Industry
From The Report: Saudi Arabia 2019
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The sweeping changes announced in Vision 2030 aim at giving rise to a reinvigorated and prosperous private sector, driving growth through broad industrial development. By the time the G20 summit convenes in Riyadh in 2020, four years after the Vision 2030 announcements, the country’s leaders will be able to showcase some of the first results of the new agenda, as detailed in the National Transformation Programme (NTP). There are high expectations of the individual reforms, as policymakers work to meet key performance indicators outlined in the NTP’s second iteration, dubbed NTP 2.0. Mega-projects such as the Sadara Petrochemicals Complex are producing raw materials that can spawn new manufacturing plants, while the consumer habits of a growing, young and affluent population are creating fresh markets for innovative service industries. This chapter contains an interview with Khalid Al Salem, Director-General, Saudi Authority for Industrial Cities and Technology Zones.

Articles from this Chapter

Overview

High expectations: In combination with a range of mega-projects, ambitious and far-reaching reforms are set to revitalise the sector
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The sweeping changes announced in Vision 2030 aim at giving rise to a reinvigorated and prosperous private sector, driving growth through broad industrial development. By the time the G20 summit convenes in Riyadh in 2020, four years after the Vision 2030 announcements, the country’s leaders will be able to showcase some of the first results of the new agenda, as detailed in the National Transformation Programme (NTP). There are high expectations of the individual reforms, as policymakers…

Interview

Unity in diversity: Khalid Al Salem, Director-General, Saudi Authority for Industrial Cities and Technology Zones (MODON), on enhancing existing industrial activities and exploring new cluster opportunities
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Interview:Khalid Al Salem What are some of the key advantages of investing in Saudi Arabia’s industrial cities? KHALID AL SALEM: As the largest economy in the MENA region, Saudi Arabia has a huge internal market. Our industrial cities offer added value, as many of them are located amidst the Kingdom’s most important cities. This means that investors who choose to invest in the country will gain access to a centrally located, vibrant market, which serves as one key advantage in regards…

Analysis

Revolutionary potential: The Fourth Industrial Revolution (4IR) is already having an impact, the question now is how best to leverage it
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The 4IR has been described as a SR1trn ($266.6bn) opportunity for Saudi Arabia, but experts are warning that the Kingdom’s industries will have to adapt rapidly if they are to make the most of it by 2030. Following on from mechanisation, mass production and digitisation of production, the next step change in industrial development will be to manage the combined impact of several concurrent technological changes, among them artificial intelligence (AI) and machine learning, the internet…

Analysis

Pedal to the metal: Increased production capacity ties in with steadily rising demand
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Ambitious plans to develop and expand automotive manufacturing are being drawn up, with a view to capitalising on the increasing availability of raw materials and a strong domestic market for cars and trucks. In August 2018 the Ministry of Energy, Industry and Mineral Resources (MEIM) announced that the Kingdom “is currently developing a city for the automotive industry and providing many benefits to investors in this sector”. The announcement added that the availability of aluminium…

Analysis

Local talent: Government schemes dovetail with large corporate initiatives to create new jobs and opportunities for citizens
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With record public expenditure of SR1.1trn ($293.3bn) in 2019 and government stimulus packages for the private sector, schemes devised under Vision 2030 to boost employment levels of Saudi workers and create new opportunities for local businesses look set to bear fruit. A range of planned infrastructure projects are set to begin construction. At the same time, major industrial companies are delivering on pledges to increase reliance on local companies in their supply chains. “Saudi unemployment…

Analysis

Starting small: A key role is played by small and medium-sized enterprises (SMEs) in fostering new job opportunities and economic growth
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The role of SMEs is being re-evaluated in the light of Vision 2030, which has made boosting their contribution to GDP a key part of its strategy to create opportunities in a thriving economy. A new government agency, the SME Authority (SMEA), was created in October 2015 to champion small businesses. SMEA notes that while in many advanced economies SMEs contribute 70% of GDP, the Kingdom’s smaller firms generate 20%. Many small businesses in Saudi Arabia are hampered by complex regulatory…

Analysis

Broad horizons: Government reforms are taking place to improve infrastructure, and redress regional and gender imbalances
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The comprehensive reforms taking place across Saudi Arabia’s economy include strategies to nurture the development of a broader industrial sector, while also improving the employment prospects and living standards of citizens. Particular focus is being paid to industries that can provide opportunities for young Saudi citizens and residents of regions with high unemployment. Companies helping to address these issues can access a range of incentives including soft long-term loans, loan guarantees…

Overview

Into high gear: Economies around the world are preparing for the opportunities and challenges brought about by the next industrial revolution – Saudi
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The global economy is entering the Fourth Industrial Revolution (4IR), or Industry 4.0, based on the application of new digital and automated technologies in production processes and service delivery. These changes are presenting emerging markets with opportunities such as improved productivity, as well as risks, namely reshoring and the displacement of human labour by automation. Wealthier emerging markets, such as the Gulf states, that have the resources to invest in new technologies, and those with better established manufacturing sectors, such as countries in Southeast Asia, appear best placed to reap the benefits of the 4IR. Many…