Saudi Arabia’s tech landscape flourishes with innovative initiatives 

Special Saudi Arabia’s tech landscape flourishes with innovative initiatives 
Saudi Arabia’s strides in technological innovation has placed it 48 among 132 featured economies on the Global Innovation Index 2023. Shutterstock
Short Url
Updated 12 April 2024
Follow

Saudi Arabia’s tech landscape flourishes with innovative initiatives 

Saudi Arabia’s tech landscape flourishes with innovative initiatives 

RIYADH: Saudi Arabia’s strategic location, thriving economy, and strong government support have attracted a diverse range of funding partners keen on assisting startups and entrepreneurs.

The Kingdom, according to Houssem Jemili, partner at management consulting firm Bain and Co., has one of the highest technology spends in the Middle East and North Africa, approximately 2.5 times that of the next country, and is growing year-on-year. 

Speaking to Arab News, Jemili said: “Saudi Arabia has a mature and diverse set of funding partners — government entities and programs (e.g., Monsha’at), large investment funds, and venture capitalists that provide access to both direct and indirect funding to startups and entrepreneurs.”  

Highlighting the Kingdom’s emergence as a dynamic tech hub in the region, he added: “KSA has a large domestic captive audience (the largest in MENA) that demands technology products and services.”   

Talat Zaki Hafiz, a Saudi-based economist, told Arab News that the Kingdom’s rise as a tech hub in MENA was greatly influenced by its status as the largest economy in the region, accounting for over 30 percent of the its gross domestic product, and ranking 16th among the G20 countries. 

“The technology strategy of Saudi Arabia includes ambitious targets and action plans based on attracting leading international companies mainly specialized in advanced and emerging technologies to enable the Kingdom to develop mega tech projects,” he said. 

Global Innovation Index  




Global Innovation Index 2023 Launch Event. WIPO/Violaine

Saudi Arabia’s strides in technological innovation are underscored by its position on the Global Innovation Index 2023, where it ranks 48th among 132 featured economies. 

“It (Saudi Arabia) has certainly made improvements, from 51st and 66th (position) in 2022 and 2021 respectively,” Jemili explained. 

He went on to say that the Kingdom recognizes that innovation is a “key driver of economic development,” and efforts will result in significant improvements across innovation input sub-indices like human capital and infrastructure, as well as output sub-indices such as knowledge and technology outputs, and creative outputs of the Global Innovation Index. 

Within the high-income group economies, Saudi Arabia ranks 41st, further solidifying its status as a burgeoning tech hub in the region.  

Moreover, the Kingdom’s ranking fifth among the 18 economies in North Africa and West Asia highlights its growing influence as a beacon of innovation in the Middle East.  

Hafiz believes that since the launch of Vision 2030 in 2016, Saudi Arabia has been focusing on tech-related industries in general and the digital economy in particular.  

“Since the digital economy is becoming the new trend in the 21st century, especially in Saudi Arabia, where over 60 percent of its citizens are youth less than 35 years old, they heavily use the internet to purchase goods and services,” he said.  

The economist explained that statistics revealed the Kingdom is witnessing a significant increase in the size of e-commerce, with expectations to reach $15 billion in 2025 and online sales projected to reach 66 percent.  

Saudi Arabia’s increasing prominence in technological advancement and innovation localization was showcased at the LEAP conference held in Riyadh. The event, which concluded in early March with great success, included agreements worth over $12 billion.  

“LEAP has made a tremendous effort to act as a node of the technology and innovation ecosystem in KSA — a node that connects the ecosystem and brings all the players together, through building a community,” Jemili said. 

Strategic investments 

Saudi Arabia’s emergence as a digital powerhouse can be attributed to its strategic investments in research and development, supportive policies, and a thriving startup ecosystem.   

With initiatives such as Vision 2030 and the establishment of the Digital Government Authority, the Kingdom is laying the groundwork for a technologically advanced future.  




Houssem Jemili, Partner at Bain & Co. Supplied

According to Jemili, the presence of global technology giants in Saudi Arabia is a testimony to the growth of the technology and innovation landscape in the Kingdom.  

“Such players provide the necessary minimum infrastructure that startups and entrepreneurs need to succeed,” he added.  

