Member Focus: The Kingdom of Saudi Arabia – A Journey Towards Industrial Transformation and Sustainability

There are huge opportunities here because the Kingdom of Saudi Arabia is on a mission to transform its industrial sector into a powerhouse for economic diversification and sustainable growth. This ambitious vision is driven by several key factors:

Vision 2030: This national roadmap sets the stage for increasing the number of factories to a staggering 36,000 by 2035, with a significant portion being fully automated. This initiative aims to create a dynamic and innovative production landscape.

National Industrial Development and Logistics Program (NIDLP): This cornerstone program of Vision 2030 serves as a roadmap for the industrial transformation. The NIDLP focuses on four key pillars: industry, mining, energy, and logistics. By promoting advanced manufacturing, sustainable practices, and a robust logistics network, the NIDLP lays the groundwork for industrial growth.

Advanced Technology Adoption: Saudi Arabia is embracing cutting-edge technologies like artificial intelligence, 3D printing, and robotics. This puts them at the forefront of Industry 4.0, a revolution that promises greater efficiency, flexibility, and interconnectedness within manufacturing systems.

Investment Surge: Since the launch of Vision 2030 in 2016, the Kingdom has witnessed a remarkable $132 billion investment in manufacturing. This signifies a strong commitment to building a robust industrial base.

The Saudi government actively encourages international partnerships through various financial instruments. WAITRO members, International Industrial organizations and institutions, can benefit from programs like:

• The Industrial Clusters Development Program: This program provides grants and facilitates access to land for companies establishing themselves within designated industrial clusters focused on priority sectors like advanced manufacturing and clean technology. WAITRO members with expertise in these areas can partner with local players to leverage these benefits.

• The Saudi Industrial Development Fund (SIDF): This government agency offers loans and loan guarantees specifically designed to support industrial ventures in the Kingdom. WAITRO members collaborating with Saudi partners can explore these financing options to make their joint projects more financially attractive.

• The National Technology Development Program (NTDP): This program provides grants for research and development projects focused on innovation and technological advancement. WAITRO members with cutting-edge technologies can partner with Saudi institutions to secure funding for collaborative R&D initiatives that contribute to Saudi Arabia’s industrial transformation goals.

Experts emphasize that achieving true excellence requires a comprehensive strategy that goes beyond simply adding robots and automating factories. Here are some additional aspects crucial for success:

● Systems-Based Approach: Integrating automation, digitization, circularity (resource efficiency), and talent development is key to building a resilient and sustainable manufacturing ecosystem.

● Workforce Development: Upskilling and reskilling the workforce are essential to ensure they possess the necessary expertise to thrive in the new industrial landscape. Educational institutions need to adapt their curriculums to bridge the skill gap.

● Policy Support: Government policies play a vital role in incentivizing the adoption of Industry 4.0 principles through initiatives like “future factory initiative”. This includes focusing on areas like workforce development, energy efficiency, and providing the right framework for a smooth transition.

Saudi Arabia recognizes the importance of international partnerships in achieving its industrial goals. Collaborations with various countries will foster a diverse pool of expertise and accelerate industrial diversification.

The National Industry Strategy, a cornerstone of Vision 2030, outlines a multi-pronged approach to propel the industrial sector forward:

● Global Competitiveness: Fostering innovation and optimizing domestically produced goods are crucial steps to make Saudi industries competitive on a global scale.

● Sustainable Growth: Environmental consciousness plays a key role. The strategy encourages the adoption of clean technologies and responsible manufacturing practices.

● Local Content Development: Increasing the domestic production of goods and services is a major goal. The target is to raise the share of locally manufactured products to 60% by 2025.

The initiatives are already yielding positive results:

● Manufacturing Activity Surge: Saudi Arabia’s manufacturing sector witnessed a robust 18.5% growth in December 2022, reflecting a strong embrace of transformative technologies.

● Job Creation: Over 193,000 new jobs have been created within the industrial sector, driven by the issuance of thousands of licenses for new projects.

A cornerstone of Saudi Arabia’s industrial transformation is its commitment to sustainable practices and achieving net zero emissions by 2060. The Kingdom recognizes that economic growth must be balanced with environmental responsibility. This is reflected in several government initiatives:

● The Saudi Green Initiative: This ambitious national program spearheads the country’s environmental efforts. It focuses on increasing renewable energy production, reducing carbon emissions, and combating desertification.

● Circular Economy Initiatives: The government is promoting resource efficiency and waste reduction within industries. This includes encouraging recycling, upcycling, and the adoption of closed-loop manufacturing processes.

● Green Financing: The government is providing financial incentives and facilitating access to green financing for industrial facilities that invest in clean technologies and sustainable practices.

By implementing these initiatives, Saudi Arabia is not only safeguarding its environment for future generations but also positioning itself as a leader in sustainable industrial development.

The Ministry of Investment (MISA) streamlines licensing, offers tax incentives, and provides ongoing support, making it easier for global partners to contribute their expertise and technology to the Kingdom’s economic transformation. This fosters collaboration, where foreign expertise and technology bolster the Kingdom’s ambitions. MISA also prioritizes local content development, aiming for 60% domestic production by 2025, ensuring a win-win situation

New Whys, a Saudi innovation venture builder, has launched a pioneering Industrial Innovation Hub, that is established with a clear vision to become a premier platform for connecting, collaborating, and empowering Saudi Arabia’s industrial sector, propelling it towards a future driven by cutting-edge technologies and a highly skilled workforce. As an associate member of WAITRO, and in collaboration with international renowned partners specialized in industrial innovation and local industry leaders, we are on a mission that seeks accelerating the industrial transformation.

Vision 2030’s focus on international collaboration perfectly aligns with WAITRO’s core mission of fostering cross-border partnerships in the industrial sector. As a local Saudi member of WAITRO network, we are exploring partnerships with members across the globe who possess a wealth of expertise in advanced manufacturing, sustainable practices, and cutting-edge technologies, and have an interest or plan to penetrate the Saudi market.

As a local partner driven by innovation and cross-border 2-way bridge building, New Whys Industrial Innovation Hub is on a mission to join forces with international industrial organizations and institutions to capture the opportunities presented by Saudi Arabia’s industrial transformation. Together, we offer a comprehensive suite of localized market positioning designed to streamline the partnership formation process. This includes, but not limited to, local market analysis and research, soft-landing, access to investment, strategic partnerships, joint R&D, human capacity building and more.

Samer Khraim, samer.khraim@newwhys.com