Saudi Arabia Makes A Big LEAP In Digital Transformation

Saudi Arabia Makes A Big LEAP In Digital Transformation

The ongoing LEAP, which is aimed at accelerating Saudi Arabia’s ambitions to expand its digital economy by 50 per cent, and grow its contribution to the wider economy by $13 billion, showcases the kingdom as a digital powerhouse


It’s hard to recall when Saudi Arabia wasn’t powering the Middle East digital transformation scene. You have to rewind six or so years to 2016 when the Kingdom launched its game-changing Saudi Vision 2030, a strategic framework to reduce its dependence on oil and diversify its economy.

Most of what was known about the Kingdom has been replaced by a series of reforms in the past few years. Digital transformation upends all aspects of Saudi society – from digitising government operations to building Giga-projects, such as Qiddiya and NEOM.

Setting the digital agenda for the Kingdom, positioning it as a tech hub, this week, the best of the global tech sector descended on Riyadh for the inaugural LEAP. The three-day tech conference that started on Feb 1 has brought together some of the tech sector’s top entrepreneurs.

Those attending the biggest tech event in the region include Raghu Raghuram, CEO of VMware; Börje Ekholm, president, and CEO of Ericsson; Carlo Ratti, founding partner of MIT’s Senseable City Laboratory; Eugene Kaspersky, co-founder of Kaspersky; Aongus Hegarty, president of international markets at Dell Technologies; and Guo Ping, the rotating chairman of Huawei, among others.

The wide-ranging topics addressed at the three-day event include sustainable digital future, fintech, health tech, AI, Industry 5.0, robotics, IoT, and the role of tech in renewable energy sources, which are finding new applications in the country every day.

Crucially, the conference has brought together more than 30 VCs, including early-stage investor Speedinvest, who will be looking at the potential of more than 700 startups, many of whom will be local firms.

Aimed at accelerating its digital economy by 50 per cent and growing its contribution to the wider economy by $13 billion, LEAP follows on from last year’s government Launch Program, which unveiled an array of initiatives to rapidly upscale the digital skills of young Saudis.

Investment in digital transformation

According to the Saudi Federation for Cybersecurity chairman, Faisal bin Saud Al-Khamisi, the conference will attract international investments into the Kingdom and accelerate digital transformation by developing and adopting the latest technologies and communications solutions. According to an IDC report, by 2023, digital transformation investment will account for 50 per cent of government and enterprise ICT investment.

More than $2.13 billion of foreign investment has poured into Saudi Arabia’s IT market. The fintech investments grew from around $144 million, which was quite sizable, in 2020 to almost $400 million in 2021.

“We invested in minds to bridge the digital skills gap. We trained more than 55,000 male and female trainees in qualitative digital skills as part of the Future Skills initiative,” said Assistant Minister Munir El-Desouki at the MCIT. Apart from hosting technology boot camps and other programs such as business accelerators, incubators, and innovation centres, MCIT launched the Women Empowerment Program and Future Skills Initiative.

Over the years, Saudi Arabia has made huge progress in e-government services.

With emerging technologies developing, many of the Kingdom’s government and public sector organisations are adopting innovative solutions. No wonder the Kingdom was named the Top Digital Riser among the G20 nations in the Digital Competitiveness 2021 Report.

For IT-decision makers in the Kingdom, according to a recent YouGov survey, the pandemic accelerated digital transformation by years, and there is no going back. The YouGov survey found that among the top three emerging technologies that the respondents said their organisations would prioritise in 2022 are AI and machine learning (77 per cent), the IoT (65 per cent), cloud (51 per cent ), predictive analytics (38 per cent), robotic process automation (36 per cent), and blockchain (35 per cent).

“The Kingdom’s National Strategy for Data and AI is already seeing a ripple effect, with 77 per cent of government IT decision-makers prioritising AI and machine learning for the next year to optimise operations, talent development, and citizen experiences,” Ahmed Al-Faifi, Senior Vice President and General Manager, Middle East North, SAP, said in a statement.

Technology initiatives

With almost 70 per cent of the Kingdom’s 34 million-strong population under the age of 30, tech giants are enabling large-scale digital adoption. In 2021, the Kingdom launched a series of technology initiatives worth over $1.2 billion to improve the digital skills of 100,000 Saudi youngsters by 2030. Tech giants, including Amazon, IBM, Cisco, Oracle, Informa, and Microsoft, announced their partnership with the Kingdom to create digital capability centres and innovation hubs for tech startups.

Cisco collaborated with the Saudi Federation for Cyber Security, Programming, and Drones to develop the digital skills of 8,000 trainers in cybersecurity and programming.

Drawing on these themes, Aramco and Advanced Electronics Company are promoting local digital businesses, enabling IoT technologies, computing and communication, robotics, drones, and semiconductors that complement the expansion of the digital ecosystem in the Kingdom. Aramco Namaat aims to complement various digital hubs in the country.

Accenture, Etisalat Digital, and Oracle also signed a memorandum of understanding to offer seamless digital transformation and cloud solutions for SMEs and large enterprise clients.

Unsurprisingly, ICT is a fundamental enabler of the country’s transformation journey, and spending is set to grow at a compound annual growth rate of 9.2 per cent between 2019 and 2024, to reach $46.6 billion, says GlobalData.

To accommodate the high demand for cloud services and become a computing powerhouse and digital hub for the region, the country plans to develop more than 1,300 megawatts of data centre capacity in the Kingdom by 2030. Amid the wave of digital transformation, tech adoption is taking place across all sectors. Last year, Saudi Arabia’s Tourism Development Fund (TDF) implemented Oracle cloud services in its cloud-first strategy. The fund of $4 billion, which supports the development of Saudi Arabia’s tourism industry, is also piloting AI to increase automation and improve employee and customer experiences.

While organisations are accelerating digital transformation initiatives, many create sustainable digital enterprises. Aramco and AVEVA are driving sustainability in the Kingdom, supporting the development and implementation of blue hydrogen and decarbonisation facilities in the country.

The global pandemic has revealed that early adopters of digital technologies are better positioned to respond to and recover from the crisis. In Saudi Arabia, both government and private enterprises are promptly moving towards a digital infrastructure. While the government enables remote healthcare, remote working, and distance learning, private organisations investing in big data and analytics, robotic process automation, and AI and machine learning ensure business continuity, providing consumers with products and services.

Organisations are working to make their IT infrastructure more scalable, software-defined, and resilient to further support business agility. IDC’s Saudi Arabia CIO Survey 2020 shows that organisations are aligned at the enterprise level around creating digital products and experiences, leading to increased investments in customer-facing solutions in terms of digital transformation maturity.

Undoubtedly, Saudi Arabia has been steadily increasing its focus on digital transformation, underpinned by the ambition to transform and innovate. In the coming years, the focus on digital transformation will intensify to attract new investors and bridge the digital divide, while meeting the needs of a rapidly evolving economy.

If you liked reading this, you might like our other stories
Company Closeup: The Story Of McAfee
Datatechvibe Explains: Internet Of Behaviours (IoB)