Jemili further elaborated: “They provide a world-class physical and digital infrastructure, like software labs and production studios, and even cloud credits to enable innovation at scale. Such advanced offering helps startups accelerate their ideas from early-stage to large-scale commercialization.”  

Global tech giants are investing billions in Saudi Arabia, highlighting its attractiveness as an investment destination, with Microsoft investing $2.1 billion in a global super-scaler cloud and Oracle committing $1.5 billion to build a new cloud region in Riyadh, as earlier revealed by Minister of Communication and Information Technology Abdullah Al-Swaha. 

Hafiz emphasized that the integration of technology in the Saudi traditional economy “is going so well.”  

“The Kingdom’s Vision 2030 is built on making significant changes in the Saudi economy not only to diversify its sector base but also to push for transformation to technology,” he added. 

Regulatory framework 

Saudi Arabia’s efforts to foster innovation extend to the regulatory realm, where the government has introduced initiatives such as regulatory sandboxes and fintech hubs.  

These initiatives provide a platform for startups and tech companies to test innovative products and services in a controlled environment, thereby facilitating compliance with regulatory requirements while fostering innovation.  

“Flow of and access to incentives is a big dimension that has helped Saudi Arabia drive its innovation landscape,” according to Jemili.  

He highlighted that the Kingdom has a rapidly evolving business environment that requires a structured regulatory system that is mature, growth-driven, and easy to navigate.  

“In addition, it is critical to enact clear and predictable regulations that enhance innovation, bring ease of doing business, and continue to build the trust of both the business community and investors,” he added.  

Jemili emphasized the importance of having a “phygital center of gravity” for the startup community, highlighting its critical role in providing firsthand ecosystem orientation and guidance to new entrepreneurs and foreign startups in the Kingdom.  

Phygital refers to a combined physical and digital center that serves as a pivotal hub for the startup community, offering both in-person and online resources, guidance, and orientation to new entrepreneurs and foreign startups.

With a diverse pool of founders and over 1,600 startups supported by a network of venture capital firms, Saudi Arabia is poised to become a global leader in technological innovation.   

Hafiz continued, emphasizing, “It is important to note that Saudi Arabia is the third worldwide and very advanced in digital industries, leader and ranked the first regionally according to the data of GOVTECH Maturity Index for 2022 issued by the World Bank Group.”   

He noted the government’s backing of advanced technologies in Saudi Arabia, which has driven significant progress toward Vision 2030’s goals by delivering high-quality digital services that bolster the national economy.  

Startup ecosystem  

Within the vibrant startup scene in Saudi Arabia, several companies have emerged as pioneers in innovation.  

Notable among them are startups enrolled in the Saudi Unicorns Program, exemplifying the Kingdom’s commitment to nurturing homegrown talent and fostering entrepreneurship.   

“Saudi Unicorns Program is a one-stop-shop solution to support and enable high-growth technology companies to reach the unicorn stage by providing an integrated set of services and offerings,” Jemili noted.   

The program provides unparalleled solutions to start-ups and entrepreneurs by providing access to connect with different stakeholders — international customers, talent, investors, and private sector, and experts for mentorship and guidance.   

He added that the objective of the program is in line with the overall Vision 2030, as it strives to increase the number of unicorns and create both direct and indirect impacts on the local GDP.  

“A differentiating aspect of Saudi Unicorns Program is its differentiated offerings based on the degree of readiness of the startups,” Jemili explained.  

Lean Tech, Mrsool, Quant, and Mozn are just a few examples of startups making waves in Saudi Arabia’s tech ecosystem.  

These companies represent the Kingdom’s vibrant culture of innovation and entrepreneurship, actively shaping its dynamic business landscape.  

With strategic investments, supportive policies, and a thriving startup ecosystem, the Kingdom is poised to lead the charge toward a digitally empowered future.  

By fostering collaboration, nurturing homegrown talent, and embracing emerging technologies, Saudi Arabia’s current momentum is promising for technology and innovation.   

Jemili cited the Magnitt report, stating that the Kingdom has emerged as the leading market for venture capital funding in the MENA region, attracting over $1.38 billion in investments in 2023. 

