The Kingdom of Saudi Arabia is undergoing a remarkable technological renaissance as part of its ambitious Vision 2030 initiative. With a focus on enhancing productivity, resilience, and environmental stewardship, the Kingdom is making significant strides in various sectors, particularly in industry, and information and communications technology (ICT).
The following delves into the transformative journey of Saudi Arabia, exploring how the nation is leveraging advanced technologies to diversify its economy, foster innovation, and position itself as a global technological hub.
The Industrial Sector's Technological Leap
Since the launch of Vision 2030 in 2016, Saudi Arabia's industrial sector has experienced sustained growth, with investments in manufacturing reaching an impressive USD 132 billion. A pivotal aspect of this resurgence is the adoption of Industry 4.0 principles, encompassing technologies such as the Internet of Things (IoT), artificial intelligence (AI), and robotics. This technological leap aims to create more efficient, flexible, and interconnected systems, steering the nation away from oil-centric economic models.
Already yielding positive results, Saudi Arabia's manufacturing activity surged by 18.5 percent in December 2022, underscoring the nation's commitment to embracing transformative technologies. Over 2,000 new licenses have been issued, contributing to the creation of 193,000 new jobs within the industrial sector. With a vision to increase the number of factories to 36,000 by 2035, including 4,000 fully automated facilities, Saudi Arabia aims to establish a dynamic and innovative production landscape.
Information and Communications Technology Market
Valued at over USD 40.9 billion and constituting 4.1 percent of the Kingdom's GDP, Saudi Arabia's ICT market is the largest and fastest-growing in the Middle East and North Africa region. The country is strategically positioning itself as a technology service and cloud hub with access to international connectivity through the Red Sea and the Gulf.
To support Vision 2030's digital transformation goals, Saudi Arabia is actively implementing its 2023 ICT Strategy, with a focus on e-commerce, digital education, digital health, smart cities, national data, and e-government. The strategy outlines ambitious targets, including the creation of over 25,000 jobs in the sector, a 50 percent increase in the size of the IT market and emerging technologies, and a USD 13.3 billion boost to the sector's contribution to GDP.
Potential Opportunities in ICT
Here are the key opportunities of the digital innovation in the KSA:
- Cybersecurity
Saudi Arabia, securing the second position in the IMD's Global Cybersecurity Index, is a Middle East cybersecurity leader. The market, valued at USD 3.6 billion in 2020, is projected to reach USD 9.8 billion by 2026, offering opportunities in application security, cloud security, consumer security software, and data security. The Kingdom's commitment positions it as a key player in addressing emerging threats and fostering a secure digital environment.
- Internet of Things (IoT) & Smart Cities
Saudi Arabia aims to become the world's most connected nation by 2030, propelling its IoT market, which is projected to reach USD 2.9 billion by 2025. With a focus on industrialized IoT, AI, cloud computing, and data centers, the Kingdom provides opportunities in predictive maintenance, asset tracking, fleet management, and warehouse optimization. This aligns with Saudi Arabia's broader vision of a highly innovative and interconnected digital future.
- Cloud Computing
Saudi Arabia is set to significantly boost its annual spending on public cloud services, projecting a reach of USD 2.5 billion by 2026 at an impressive Compound Annual Growth Rate (CAGR) of 25 percent. This commitment to cloud technology is further emphasized by the launch of a Cloud Computing Special Economic Zone, highlighting the nation's dedication to fostering the widespread adoption of cloud services.
- Artificial Intelligence (AI)
The kingdom anticipates a substantial contribution of USD 135 billion to its economy by 2030 through AI advancements. Opportunities lie in tailoring AI applications for the local market, especially in transforming manufacturing processes within the oil and gas sector.
- 5G
Saudi Arabia launched 5G networks in 2019, with coverage exceeding 53 percent. Significant investments in digital infrastructure have resulted in high mobile internet speeds and increased subscription rates, positioning the Kingdom as a leader in technological advancements.
- E-Commerce
Valued at USD 5.15 billion, the Saudi e-commerce market represents 6 percent of the retail sector. Vision 2030 targets a 70 percent shift to cashless transactions by 2030, fostering investments in digital payments and highlighting Saudi Arabia's commitment to economic modernization.
Saudi Arabia's technological advancements are propelling the nation towards a digital future, with a focus on innovation, economic diversification, and global leadership in key technological sectors. As the Kingdom continues to invest in cutting-edge technologies and infrastructure, it is poised to emerge as a beacon of technological excellence in the Middle East and beyond. The transformative journey outlined in Vision 2030 is not just a national agenda but a testament to Saudi Arabia's commitment to shaping a dynamic, technology-driven future.
