Insight - Saudi Arabia’s digital revolution sparks openings for Australian tech
The landscape for digital technology in the Kingdom of Saudi Arabia (KSA) is evolving fast.
The Saudi Government has long recognised the need to pivot from an oil-based economy to a diversified economy. It sees advanced digital technologies as a critical transition tool for a successful and stable post-oil future.
Today, the Government believes that rapid technology adoption is essential to achieving national goals – as set out in the Vision 2030 plan. Recent developments show the scale of ambition:
- A new digital economy policy that creates a roadmap for investments
- A cloud-first policy for Government IT spending
- The announcement of new city called ‘The Line’, which will be cashless, 100% 5G, and will pioneer AI-driven environments
- Large-scale investments by tech giants including Alibaba and Google.
- Labour reforms designed to attract and retain skilled expatriate workers so they can switch jobs without an employer’s permission.
This pivot towards technology has created significant new opportunities for Australian tech companies. These include: artificial intelligence, machine learning, data analytics, and cloud computing solutions for education, government, healthcare, energy, and transport.
If you are an Australian technology firm with experience on medium to large contracts – and particularly working with governments – and want to find out more, please contact: Mohsen El Bahaie in Riyadh.
Saudi Arabia pivots from oil & embraces high-tech
The economic outlook for the Kingdom of Saudi Arabia is changing quickly. The Government wishes to reduce the country’s long-term dependence on oil, and envisages a world-class digital economy. Many believe the period of peak oil will occur this decade. In response, the Government wants to raise the share of non-oil exports from 16% to 50% by 2030.
The Government has embarked on reforms that encourage a more advanced use of technology. This includes a wide range of e-government initiatives designed to help citizens navigate domestic bureaucracy.
The foundations for an advanced digital economy are well underway. Saudi Arabia’s 5G network currently ranks third in the world for network deployment and thirteenth globally for internet speeds. And the Government has plans to create cities that showcase Saudi Arabia as a premier, high-tech country.
A new digital economy policy
On 29 December, the Government of Saudi Arabia released its new digital economy policy. As part of the policy, the Saudi Government states that it sees the digital economy as ‘an important means to promote non-oil sectors’, and help Saudi Arabia’s transition towards a diversified economy.
The new digital economy policy covers initiatives in infrastructure, skills and technology. And a new spirit of openness to overseas tech companies should mean that this new policy creates opportunities for Australian technology companies and specialists.
The policy reveals that the Government now has specific technology-related objectives for Saudi Arabia that include:
- Becoming a world leader in digital government
- The adoption of fintech solutions to enable a transition to a cashless society
- The provision of sandboxes for local and international companies to test innovative business models
- Upskilling the national workforce to increase job opportunities
- Using digital technologies to improve economic participation for people in remote areas
- Using digital technologies to improve female participation in the labour market[i]
Importantly, the Government aims to open markets, and become the first destination for digital investments in the Middle East region. This includes the active support of e-commerce.
Saudi Arabia’s showcase digital city
In January 2021, Saudi Arabia launched plans for a new city called, The Line. The vision is for a city of one million residents with no cars, streets or carbon emissions. The new city will feature ultra-high speed transit and autonomous mobility solutions.
Emerging technologies are central to the vision for this new city. According to official launch documentation: ‘The Line’s communities will be cognitive, powered by artificial intelligence (AI), [and] continuously learning new ways to make life easier.’
Two key features generate opportunities for Australian companies. The first is the conscious decision that multiple aspects of life should be powered by AI applications. This means there are prospects for creative AI solutions from overseas.
Second, the Line is envisaged as a natural and sustainable environment. There will be agricultural areas that support local food production. This creates opportunities for Australian agtech solutions, including in robotics and automation.
High-speed infrastructure & investment
Saudi Arabia is already an early mover into 5G infrastructure. Currently 45% of the country has 5G coverage. Global rankings give the country high marks, with capital city Riyadh rising briskly in international rankings. According to IMD Smart City Index for 2020, Riyadh rose from 71st place to 53rd in just one year for digital infrastructure.
Other metrics also show a fast-improving digital landscape. Saudi Arabia ranked first in the Arab world for AI in 2020, according to media reports that cite Tortoise Intelligence. In the same index, Saudi Arabia ranked 22nd globally, having risen seven places since 2019.