“This was the second year in a row that KSA has recorded a billion-dollar-plus figure in VC funding,” he said.  

Jemili gave examples of mega-rounds witnessed by Saudi-based platforms like Tabby and Tamara, which helped both companies secure unicorn status. “With continued efforts to improve livability aspects, improvements in ease of doing business, and continued growth and maturity of the funding institutions, KSA is on track for continued success.” 

As more of these elements come to life, the maturity of the ecosystems in cities like Riyadh and Jeddah can move from an early activation stage to a globalized stage.  

Hafiz concluded: “I don’t believe that the Kingdom is facing any pressing economic challenges to establish a tech ecosystem, simply because it is blessed with encouraging leadership.” 

He emphasized the encouragement to use technology at a large scale, which he believes has helped to “create an excellent ecosystem, especially when considering that more than 60 percent of the Saudi population are young, below 35 years old, and we are among the highest users of the internet in the Arab world and globally.” 


Australia, Saudi Arabia trade expo to be held in Riyadh in October

Australia, Saudi Arabia trade expo to be held in Riyadh in October
Updated 16 sec ago
Follow

Australia, Saudi Arabia trade expo to be held in Riyadh in October

Australia, Saudi Arabia trade expo to be held in Riyadh in October

RIYADH: Agriculture, healthcare, and education are among the sectors that will benefit from a new conference aiming to boost partnership deals between Saudi Arabia and Australia. 

Set to be held from Oct. 21 to 22 at the KAFD Conference Centre in Riyadh, the inaugural Aussie Expo will also see a focus on technology, infrastructure, and mining.

The event is being organised by the Trademark Group of Companies – a conglomerate dedicated to facilitating the expansion of Australian businesses into the Kingdom and the broader Gulf Cooperation Council region, as well as supporting businesses from these areas in entering the domestic market.

On June 1, Trademark Group of Companies opened its office in Riyadh, eyeing economic opportunities in Saudi Arabia and providing a platform for Australian companies to explore and deepen trade ties with the Kingdom.

Guided by the theme “Accelerating Partnerships, Unlocking New Opportunities,” Aussie Expo Riyadh 2024 will showcase excellence across various industries, according to its website. 

This will be achieved through a series of conference sessions and workshops during which key government officials, industry leaders, decision-makers, and entrepreneurs from both countries will converge. 

These networking opportunities are expected to be a major draw for attendees, providing a platform to explore potential partnerships that drive mutual success.

Renewable energy and sustainability as well as tourism and hospitality, retail and consumer goods, and transport and logistics will be discussed at the evemt

Talking to Arab News on the sidelines of the Australian Saudi Business Networking Event in Riyadh earlier in June, Australian Ambassador Mark Donovan said the opening of the Trademark Group of Companies’ office in the Kingdom  would help both countries explore investment opportunities in various sectors.

Earlier in May, Saudi Arabia and Australia signed an agreement to improve cooperation across multiple sectors and strengthen bilateral trade ties.

The Australia Saudi Business Council and Forum and the Export Council of Australia signed an agreement to boost collaboration in industry, mining, food, technology, and artificial intelligence, with an aim to enhance opportunities for Australian exporters to work with Saudi entities, strengthening bilateral cooperation.


Saudi Arabia expands access for Chinese tourists with new agreement

Saudi Arabia expands access for Chinese tourists with new agreement
Updated 32 min 4 sec ago
Follow

Saudi Arabia expands access for Chinese tourists with new agreement

Saudi Arabia expands access for Chinese tourists with new agreement

RIYADH: Chinese tourist groups will now find it easier to visit Saudi Arabia following the implementation of the Approved Destination Status arrangement, effective July 1.  

This initiative marks a key step toward the Kingdom’s goal of positioning China as its third-largest source market for international arrivals by 2030, according to a statement.  

This initiative aligns with Saudi Arabia’s goal of attracting 5 million Chinese tourists by 2030, facilitated by new direct flights from Air China, China Eastern, and China Southern, alongside existing Saudia flights. 

Moreover, it highlights Saudi Arabia’s commitment to strengthening its economic ties with China, leveraging opportunities in the tourism sector, and promoting mutual understanding, cooperation, and economic growth between the two nations. 

