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In addition to its oil reserves, Saudi Arabia has abundant sources of natural gas which are used to generate electricity. In fact, crude oil accounts for only 39% of Saudi electricity generation, with natural gas providing 61%.

Background: The Middle East produces 781 billion cubic meters of natural gas, contributing to 22% of global natural gas production. Natural gas consumption in the region accounts for 18% of global gas consumption. Natural gas now accounts for more than half of primary energy consumption in the Middle East. However, Saudi Arabia intends to increase solar and nuclear power generation to increase its available capacity from 58 gigawatts (GW) to 120 GW by 2032.

Despite the global shift to renewable resources, there remains increasing demand for oil around the world. Indeed, oil prices have recently hit a seven-year high following talks with the Organisation of Petroleum Exporting Countries (OPEC).

Background: OPEC members control nearly 80% of known oil reserves. OPEC adopts a pricing-over-volume strategy to control oil prices. According to a survey of six Asian traders, Saudi Arabia raised oil prices for Asian and US buyers just days after OPEC and its members unexpectedly increased supplies in 2021.

Saudi Arabia has been increasing its focus on economic development through Optimizing Energy Generation, including the increased use of alternative energy sources. The Kingdom is highlighting investments in renewable energy sources such as solar, wind, waste management and geothermal.

Background: Saudi Arabia plans to generate 50% of its energy from renewable sources by 2030. Over the next decade, Saudi Arabia expects to attract more than $20 billion in renewable energy investments.
The Saudi Green Initiative aims to turn one of the world's largest oil producers into a "global leader in forging a greener world". This is part of an effort to diversify the economy's reliance on oil. The crown prince has indeed acknowledged the Kingdom's role in advancing the fight against climate change.

The number of digital start-ups in Saudi Arabia is rapidly increasing. This has been driven by available investment funds and the implementation of state-of-the-art ICT systems. These have helped new start-ups to grow. The process is part of Saudi Vision 2030, which aims to transform the country's economy away from oil. This can provide opportunities, especially for tech-based companies.

Background: The Kingdom's start-up ecosystem, particularly in the tech sector, has matured dramatically in a relatively short period of time. According to research firm Magnitt, relevant funding was limited to about $8 million per year in 2010, but then soared to over $150 million by 2020 (a 35% year-on-year increase), and further growth is expected to happen.
Saudi Arabia has public funds which collaborate with a diverse group of private investors, both on a global and local level. The Commission for Small and Medium-sized Businesses offers an online fundraising portal that connects private investors with start-up founders.

Saudi Arabia is regarded as a leader of Middle East consumer trends. The Kingdom is implementing further market digitalization in response to consumer demands and needs. The Saudi government acts to encourage these developments, acting as a catalyst for opportunities for new companies.

Background: Saudi Arabia is known for having some of the highest levels of social media usage in the world. It has recognized that younger consumers exhibit different behavior and consumption patterns. They value seamlessness and convenience. This move has been further pushed by the coronavirus pandemic, allowing new businesses to enter markets to deal with an increasingly digitalized environment.

There is a range of recent developments that demonstrate the Kingdom’s commitment to further its digital infrastructure and overall ICT. As reported by the U.S International Trade Agency, there is a range of projects in which foreign entities can become involved.

Background: Saudi Arabia announced the launch of a major programme in August 2021 to support the country's ICT sector through three major projects, including artificial intelligence (AI). The first and most crucial of these projects, called "Himma" and valued at $666 million, intends to improve the technology sector by presenting twenty innovative products developed by entrepreneurs and startups. "Qimma" and "Tuwaiq," The other two projects are designed to aid AI and capacity building.

In 2022, Travel, Tourism, and Entertainment remains a priority sector under Saudi Arabia’s Vision 2030 economic diversification initiative. Saudi Arabia is one of the oldest and most famous spots for pilgrimage tourism due to its Islamic heritage. The tourism industry has understandably been impacted by the COVID-19 pandemic. Nevertheless, the country remains optimistic about Saudi Arabia’s Vision 2030 economic reform plan, which aims to make tourism a key part of the Kingdom’s economy.

Background: According to the World Travel and Tourism Council, Saudi Arabia was the fastest-growing tourism market in the Middle East in 2019. The Kingdom welcomed over 17 million tourists in 2019. To maximize the benefits of religious pilgrimages, the government plans to expand its capacity to accommodate more Hajj and Umrah pilgrims, from around 10 million in 2019 to more than 30 million by 2030. Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud aims to re-orientate the Saudi economy away from its dependence on oil revenues with a new focus on tourism.

Saudi Arabia has a young and highly connected population driving the development of new start-ups. Further, fintech focused opportunities are also growing. Indeed, the COVID-19 pandemic has driven more elements in the country to going digital. Young Saudi Arabians are grabbing the resulting opportunities to create start-ups.

Background: According to Arab News, start-up funding jumped from $8m in 2016 to $150m in 2020. The Kingdom dominated the start-up investment market in the Middle East and North Africa (MENA) region during 2021. The B2B e-commerce sector drew the most interest, with $37.6 million raised across the MENA region. The Fintech start-ups also raised substantially more investment than previously.

Saudi Arabia, also referred to as the Kingdom of Saudi Arabia, is the world's second largest oil producer and the largest oil exporter. It controls the world's second largest oil reserves, according to the U.S. Energy Information Administration. The Kingdom is categorized by the World Bank as a high-income economy with a high Human Development Index and is the only Arab country to be part of the G20 (Group of Twenty) economies.

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Last updated: 29.04.2022 - 16:15
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