Empowering Saudi Arabia’s private sector is at the heart of everything PIF does
The private sector is the key driver of future prosperity in almost every economy — and Saudi Arabia is no exception to this.
Crown Prince Mohammed bin Salman, who is also chairman of the Public Investment Fund, summed this up when he said: “The private sector is the most important strategic permanent partner that plays a crucial role in our success.”
This crucial role is reflected in Saudi Vision 2030 — our economic roadmap — which aims to raise the private sector’s contribution to the gross domestic product from 40 percent to 65 percent.
That is why PIF puts empowering Saudi Arabia’s private sector at the heart of everything we do, and why this week, over 4,000 private sector representatives from across the Kingdom representing a diverse range of sectors came together with more than 50 PIF portfolio companies, government ministers and senior PIF executives.
For us, it was an exciting opportunity to engage with corporates and small and medium enterprises who want to grow their businesses, and ensure that the private sector has visibility and access to the opportunities that PIF is creating.
For the attendees from the private sector, it was a venue to connect with PIF portfolio companies representing multiple billions of riyals of future domestic procurement opportunities.
The Private Sector Forum is the latest PIF initiative dedicated to empowering the private sector; it is an extension of the fund’s efforts to champion the private sector, build a more resilient domestic economy, and increase local content across its portfolio companies to 60 percent by 2025.
Since 2015, PIF has created 71 portfolio companies in 13 strategic sectors. We are investing heavily to create new value chains in the Kingdom and strengthen existing ones. This will increase local content, make our supply chains more resilient, and reduce imports. PIF is actively working to increase the role of private sector companies — as suppliers, operating partners, and investors — across these value chains.
By acting as a cornerstone investor, PIF’s size and long investment horizon mean we can step in at the early stages, lay the foundations, and “crowd in” the private sector. This is particularly important in sectors that do not exist currently or are in the early stages of growth in the Kingdom.
From investments in the automotive sector, establishing the Kingdom as a manufacturing hub for the next generation of electric vehicles, to the growing esports and gaming industries, and as a major investor in renewable energy, PIF is catalyzing emerging sectors and investing in our shared future.
Our international investments are helping us to support domestic businesses by accessing global innovation and expertise.
Our investments in the Kingdom’s giga-projects, such as Red Sea Global and Qiddiya, are creating the built environments necessary to support the growth in tourism and entertainment sectors, and our investment in the Saudi Coffee Co., which is building infrastructure and training farmers, will in time see the re-population of coffee bean plants in the Southwest of Saudi Arabia. The day will come when we become a global source market for premium specialty coffee.
These are just two examples of our strategy in action — reducing imports and moving towards export-competitive industries, thus developing our economy and driving jobs and opportunities across the Kingdom.
Our international investments are helping us to support domestic businesses by accessing global innovation and expertise. Through these connections, we are excited to help ambitious Saudi firms stay at the leading edge of innovation — setting them up for long-term success here in the Kingdom and around the world.
Our approach and the hard work and innovation of the Saudi private sector are already showing results. Saudi Arabia's economy continues to outperform most major economies, supported by continued growth and strong performance of non-oil sectors.
Through the PIF Private Sector Forum this week and by increasing the participation of local private sector companies — as suppliers, operating partners, and investors — we are working even closer together to achieve a diversified, thriving, and resilient economy.
• Jerry Todd is head of the National Development Division at the Public Investment Fund