If this transformation were implemented at the same pace in Arab countries, it could translate to an increase in the sector’s added value of between $30 billion and $50 billion annually, given that the region’s construction market is estimated at $300-500 billion. This increase would not only represent additional financial gains but would also reflect a qualitative shift in the nature of the urban economy, transforming the construction sector from one driven by spending and expansion to one that produces knowledge and generates high-value employment opportunities.
In practice, artificial intelligence (AI) represents a technological tool and analytical system that can reshape decision-making mechanisms at all project stages. The use of digital modeling and predictive analytics allows for more accurate estimation of cost, duration, and risk, and reduces the likelihood of rework, which in some cases represents more than 10 percent of the total cost. Furthermore, computer vision technologies, drones, and sensors are contributing to improved safety at work sites and reducing accidents by 30-40 percent, according to international experiences. If these tools are implemented within organized institutional frameworks, they can transform the structure of economic performance in major Arab projects.
The success of this transformation depends as much on the regulatory environment as on the technology itself. The absence of clear data legislation, a shortage of technical expertise, and fragmented supply chains will be major obstacles to modernization. Furthermore, many digitization initiatives fail because strategic visions are not translated into comprehensive implementation plans. Overcoming these challenges requires a redesign of the relationship between government entities, the private sector, and the professional community, so that data becomes a public resource and digital standards a legal obligation.
Public policies should include three main pillars. First, building a digital infrastructure for major projects based on Building Information Modeling (BIM) and data integration between the owner, contractor, and designer. Second, developing a legislative framework that regulates the use of artificial intelligence in projects and ensures the protection of information and digital property rights. Third, preparing training and qualification programs for engineers and technicians on the use of modern analytical tools, thus transforming the workforce from repetitive executive tasks to analytical and creative ones.
The smart transformation of the construction sector can achieve tangible economic savings in cost, time, and execution quality, and bolster the competitiveness of national companies in regional and global markets. However, its most significant impact lies in building a new institutional foundation based on knowledge and analysis, rather than traditional management. Data-driven project management and precise performance measurement ensure that infrastructure investments are directed toward creating jobs and real economic value.
What is required of policymakers in the Arab world is to treat the digital transformation of the construction sector as an economic policy issue, not merely a technological project. This vision necessitates harmonizing legislation, standardizing regulations, and directing funding towards institutional innovation. Only then can construction projects be transformed from mere expansions of space into knowledge-generating systems that contribute to the national economy.
