How technology will inevitably play an important role in Saudi Arabia

The Middle East has been boosting its economy with new and emerging technological innovations in recent years. Government and private sectors have been making huge investments in 5G, artificial intelligence (AI), the internet of things (IoT), blockchain, cloud computing and cybersecurity. IT spending in the Middle East and North Africa (MENA) region is forecast to increase to $1.7bn in 2022, surging 2.6 per cent from last year, according to Gartner.

“In 2022, digital transformation projects will advance moderately. Underpinned by the Gulf Cooperation Council (GCC) country visions, the rapid shift of the GCC countries from an oil-exporting economy to a knowledge-based economy will be a major influence,” said Miriam Burt, managing vice president at Gartner.

Meanwhile, according to Dell Technologies Digital Transformation Index 2020 report, the UAE and Saudi Arabia lead the world in digital transformation cutting-edge technologies. A total of 92 per cent of Saudi government IT decision-makers agreed that the Covid-19 pandemic had accelerated their digital transformation over the past year, according to a YouGov survey launched by SAP.

“Saudi Arabia will continue to play a pioneering role in creating and launching smart city projects across the kingdom, redefining citizen services and inventing new business models that are powered by data and AI,” says Vijay Jaswal, chief technology officer at Software AG Middle East and Turkey.

Accelerating towards digital transformation
Technology plays a key role in Saudi Arabia’s Vision 2030, with digital transformation projects rising dramatically in recent years. Last year, the Saudi government announced a series of technological programmes totalling more than $1.2bn aimed at improving the digital skills of 100,000 Saudi youth by 2030 with a focus on cybersecurity, programming, AI and gaming.

In line with its vision, Saudi Arabia recently hosted the region’s largest technology event – LEAP. It took place at the Riyadh Front Expo Centre from February 1-3 and featured over 500 prominent speakers, who included Amer Al Qahtani, CEO and business development, Saudi Authority for Data and Artificial Intelligence (SDAIA); Talal Al Kaissi, CEO, G42 Cloud; Eugene Kaspersky, CEO and co-founder, Kaspersky; YoungCho Chi, president and chief innovation officer, Hyundai Motor Group; Maëlle Gavet, CEO, Techstars; Peggy Johnson, CEO, Magic Leap; Richard Houston, CEO, Deloitte North and South Europe; Dr Nabeel Koshak, CEO and board member, Saudi Venture Capital Company; Dr Makaziwe Mandela, founder, House of Mandela Family Foundation; Salman Al Badran, CEO, Mobily; and Ghinwa Baradhi, chief information officer-MENAT, HSBC.

The event is part of a strategic effort led by Saudi Arabia’s Ministry of Communications and Information Technology (MCIT), the Saudi Federation for Cyber Security and Programming (SAFCSP), and its organiser Informa Markets to transform the country’s economy to position it as a tech powerhouse. The event, which was backed by the Saudi government and the country’s top investors, was aimed at improving business prospects by empowering the funding of ideas and developing tech startups.

“As Saudi Arabia begins to emerge from the pandemic, the kingdom is playing an important role in creating a platform for diversified entrepreneurship in emerging sectors,” said Ahmed Al-Faifi, senior vice president and general manager – Middle East North Africa, SAP, in a statement.

Investment in innovation
To further secure the kingdom’s position as the MENA region’s largest digital economy, Saudi Arabia at LEAP announced over $6.4bn of investments in future technologies and entrepreneurship. Aramco Ventures, Saudi Aramco’s venture capital arm, announced the formal launch of Prosperity7, a $1bn diversified growth fund that will provide its portfolio companies with the funding and connections they need to scale and enter new markets to attain global reach.

Meanwhile, as part of its investment, NEOM Tech & Digital Company unveiled plans for the launch of XVRS, a first-of-a-kind digital twin metaverse platform. It is the first cognitive metaverse developed on one scalable platform, including real-time translation and humanoid robotic avatars. XVRS is part of a $1bn investment by NEOM Tech & Digital Company in AI-driven technology, including M3LD, a data management platform that empowers users to regain control of their data.

Meanwhile, stc launched MENA HUB, a $1bn investment in submarine cables and data centre infrastructure. To encourage foreign direct investment, the company will manage data centres and continue to invest in additional ones around the region.

LEAP also saw the launch of ‘The Garage: Start-up District’. This initiative is a combination of physical location, startup incubator, and accelerator, that will provide startups with grants investment, marketing and training support and full-service workspaces. In addition, it will also offer access to deep-tech labs, talent and research networks, amongst other incentives to empower local and international startups.

Furthermore, J&T Express Group, a logistics company, announced a $2bn investment alongside eWTP Arabia Capital and other partners. J&T will build its MENA headquarters in Riyadh and will provide sorting centres, auto storage systems, air cargo terminals, e-commerce industry parks, and other industrial facilities and infrastructure as part of the investment.

“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. They mark the next level of growth for the digital economy in Saudi Arabia, the MENA region’s largest technology and digital market,” said Abdullah Alswaha, Saudi Minister of Communications and Information Technology, during the event.

