Two hundred and fifty years ago, Adam Smith published The Wealth of Nations and challenged the way people understood economic prosperity. A country’s wealth, he argued, was not simply the gold accumulated in its treasury, but the productive capacity of its people.
Today, as artificial intelligence begins to reshape economies, industries and labour markets, Smith’s question has acquired a new urgency: what makes a nation wealthy in an age when machines can perform tasks once considered exclusively human?
This was the central question explored at a conference hosted by New Giza University, marking both the 250th anniversary of Smith’s landmark work and the university’s tenth anniversary. Bringing together academics, policymakers and business leaders, including colleagues from the University of Glasgow, where Smith studied and later taught, the discussions offered an opportunity to reconsider the relationship between markets, government, technology and society.
The most important conclusion was that Smith’s ideas remain relevant, but applying them to today’s economy requires a broader understanding of wealth, responsibility and opportunity.
Adam Smith was never an advocate of an absent state
One of the most persistent misconceptions about Adam Smith is that he believed markets should operate without government intervention, or that the pursuit of individual greed would automatically produce collective prosperity.
Smith was a moral philosopher before he became an economist. His understanding of markets was inseparable from questions of justice, responsibility and the welfare of society.
He recognised an essential role for government in protecting rights, maintaining fair competition and providing the conditions in which economic activity could benefit society.
This distinction matters enormously today.
Artificial intelligence is creating opportunities for productivity and economic growth on a scale that would have been difficult to imagine even a decade ago. But it is also raising serious questions about market concentration, employment, privacy and the distribution of economic gains.
The challenge is not simply to encourage technological innovation. It is to ensure that innovation serves the wider economy rather than concentrating wealth and power in the hands of a limited number of companies or individuals.
In other words, the principles of fair markets must now extend to fair algorithms.
The new wealth of nations
In the industrial economy, national wealth was closely associated with factories, natural resources, infrastructure and physical capital.
These remain important. But a new form of economic capital is emerging, built around data, computing power, artificial intelligence models, specialised talent and public trust.
We described this during our discussions as instrumental capital: the resources and capabilities that enable countries to participate meaningfully in the new technological economy.
Possessing advanced technology, however, is not the same as knowing how to use it productively.
Countries will increasingly be judged not by the number of artificial intelligence initiatives they announce, but by their ability to translate technological capabilities into better services, more competitive businesses, higher productivity and improved living standards.
For Egypt, this distinction is particularly important.
The country does not need to compete with the world’s largest technology companies in every field. It needs to identify where artificial intelligence can address real economic and social challenges, and where investment can produce measurable results.
Financial services, agriculture and water management, logistics, healthcare and public services are among the areas in which focused applications could offer significant value.
The objective should not be technological prestige. It should be practical economic improvement.
Regulation should enable innovation, not prevent it
The relationship between governments and technology companies is becoming more complex.
Governments are no longer merely regulators of economic activity. Increasingly, they are investors, strategic planners and participants in the development of technological infrastructure.
This creates both opportunities and risks.
Excessive regulation can discourage experimentation and investment. But insufficient regulation can expose consumers, workers and businesses to decisions they neither understand nor have the ability to challenge.
Egypt therefore needs an approach to AI governance that protects competition, consumers and financial stability while allowing innovation to develop.
Regulatory sandboxes, including approaches already being explored by Egypt’s Financial Regulatory Authority, offer a useful model. They allow new technologies to be tested under supervision before broader regulatory decisions are made.
Equally important is the principle that citizens should have the right to understand and challenge significant decisions made about them by automated systems.
Technology must not become a convenient way of removing accountability from public institutions or private companies.
The greatest investment is still in people
Perhaps the most difficult challenge presented by artificial intelligence concerns employment.
AI is not simply replacing repetitive manual tasks. It is increasingly capable of performing administrative, analytical and professional functions that have traditionally provided entry-level opportunities for young graduates.
For a country such as Egypt, with a large young population, this development demands particular attention.
Education and training systems cannot continue preparing students for an economy that is already changing.
A national partnership between government, universities and employers is needed to develop the skills required by the emerging labour market.
Such a partnership should involve shared funding, practical training and continuous adaptation of educational programmes.
But technical knowledge alone will not be enough.
The capabilities that will distinguish human beings in an increasingly automated economy include judgement, ethical reasoning, creativity, empathy and the ability to understand complex social situations.
The purpose of education must therefore extend beyond teaching students how to use new technologies. It must prepare them to think independently and responsibly in a world shaped by those technologies.
Social protection systems must also evolve. Rather than merely compensating people for the jobs they lose, they should help workers acquire the skills and opportunities needed to move into new forms of employment.
Safety nets must become springboards.
Public investment must create public value
Artificial intelligence requires substantial investment in computing infrastructure, research, data systems and specialised capabilities.
Not all of these investments can be expected to come from the private sector.
There is a legitimate role for government in developing shared infrastructure, supporting research and making high-quality data available under appropriate safeguards.
For Egypt and the wider Arab world, investment in Arabic-language artificial intelligence is especially important.
Language is not simply a technical consideration. It shapes access to knowledge, participation in economic life and the ability of societies to benefit from technological change.
Yet public investment must be guided by clear principles.
It should be transparent, competitive and open to private-sector participation. Its purpose should be to create opportunities for a broad range of businesses and innovators, not to establish a small group of privileged beneficiaries.
Small and medium-sized enterprises, in particular, need practical support to move beyond isolated experiments and adopt AI tools that improve productivity.
Success should be measured by economic value, not by the number of pilot projects or announcements.
Universities have a central role in this process. They must become active partners in research, policy development and industry collaboration, rather than remaining observers of technological transformation.
Prosperity must be measured by its human impact
There is a danger that the debate about artificial intelligence will become dominated by investment figures, technological capabilities and competition between nations.
These are important, but they are not sufficient measures of success.
Adam Smith offered a more enduring test when he wrote: “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
That observation remains as relevant today as it was in the eighteenth century.
Artificial intelligence may generate extraordinary wealth. But if its benefits remain concentrated, if young people find fewer opportunities, or if technological efficiency comes at the expense of human dignity, economic progress will have failed a fundamental test.
For Egypt, the real question is not how much artificial intelligence we can acquire, or how quickly we can announce its adoption.
It is whether we can use it to create a more productive economy, stronger institutions, better employment opportunities and a fairer distribution of prosperity.
Two hundred and fifty years after Adam Smith asked what makes nations wealthy, the answer still begins with people.
Technology may change the instruments through which wealth is created. It should not change the ultimate purpose for which that wealth exists.
