Harnessing AI for a Diversified Knowledge Economy in Saudi Arabia

Saudi Arabia’s transition toward a diversified, knowledge-based economy can harness artificial intelligence (AI) as a driver of productivity, innovation, and high-quality employment.

KAPSARC’s discussion paper uses unique administrative data to show how AI-augmented occupations (highly exposed to and complementary with AI) are reshaping labor market outcomes. These roles tend to command higher wages, particularly in the energy, manufacturing, and services sectors. However, an influx of workers with similar skills can erode this wage premium.

A key takeaway: AI readiness requires not only building skills but also enabling mobility across sectors to avoid overconcentration.

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