AI Adoption Rising in Kuwait Firms but Productivity Gains Limited

The research shows that AI tools are already present in many Kuwaiti companies, particularly in support and administrative functions.

A new International Labour Organization (ILO) report, developed in collaboration with the Kuwait Chamber of Commerce and Industry (KCCI), finds that while artificial intelligence is increasingly being adopted across Kuwait’s private sector, measurable productivity gains remain uneven.

The report, “Adoption of Artificial Intelligence and Productivity Growth in Kuwait’s Private Sector,” examines how companies are using AI technologies and whether the shift is translating into real performance improvements.

The study is based on enterprise interviews conducted in 2025, followed by a structured validation dialogue with KCCI. The findings were validated in October 2025 and finalized in January 2026.

AI Expanding Across Business Operations

The research shows that AI tools are already present in many Kuwaiti companies, particularly in support and administrative functions.

Common applications include:

• Document processing and automation

• Customer interaction tools

• Forecasting and predictive analytics

• Anomaly detection in operations

However, fully integrated AI systems that operate across entire organizations are mainly found in larger and more digitally advanced firms.

Automation and Decision Support Drive Adoption

Companies reported using AI primarily to:

• Automate routine administrative tasks

• Support data-driven decision-making

• Improve customer service and operational efficiency

Many businesses begin with stand-alone AI tools, but more advanced adopters are integrating machine learning models into existing data systems.

The report notes that progress depends less on simply acquiring AI tools and more on data infrastructure and internal organizational capabilities.

Strong Economic Incentives for AI Investment

Economic motivations are a major factor behind AI adoption.

Among surveyed firms:

• 93 percent cited cost reduction and faster operations as key reasons for adopting AI

• 78 percent said AI helps create strategic competitive advantages

Despite these strong incentives, the ability to scale AI across organizations varies widely.

Large Firms Leading Adoption

The report highlights a significant gap between large enterprises and small- and medium-sized enterprises (SMEs).

Among participating companies:

• 45 percent of large firms reported having formal AI policies

• Only 14 percent of SMEs had such policies

Training programs show a similar disparity:

• 65 percent of large companies provide AI training

• Only 29 percent of smaller firms offer similar initiatives

This suggests that organizational capacity and investment resources play a critical role in AI adoption.

Productivity Gains Not Yet Widespread

While many businesses reported faster task execution after adopting AI tools, verified productivity improvements remain limited.

According to the study:

• Only 26 percent of reported productivity gains met the report’s criteria for verified impact

In cases where productivity improvements were rigorously measured, companies reported task-time reductions of between 60 percent and 98 percent for specific workflows.

These results indicate that AI can deliver significant efficiency gains when properly implemented and measured.

Building the Foundations for AI-Driven Growth

The report concludes that strengthening data systems, workforce skills and governance frameworks will be essential to ensure AI adoption leads to sustained and inclusive productivity growth.

Without these foundations, many businesses risk using AI tools in isolated ways that improve individual tasks but fail to generate broader organizational benefits.

By addressing these gaps, policymakers and business leaders in Kuwait could help accelerate digital transformation and unlock the full economic potential of artificial intelligence across the private sector.