The Kingdom of Saudi Arabia needs more cloud computing, more Big Data, and more IoT. This is according to our research at the Tau Institute. The nation does not finish well in our research, yet has a great chance to improve things right at the present moment. Can it? Will it?
Saudi Arabia was represented at the recent G20 Summit in Brisbane, Australia, presenting a plan with a call to “deepen and accelerate the pace of economic diversification” while enrolling some 450,000 students in technical and vocation centers by the year 2020.
The country’s rulers plan a “renewed focus on quality” (rather than quantity) and technological development when it comes to its non-oil exports, and seeks more outside investments through the creation of numerous new “free zones.”
The House of Saud also wishes to reduce its own consumption of oil and natural gas, according to the Comprehensive Strategy it presented in Brisbane.
Setting the Scene
There have been many years since the first oil shock of 1973 when Saudi Arabia’s leaders would have been considered the most important at any global gathering. This was not one of those years, as recent drops in oil prices, brought on partially by increased oil production in the US and Canada, have made Saudi Arabia less of a top-level global mover and shaker.
Indeed, the Brisbane meeting was dominated by explicit Western criticism of Russia’s Vladimir Putin. The presence of Saudi Arabia may have seemed like a footnote.
But Saudi Arabia is a legitimate member of the G20, with the world’s 19th largest economy. Its per-capita income does not rank among the world leaders, though, as it wrestles with a situation in which new-found oil wealth since the 1970s has created a society of about 30% immigrant labor among a total population that’s approaching 30 million people.
Does Not Rank Well
Our research at the Tau Institute examines the relative ICT development and dynamics of 103 nations of the world. Saudi Arabia ranks 84th overall, slightly higher than its impoverished neighbor Yemen. Within its region, Saudi Arabia trails Jordan and the UAE, although to be fair, it does lead neighboring oil-centric nations Oman, Kuwait, and Iran.
Within its income tier (with per-person incomes between $13,000 an $25,000), Saudi Arabia ranks 17th of 18 nations surveyed. This is the toughest class in our research, with global leaders such as South Korea, Taiwan, Estonia, Poland, the Czech Republic, Chile and Uruguay all going gangbusters as they develop their ICT environments and overall economies.
Given its relatively small population, the overall challenge in improving Saudi Arabia’s ICT infrastructure is middling, similar to that of Turkey, Jordan, and Mexico.
The Challenge Ahead
We believe in the fundamental theorem that aggressive ICT development acts as a trigger to economic growth and societal development. So naturally, we recommend that the Kingdom make ICT development as an explicit goal.
Technology can also act as a driver of government transparency and be quite disruptive, something that Saudi Arabia’s leaders will not want to hear. The society faces great stresses, along religious lines as well as the publicly stated problem of reducing the amount of immigrant labor within its population. Both of these issues – religious and demographic – are potential tinderboxes.
Saudi Arabia announced its Tenth Development Plan, covering the years 2015-2019, prior to the Brisbane Summit. The plan calls for infrastructure development of about $100 billion, up 76% from the previous five-year plan. In the end, the Kingdom says it wishes to develop “a national strategy and action plan for a gradual shift to a knowledge-based economy,” creating 1.3 million new jobs for Saudi citizens.
Yet only 3.4% of its planned infrastructure development is earmarked for “transportation and communications,” with nothing explicitly devoted to ICT or, say, the way the Internet of Things could be used to develop its transportation vision. There are modern trains in this vision, though, and we’d expect the IoT to play a role here. Implied here is the notion that the Kingdom should commit itself to cloud computing and all that goes with it to create an ICT infrastructure suitable for the 21st century.
Saudi Arabia has a high level of wealth and relatively low population level that, in theory, gives it a better chance than most countries to develop economically and societally over the next few decades. The country’s leaders seem to be clear-eyed about the need to diversify its economy as the glory days of oil start to fade in the rear-view mirror. Looking ahead, it’s also clear the nation’s leaders face a tremendous societal challenge as they work to develop the nation’s economy.
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