Saudi Arabia is also investing heavily in human capital through institutions such as, the National Information Technology Academy, the Misk Academy and the Saudi Digital Academy. These institutions offer numerous initiatives, training programs, hackathons and challenges.
This implies that Australian companies investing in IT businesses or solution delivery in Saudi Arabia will increasingly have access to highly skilled, locally trained, IT specialists.
Large investments from global tech
The technology landscape in Saudi Arabia is being transformed by major new investments from global tech giants.
- On December 21, 2020, Google Cloud signed an agreement with Saudi Aramco to set up cloud infrastructure in the country for the first time. The deal assigns a local strategic reseller, sponsored by Aramco, to offer cloud services to customers.
- Later in December, Chinese technology and retail giant, Alibaba, commenced an anticipated US$500 million investment program in Saudi Arabia. Alibaba’s cloud unit, Aliyun, and cross-border electronic trade initiative eWTP signed an agreement with Saudi Telecommunication Company (STC) to establish high-performance cloud services in Saudi Arabia.
- In February 2021, Netherlands-based technology company Philips deployed its IntelliSpace AI Workflow Suit and Philips IntelliSpace Discovery in Saudi Arabia in collaboration with Saudi Arabia Data and Artificial Intelligence Authority (SADAIA). The project aims to power AI solutions in Saudi Arabia’s healthcare system.
- In December, SDAIA signed an agreement with Dell Technologies that will help SDAIA deliver a range of technical solutions that involve AI, the cloud, data analytics and enterprise storage.
These investments signal that global tech has confidence that Saudi Arabia is genuinely open to overseas technology providers. They also create partnering opportunities.
A cloud-first policy
In October 2020, the Ministry of Communications and Information technology issued the KSA Cloud First Policy. The policy allows some government data to be stored in commercial data centres. The move is expected to triple the size of cloud activity in Saudi Arabia within 5 years, and it stipulates that:
- Civilian and government entities should consider Cloud solutions for any new IT investment.
- When adopting Cloud services (other than for secure data), government entities should consider approved Commercial Government Cloud Service Providers.
- Government entities must prioritise Cloud solutions in the following sequence: Software as a service (SaaS); Platform as a services (PaaS); then Infrastructure as a Service (IaaS).
SDAIA has launched an official cloud service, called DEEM. The DEEM cloud is designed to enable government entities to focus on developing their services while DEEM takes care of backend infrastructure. In effect, DEEM ensures that Government data is secure, and its existence helps central Government to contain spending on new digital infrastructure.
Currently DEEM is home to more than 109 government data centres. This concentration of Government cloud-service provision is expected to speed up data mining and the adoption of more advance AI applications. This again creates AI and data analysis opportunities for niche Australian tech companies.
Cloud cybersecurity controls (CCC)
Saudi Arabia is also developing its cyber control apparatus. The National Cybersecurity Authority (NCA) has published its cybersecurity cloud-controls (CCC) methodology. This explains the NSA’s design principles and lays out how Saudi CCCs will relate to international standards.
The new CCC publication brings clarity in a number of vital areas that highlight how cyber security will evolve in Saudi Arabia in the next few years. It includes:
- A data classification policy
- A personal data-protection policy
- A data-sharing policy
- A freedom of information policy
- An open data policy.
These policies are relevant because they bring increased transparency and security to data management in Saudi Arabia. This should give increased confidence to investors, businesses and citizens – and encourage citizens in Saudi Arabia to adopt new apps and tech solutions.
In turn, this implies that Australian cyber security specialists can have increased confidence in the maturity and development trajectory of cyber security in Saudi Arabia.
Austrade in Saudi Arabia
Austrade advisers in Saudi Arabia are continually monitoring events and evaluating opportunities for Australian technology companies in Saudi Arabia. They report that – when international travel resumes – the kingdom’s new visa on arrival system is likely to encourage commercial interest from around the world.
Until regular international travel resumes, our advisors will be happy to assist with specific enquiries.
For further information, please contact: Mohsen El Bahaie, who is based in Riyadh.
Saudi Arabia eGovernment Program
Saudi Data and Artificial Intelligence Authority
Open data portal
Ministry of Communication and Information Technology
National Digital Transformation Unit
While care has been taken to ensure the information in this document is accurate, the Commonwealth of Australia represented by the Australian Trade and Investment Commission does not provide warranty or accept liability for any loss arising from reliance on such information.
[i] Digital Economy Policy in the Kingdom of Saudi Arabia. Pages 2-5.