Saudi Arabia taps tech to wean economy from oil dependency

It may be a huge expanse of desert, but Saudi Arabia is taking its profile as a tech hub to a new level, showing the world that this dusty corner of the globe can be a fertile ground for cutting-edge innovation.

 This rising stature as key tech player in the Middle East and North Africa (MENA) region is attributable to a host of factors, key of which is substantial government support that has seen Saudi Arabia give regional countries of Israel and United Arab Emirates a run for their money in the realm of innovation.

Thanks to aggressive adoption of technology, the Kingdom of Saudi Arabia is now leapfrogging some of its biggest hurdles, with the latest government data showing that the country’s digital economy is now worth more than Sh4 trillion, equivalent to half of Kenya’s total Gross Domestic Product.

The tech-savviness of Saudi Arabia has been underlined at inaugural Leap22 tech summit in Riyadh.

Speaking during the inaugural Leap22 tech summit in Riyadh,

The country’s Minister of Communications and Information Technology Eng Abdullah Alswaha told the tech forum that time has come for the gulf country “to leap forward and chart a path towards a tech-powered economy rather than relying on petroleum”.

He said the country will be pumping over Sh700 billion into its technology ecosystem which will be utilised in research, support for startups and development of global tech products.

“These investments and initiatives are a manifestation of the Kingdom’s push toward the growth of the digital economy for the greater good of people, the planet and the prosperity of the MENA region,” Mr Alswallah said.

Predicting that the country’s technology could one day overtake the likes of Israel, he revealed that over 318,000 jobs in the technology sector have now been created, with a rate of participation of women in the ICT workforce hitting 28 percent in recent years.

The Digital Co-operation Organization (DCO), a multinational organisation whose members are Bahrain, Jordan, Kuwait, Nigeria Oman, Pakistan and Saudi Arabia announced the launch of the ‘DCO Start-up Passport’ to make it quicker, easier and less expensive for start-ups to do business across borders, opening up potentially lucrative markets with a combined population of more than half a billion people.

The special start-up passport, according to Deema Al-Yahya, Secretary General of the DCO, reduces administrative and financial burdens and accelerates corporate registration and other processes for entrepreneurs.

“Through this passport, they will be able to enter the markets of other DCO member states. This will further our mission of coordinating efforts and sharing expertise to grow the digital economy for the benefit of all nations.”

The new tech investments include the launch of Aramco Venture’s Prosperity7 fund worth Sh110 billion, with a similar amount from NEOM Tech & Digital Company.

“Prosperity7 will connect the dots through big ideas, top talents and disruptive technologies from around the world as we look beyond the energy value chain to areas like healthcare, education and blockchain, for viable solutions to the world’s most pressing challenges,” said Amin Nasser, CEO of Saudi Aramco.

In a world where the dynamics of Web3 and the metaverse dominate talk on future tech, NEOM announced the launch of the world’s first cognitive metaverse, XVRS that will serve residents and visitors of the smart giga-project, and M3LD, a personal data management platform that gives back control of data to the user.

Telecommunications company Stc announced a MENA Hub, another Sh110 billion investment in regional connectivity and infrastructure, which will support Saudi Arabia’s digital and cloud sector. The billions will go into infrastructure of submarine cables and data centres, which will boost Saudi Arabia’s current position as the region’s digital hub.

Stc revealed a new strategic partnership with Huawei, which will see manufacturing facilities for data center equipment and hardware established in Saudi Arabia, to boost capacity in the high-tech industry.

It is also meant to create local supply chains for technology hardware and increase the adoption of new technologies by Saudi businesses, which could significantly support the increase in local content and contribute to the achievement of the objectives of Saudi Vision 2030.

Leap22 also saw the launch of The Garage, a new platform for start-ups, investment and entrepreneurship by King Abdulaziz City for Science and Technology (KACST). The Garage seeks to create a full-service environment for local and international start-ups, to help them grow to become the leading technology companies of the future.

“The Garage is inspired by the humble beginnings of some of the biggest companies in technology today, and aims to provide everything that start-ups need to grow their ideas, to become the next global technology giants,” said Dr Munir Eldesouki, president of KACST and Head of the Research, Development and Innovation Authority foundation team.

J&T Express Group, a global logistics company, announced an investment of Sh220 billion with eWTP Arabia Capital and other partners.

“The investment will see J&T establish its MENA headquarters in Riyadh, and set up an extensive network of smart logistics and distribution facilities that will extend Saudi Arabia’s reach as the regional center for advanced logistics.”

Google, Alibaba, Oracle and SAP have invested over Sh300 billion in cloud in the country, with venture capital investment in Saudi Arabia in 2021 exceeding the total for 2019 and 2020 combined.

The Leap22 summit has garnered high attendance from around the world, tech professionals from global companies such as Microsoft, Ericsson, SAP, IBM, Zoho, Huawei, Stc, Cisco, Aramco, Mobily, PwC, Zoom and BCG all meeting to share tech knowledge.

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