In his keynote address, the minister also noted how Saudi Arabia is the regional leader for technology talent, with a potential to generate over 318,000 jobs in the sector. He added that the percentage of women in the ICT workforce has also jumped to 28 per cent in recent years.

Saudi Arabia is also home to some of the most significant investments in cloud technology, with leading hyper-scale cloud providers including Google, Alibaba, Oracle and SAP investing over $2.5bn in the country’s cloud ecosystem.

Reinventing the digital economy
Developing a robust digital economy serves as a catalyst for promoting non-oil sectors, which in turn will lead to the growth of the economy. During the event, the Digital Content Council unveiled Ignite, a new initiative that aims to turn the kingdom into a major digital entertainment and media production powerhouse. The programme will build a robust ecosystem to attract digital content firms and help the local media and content development industry thrive.

Ignite seeks to boost the size of the Saudi Arabian digital content sector in gaming, music, video, and advertising. The $1.1bn initiative would include incentives such as financial support for local, regional, and international businesses and startups, infrastructure development, talent development programmes, and revised policies and regulations to help the industry grow. Over 4,400 people are expected to be upskilled over the next three years through training courses in three industries – gaming, films and digital advertising. The training programmes will ensure that the kingdom develops the skillsets necessary by the industry while also providing local youngsters with the capabilities they need to improve their employment opportunities.

Saudi also announced the launch of WiFi 6E, supported by the largest spectrum available for WiFi of any country worldwide. A statement said that the combination of state-of-the-art technology and a record amount of spectrum would allow the country to benefit from the fastest achievable WiFi speeds globally (2.4 Gbps). Enabling this advanced connectivity is expected to quadruple WiFi’s overall contribution to Saudi Arabia’s GDP, rising from $4.7bn in 2021 to more than $18bn by 2030.

Other connectivity-boosting activities that will accompany the kingdom’s WiFi upgrade include the first regional testing of low earth orbit satellite technology to extend reliable coverage to remote areas of the kingdom. The event also noted that the Communications & Information Technology Commission would organise a frequency auction in the first half of the year, a development that is likely to place Saudi first globally for spectrum available 5G networks and mobile communications. 5G technology’s contribution to GDP is estimated to grow from $1.4bn in 2021 to more than $15bn by 2030.

Enter the private sector
LEAP also witnessed private sector organisations introducing new solutions and initiatives. Speaking to attendees, Huawei’s rotating chairman Guo Ping said that the company would soon build a cloud region in Saudi Arabia. The new cloud region aims to create further social and economic value in the kingdom and the wider Middle East in line with their digital development strategies. Huawei has also pledged to cultivate talent for the regional AI industry.

Ping also said that Huawei would support the kingdom’s effort to become one of the first countries to have a large-scale AI model. “This will help the country build more intelligent platforms in domains like Arabic-language identification, pharmaceutical R&D, disease detection, and many others,” he added.

On the other hand, Trend Micro, the cybersecurity company announced the opening of its regional Middle East and Africa (MEA) headquarters in Riyadh, a security data lake, and other investments totalling over $50m.

Meanwhile, Software AG showcased a gamified setup of an IoT-powered smart warehouse. Visitors got to see IoT in action and an experienced supply chain with connected equipment to move goods with efficiency managed by its IoT platform. “The showcase demonstrated a connected digital ecosystem, both cloud and on-premise, that enables enterprises and organisations to tackle challenges holistically and truly turn data into business value,”
says Jaswal.

According to CITC, by the end of 2022, 82 per cent of medium- and large-organisations in the kingdom are expected to adopt an IoT solution for their business. “One of the top three drivers for the adoption of IoT solutions by the kingdom is elevating customer experiences amongst other priorities. IoT offers immense opportunities to the enterprises in the kingdom, particularly for the manufacturing, automotive, transportation and logistics, retail, public sector and healthcare industries which have already started to utilise IoT solutions and are expected to further benefit from further adoption of IoT technologies,” says Moussalam Dalati, general manager for Liferay Middle East.

“We will continue to play a major role in the kingdom’s smart city projects for smart city residents. In fact, one of our most recent projects in the country is a fully digital, AI cognitive enabled smart office for one of the most prestigious government entities in the country,” adds Dalati.

Multiple partnership agreements were also signed during the event. While SAP signed a partnership with stc for enhanced services and digital solutions, VMware signed a memorandum of understanding with Aramco to support collaboration across cloud and end-user computing, cybersecurity and digital transformation in the areas of energy and green technologies. A new partnership to build startups between Unifonic and TheSpaceKSA, called UnifonicX, was also revealed.

LEAP also provided startups with a pitching competition to promote their innovative business ideas to powerhouse venture capitalists and leading international investors, to win a share of the $1m prize fund. The Rocket Fuel Start-up Competition saw seven startups taking home cash prizes for impactful new business ideas, scored on creativity, innovation, potential, functionality and impact on people and society.

One giant LEAP
Over the next few years, technology will inevitably play an increasingly important role in advancement, growth, and innovation. Having revealed its ambitious tech goals, Saudi Arabia has taken ‘one giant LEAP’ forward into an audacious new world – with several more on the horizon.