KSA's Experience Economy: A New Frontier for Global Businesses

In the last blog, I shared my observations about and experience of the tech and innovation landscape in Saudi Arabia. Where I made mention of the overarching supportive role of the government, and emphasized on the potential of global collaborations, it is pertinent to gain an insight into the expansion opportunities the Kingdom holds for international businesses and startups, alike.

The Trillion-Dollar Club

Carrying its trillion-dollar status, Saudi Arabia topped the G20 in GDP growth in 2024-Q1, with the non-oil sector contributing significantly. Centered around the Vision 2030, the rapid economic transformation, driven by diversification and substantial investments across various sectors, is reshaping the country’s economic landscape and more importantly, its strategic global position.

To supplement this, in the World Competitiveness Index, the country climbed to 16th place – ranking first in employment and labor force long-term growth, social cohesion, and the percentage of the population with internet access. These indicators clearly indicate the Kingdom’s promise for businesses looking to establish a mark here.

Saudi Arabia: An Experience Economy

With double-digit growth in market spending on technology and government sector’s investment in innovative technologies, KSA is all set as the fastest-growing information technology market in the MENA region.

The focus on building the Kingdom as an “experience economy” has seen facilitation for Artificial Intelligence, big data analytics, cyber security, and Cloud Computing and SaaS. ?This has been in the shape of initiatives like the Saudi Data and Artificial Intelligence Authority (SDAIA), underlining its commitment to becoming a leader in AI and data analytics, and events like LEAP, besides other enabling avenues.

The thriving nature of the tech sector established, promising scope of scalability and growth for businesses and startups in the space, it is important to look at different areas they can operate in and also catalyze cross-sector growth.

Tourism:

Under the National Tourism Strategy, Saudi Arabia aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s GDP from 6% to 10%.? The Saudi Tourism Authority has been actively promoting the Kingdom as a global destination, creating exciting opportunities for businesses in this space. Subsequently, there has been a dramatic 390% increase in the demand for tourism activity licenses in 2023.

Almatar ( https://almatar.com ), a local unicorn offering a tech platform to simplify travel planning reflects the scope for startups in the domain. High-end consumer-benefit marketplaces and travel service providers such as Pastor & Co. are gearing up for major expansion in Saudi Arabia. HALO Space, a Spanish startup focused on near-space tourism, preparing to expand its testing and assembly operations to Saudi Arabia is a latest example of traveltech startups expansion in the market.

Renewable Energy:

Aiming to generate 50% of its energy from renewable sources by 2030, this sector is expected to contribute around 6% to the GDP. Clean energy is expected to get USD 235 billion in funding, up from a previous forecast of USD148 billion, with the increase driven mainly by renewables as Saudi Arabia more than doubles its 2030 capacity target.

The Saudi Green Initiative showcases the Kingdom’s commitment to sustainability, presenting a multitude of opportunities for businesses in the renewable technologies space. In addition, the futuristic NEOM is to be an epicenter of works around renewable energy. In a recent move China’s JinkoSolar has partnered with Saudi Arabia’s Public Investment Fund to build a state-of-the-art manufacturing plant for high-efficiency N-type solar cells and modules, with a USD 1 Billion investment. Similarly, on a local entrepreneurial level, Mirai Solar – a solar technology startup that specializes in expanding solar energy use beyond conventional applications is a part of the Mega Green Accelerator.

?Healthcare:

Similar to tourism and renewable energy, the healthcare sector is evolving at a fast-pace. Under the umbrella of the Healthcare Sector Transformation Program, comprehensive measures are being put in place to transform the healthcare system as more effective and integrated. With the establishment of the National Health Information Center (NHIC), the focus is on digitizing healthcare services, opening doors for innovative health tech solutions.

Digital Treatment & Care is the standout segment, underscoring the nation’s increasing reliance on telemedicine and remote health services, propelled by governmental initiatives aimed at expanding healthcare access. Additionally, lifestyle changes especially among the youth point towards an increased demand for digital fitness and well-being applications.

It is marked by application of emerging technologies including AI, data-analytics and SaaS for healthcare products and services, underpinned by collaboration and partnership. As an example, Bioniq - UK’s healthtech offering personalized supplements based on blood test data, has entered a strategic partnership with Al Borg Diagnostics to enter the KSA market.

Moreover, The Global Health Exhibition ( https://www.globalhealthsaudi.com), scheduled for later this month, sets the stage for global health sector leaders, policy-makers, practitioners and startups alike, making KSA the hub of progress in healthcare innovation.

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ReLearn

The time is just right and environment conducive for global businesses and startups to expand and explore KSA’s thriving emerging technologies market and play a role in shaping its tourism, energy and healthcare sectors.

In my next blog, I will be writing about the opportunity more conventional industries hold for global businesses in Saudi Arabia.