The Kingdom’s Tourism Minister Ahmed Al-Khateeb said the agreement “demonstrates Saudi Arabia’s readiness for Chinese visitors.”

He added: “The Saudi Tourism Authority has played a crucial role in visa facilitation, reduced fees, improving air connectivity, and ensuring destination readiness with Mandarin-language information available on www.visitsaudi.cn, Mandarin signage at airports, and Mandarin-speaking tour guides and hotel staff.”  

China’s ADS policy is a bilateral agreement between countries that allows its citizens to travel to specific overseas destinations for tourism purposes in organized groups.

It was first introduced in the early 1990s to accommodate the growing interest of Chinese citizens in international travel and the increase in disposable income among the population.  

“By strengthening bilateral ties with China, the ADS agreement opens doors for economic development across sectors, benefiting both nations,” added Saudi Arabia’s Ambassador to China Abdulrahman bin Ahmed Al-Harbi. 


‘Historical transformation’ in Saudi Arabia fueling $141.5bn construction output: Knight Frank

‘Historical transformation’ in Saudi Arabia fueling $141.5bn construction output: Knight Frank
Updated 24 June 2024
Follow

‘Historical transformation’ in Saudi Arabia fueling $141.5bn construction output: Knight Frank

‘Historical transformation’ in Saudi Arabia fueling $141.5bn construction output: Knight Frank

RIYADH: Saudi Arabia’s construction output value is projected to have seen an annual rise of 4.3 percent in the first half of 2024, propelled by growth in Riyadh.

According to a recent analysis by global property consultancy Knight Frank, the $141.5 billion figure takes into account the Kingdom’s activities in the residential, institutional, and infrastructure sectors as well as industrial, energy, utilities, and commercial divisions.

This substantial investment in transforming the sector also serves to strengthen the Kingdom’s position as a global hub for tourism, commerce and trade.

This is further propelled by Saudi Arabia’s giga-projects and goals to deliver over 660,000 residential units, more than 320,000 hotel keys, over 5.3 million sq. m. of retail space, and more than 6.1 million sq. m. of new office space by the end of the decade.

Mohamed Nabil, head of Project and Development Services for the Middle East and North Africa at the body, said: “We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value. 

“Given the scale of the development pipeline, the government is hoping to attract over $3 trillion in investments by 2030, a figure recently confirmed by the Minister of Investment during the inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China last month.”


Oil Updates – crude eases as strong dollar weighs on commodities markets

Oil Updates – crude eases as strong dollar weighs on commodities markets
Updated 24 June 2024
Follow

Oil Updates – crude eases as strong dollar weighs on commodities markets

Oil Updates – crude eases as strong dollar weighs on commodities markets

SINGAPORE: Oil prices inched down on Monday as concerns of higher-for-longer interest rates resurfaced and lifted the dollar, offsetting support for oil markets from geopolitical tensions and OPEC+ supply cuts, according to Reuters.

Brent crude futures slipped 3 cents to $85.21 a barrel by 9:32 a.m. Saudi time, after settling down 0.6 percent on Friday. US West Texas Intermediate crude futures were at $80.71 a barrel, down 2 cents.

“The US dollar has opened bid this morning and appears to have broken higher following better US PMI data on Friday night and political concerns ahead of the French election,” said Tony Sycamore, a Sydney-based markets analyst at IG.

A stronger greenback makes dollar-denominated commodities less attractive for holders of other currencies.

The dollar index, which measures the greenback against six major currencies, climbed on Friday and was up slightly on Monday after purchasing managers index data showed US business activity was at a 26-month high in June.

However, both benchmark crude contracts gained about 3 percent last week on signs of stronger oil products demand in the US, world’s largest consumer, and as cuts from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, kept supply in check.

US crude inventories fell while gasoline demand rose for the seventh straight week and jet fuel consumption has returned to 2019 levels, ANZ analysts said in a note.

ING analysts led by Warren Patterson said speculators have also become more constructive toward oil into summer and increased their net-long positions in ICE Brent.

“We remain supportive toward the oil market with a deficit over the third quarter set to tighten the oil balance,” the analysts said in a note.

