The GCC public sector is outpacing its global counterparts in digital and artificial intelligence (AI) readiness, driven by ambitious government initiatives and successful digital overhauls since 2021, according to a new report by the Boston Consulting Group (BCG).

BCG’s study, “Unlocking Potential: Strategies Driving GCC’s Digital & AI Maturity,” revealed that organizations with mature digital and AI capabilities achieve significantly higher revenue and enterprise value, boasting 2.1 times higher market share than their less mature peers.

These leading organizations are investing heavily in these technologies, allocating 2.4 times more funding to AI initiatives and dedicating 2.3 times more of their workforce to digital and AI transformation in 2024. 

This investment translates to faster time-to-market for digital and AI products (1.25 times faster) and a greater ability to scale AI and generative AI solutions (2.3 times more).

While the GCC is making significant strides in AI adoption, with 47% of companies using the technology to drive measurable value, the report highlights that challenges remain. Although 25% of GCC companies have reached the top two stages of digital and AI maturity, compared to 31% globally, many struggle to scale AI transformations across their organizations.

Common obstacles include limited access to high-quality data, integration difficulties with existing IT systems, talent shortages, and challenges in reimagining workflows.

Rami Mourtada, Partner and Director, Digital Transformation at BCG, emphasized the importance of reshaping core business functions through emerging technologies like AI.

“Success will depend on how effectively organizations balance innovation with practical implementation, underpinned by integrated capabilities that drive long-term benefit,” Mourtada added.

Dr. Lars Littig, Managing Director at BCG, emphasized the importance of organizational capabilities in the GCC’s digital future, noting that while AI-driven firms see strong returns, capability gaps remain.

“GCC organizations must move beyond surface-level digital adoption and focus on foundational elements. This isn’t just about catching up to global benchmarks; it’s about establishing a sustainable model for digital innovation that leverages the region’s unique strengths.”

BCG outlined five key recommendations for GCC organizations to accelerate their digital and AI journeys: aligning organizational strategy with a digital-first vision; setting a bold strategic ambition for AI adoption; boosting people, organizational capabilities, and technology platforms; maintaining a pipeline of innovation pilots; and prioritizing high-profile, high-ROI initiatives to fund the journey and build momentum for change.