Saudi Arabia has robust economic indicators with about 60 percent of the gross domestic product (GDP) generated from the industrial sector. However, it accounts for only about 21 percent of the work force.

On the other hand, the services sector, which contributes about 36 percent to the GDP, employs nearly 70 percent of total labor.

The oil and gas sector, which accounts for the bulk of the Kingdom's industrial sector, is heavily technology intensive compared to the small and medium manufacturing enterprises that are more manpower reliant - a key consideration when it comes to job creation.

In a country with some 60 percent of the population in the 15 to 64 age group and with the population growing at about 2 percent annually, clearly the need for creating new job opportunities cannot be overstated.

How can we create new jobs? How can we address the pressing societal issue of unemployment?

Agriculture is virtually ruled out as an employment provider.

The intense pressure that agriculture places on water resources has already prompted Saudi Arabian policymakers to phase out wheat production within the Kingdom and invest in agriculture in overseas markets like Sudan and Pakistan.

While services offer a wider playing field, the sector has not been able to address the unemployment challenge in the Kingdom. This leaves room for industries to offer jobs, with a focus on manufacturing and small and medium enterprises.

Saudi Arabia is the only OPEC member in the G20, a bloc of the world's most powerful countries. The Kingdom, like all global economies, is exposed to the challenges of the current economic climate. In the past two years, the Kingdom witnessed volatility in three of its core markets - international finance, oil and petrochemicals.

It also prompted Saudi policy makers to identify new growth opportunities - especially those not overtly affected by the highly sensitive price and demand trends of oil.

The Ministry of Commerce & Industry is finalizing plans to launch the national industrial strategy, with an investment of about SR50 billion. The strategy's principal focus is to strengthen manufacturing in the Kingdom by providing the necessary infrastructure, governance and incentives.

This focus on the manufacturing sector has long-term implications. In addition to creating new jobs and driving ancillary industries, it will drive innovation and research and development (R&D) - the key pillars of a knowledge economy.

General Electric (GE) is acting as a partner in this strategic development shift. Most recently, GE signed an agreement with the Ministry of Commerce and Industry to support the national industrial strategy

With this agreement, GE will contribute to the Kingdom's competitiveness and sustainable growth by investing in manufacturing and sharing competencies in technology and industrialization in order to help create highly skilled industrial and technical jobs.

This agreement lays the framework for a comprehensive partnership to explore manufacturing opportunities in Saudi Arabia, not only for the Kingdom but also for local and export markets.

The partnerships mark GE's "company to country" approach in Saudi Arabia to become a trusted partner in the Kingdom's developmental goals and help further advance the localization of GE. This is what I term as turning GE into "Saudi GE". In other words, GE will become another pillar of the Saudi economy, similar to Saudi Aramco.

Along with the agreement, our programs are designed to ensure the success of the goals of this company to country partnership. Examples are close collaboration and a Kingdom-wide program with universities and schools for knowledge transfer and know-how through training, internships and educational campaigns to introduce the culture of innovation from an early age.

Since GE's inception more than 130 years ago by Thomas Edison, we have focused on manufacturing and localization, which have been key to the company's success and sustained growth.

Manufacturing will bring about many benefits. It provides qualified Saudi cadre with promising jobs, drives innovation and R&D to boost operational efficiencies, and contributes to the overall social and economic prosperity of the Kingdom.

Furthermore, with Saudi Arabia already regarded as the regional economic powerhouse and a global energy hub, a new outlook and perspective for manufacturing will firmly position the country as a thought-leader in the sector.

The Kingdom can share its competencies and experiences with the larger Arab world, comprising the Middle East and North Africa, thus flagging off a new developmental momentum for the region.

At a micro-level, the growth of a home-grown manufacturing sector drastically reduces the Kingdom's dependency on imports - especially for raw materials that drive different economic sectors such as construction and real estate, hospitality and healthcare.

Saudi Arabia's vision is to become one of the most competitive economies in the world, and this can be achieved only by diversifying its revenue streams.

Creating a robust manufacturing sector - almost from the scratch - is not an easy process. It requires collaborative effort and knowledge-sharing with a strong focus on public-private-partnerships.

GE has laid a good foundation for manufacturing in Saudi Arabia, through what I call the "four stages of localization." These include bringing in solutions that are suited for the country; building capability to service the installed base; customizing and assembling some of its products; and piloting R&D programs with key universities. All of these are necessary steps for manufacturing to create a meaningful impact on the economy and for "full localization" to take place.

The private sector is capable of bringing in unmatched global capabilities and competencies. When this meets a supportive and conducive environment for growth, as is envisaged by the Kingdom's National Industrial Strategy, innovation can sprout wings.
 
(Akram Hamad is president for GE Saudi Arabia, Kuwait, Bahrain and Yemen. The views expressed in this article are the author's own and do not necessarily represent that of the organization.)