Geopolitical risks in the Middle East from the Gaza crisis and a ramp-up in Ukrainian drone attacks on Russian refineries are also underpinning oil prices.

In Ecuador, state oil company Petroecuador has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains, sources said on Friday.

In the US, the number of operating oil rigs fell three to 485 last week, their lowest since January 2022, Baker Hughes said in its report on Friday. 


Saudi Arabia’s trade surplus hits yearly high of $11bn in April amid surge in non-oil exports

 Saudi Arabia’s trade surplus hits yearly high of $11bn in April amid surge in non-oil exports
Updated 24 June 2024
Follow

Saudi Arabia’s trade surplus hits yearly high of $11bn in April amid surge in non-oil exports

 Saudi Arabia’s trade surplus hits yearly high of $11bn in April amid surge in non-oil exports

RIYADH: Saudi Arabia’s trade balance surplus hit a year-high of SR41.4 billion ($11.04 billion) in April, a 36 percent increase from the previous month, fueled by a surge in non-oil exports. 

According to the General Authority for Statistics, the Kingdom’s non-oil shipments rose by 12.4 percent in April compared to the same month last year. 

This comes as the Kingdom intensifies its efforts to boost non-oil exports to reduce its reliance on the energy sector and diversify its economy. The significant growth underscores Saudi Arabia’s commitment to strengthening other sectors and achieving a more balanced economic structure. 

National non-oil exports, excluding re-exports, saw a modest rise of 1.6 percent in April this year compared to April 2023, while re-exported goods experienced a substantial increase of 56.4 percent over the same period. 

In contrast, overall outbound merchandise supply fell by 1.0 percent, primarily due to a 4.2 percent decline in oil exports. As a result, the proportion of oil in total outbound supply decreased from 80.6 percent in April 2023 to 78.0 percent in April this year. 

Imports also saw a slight decline of 1.3 percent, and the merchandise trade balance surplus dropped by 0.5 percent compared to the previous year. 

Month-over-month comparisons show a decrease in the value of merchandise exports by 1.7 percent, non-oil exports by 6.3 percent, and imports by 17.4 percent. However, the Kingdom’s trade balance still saw a substantial increase. 

The ratio of non-oil merchandise exports to imports improved significantly, rising to 37.1 percent in April from 32.6 percent in April 2023. This improvement is attributed to the increase in non-oil exports and the decrease in imports. 

Plastics, rubber, and their products were among the top non-oil exports, making up 26.2 percent of the total and growing by 20.5 percent compared to April 2023. 

Chemical products also constituted a significant portion, accounting for 25.7 percent of non-oil exports, although they saw a 13.8 percent decrease from the previous year. 

On the import side, machinery, electrical equipment, and parts were the leading category, representing 26.6 percent of total imports and increasing by 32.4 percent compared to April 2023. 

Transportation equipment and parts followed, making up 11.7 percent of imports but decreasing by 24.5 percent from the previous year. 

China remained Saudi Arabia’s largest trading partner, receiving 16.6 percent of total exports in April 2024. Japan and India followed with 9.2 percent and 8.1 percent of total exports, respectively. 

These top three countries, along with South Korea, the UAE, and the US, alongside Poland, Bahrain, Malaysia, and Singapore, collectively accounted for 65.6 percent of the Kingdom’s total exports. 

China also led in imports to Saudi Arabia, constituting 22.4 percent of total imports. The US and India followed, with 8.3 percent and 6.6 percent of total imports, respectively. 

Imports from the top ten countries made up 62.2 percent of the total. 

The main entry points for imports into the Kingdom included King Abdulaziz Sea Port in Dammam with 29.7 percent, Jeddah Islamic Sea Port with 18.4 percent, and King Khalid International Airport in Riyadh with 14.3 percent. 

Other ports included King Abdulaziz International Airport with 7.6 percent and King Fahad International Airport in Dammam with 5.9 percent. 

Together, these five ports handled 76.0 percent of Saudi Arabia’s total merchandise imports. 

These statistics are based on administrative records from the Zakat, Tax and Customs Authority and the Ministry of Energy, with classifications according to the Harmonized System maintained by the World Customs Organization.