Saudi Arabia is undergoing a significant transformation under Vision 2030, the national agenda aimed at developing a diversified, knowledge-based economy and reducing the Kingdom’s reliance on fossil fuels. At the heart of this transformation is a focus on research, development and innovation (RDI), seen as a major catalyst for economic diversification and the generation of added value in the industrial sector.
Saudi Arabia’s commitment to RDI can be seen in its target to increase RDI investment from 0.5% of GDP in 2022 to 2.5% by 2040. This commitment is already yielding results: in 2022 Saudi researchers authored 59,000 research publications, with research output increasing by 25% annually between 2018 and 2022. Moreover, in 2023 Saudi Arabia entered the list of the top-50 most innovative countries, ranking 48th in the Global Innovation Index published by the World Intellectual Property Organisation.
Strategy
The Kingdom’s long-term RDI strategy is set by the Supreme Committee for RDI, which has been chaired by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud since its inception in June 2022. This committee brings together key ministers and stakeholders to help guide the Kingdom’s innovation agenda through strategic investment and collaboration. In close cooperation with the committee, the RDI Authority (RDIA), which was established in June 2021, operates as the national RDI enabler, legislator and regulator, as well as the primary funder of RDI projects.
The upcoming national RDI strategy, pending Cabinet approval as of November 2024, is expected to be underpinned by actions across several pillars: improving human capital development, boosting funding for innovation, building a robust innovation ecosystem, supporting collaboration and open innovation, and positioning the private sector as the major driver of innovation in the medium-to-long term. Taken together, prospective actions under these pillars merit consideration of established baselines and operational rationales.
The development of human capital is central to Saudi Arabia’s innovation strategy. While the Kingdom had around 30,000 professionals engaged in RDI activities as of October 2024, the aim is to increase this number. A critical enabler for the innovation ecosystem will be the establishment of a supportive regulatory environment. One challenge identified in Saudi Arabia is the lengthy procurement process for essential research materials, which can delay projects by up to six months, as well as bottlenecks in expertise – preventing established RDI assets from being leveraged to their full capacity.
The government aims to streamline procurement procedures, including customs processes, to ensure that researchers can access the materials they need in a timely manner, as well as to take decisive action to expand the pool of experts involved in the RDI infrastructure. In this context, the promotion of collaboration between domestic and international entities is important. Together with the continuation of close work with leading foreign institutions in RDI – particularly universities – in key sectors such as artificial intelligence, energy and health care, efforts will be expanded to sustainably populate research infrastructure with local and international talent.
Lastly, the private sector will become the main force driving Saudi Arabia’s innovation agenda. Historically, most funding for innovation in Saudi Arabia has come from the government, with minimal private sector involvement. To address this, the second pillar focuses on attracting private sector funding. Saudi Arabia aims to emulate successful models from countries like the US, where 78% of RDI investment comes from the private sector. This will be achieved through incentives such as tax breaks and matching funds designed to stimulate corporate investment in innovation.
Supportive Ecosystem
The open access policy for research infrastructure, approved by the government in 2023, addresses several challenges in the Kingdom’s research and development landscape. It aims to improve access to government-funded research infrastructure, which has been limited due to the absence of a national policy. Ultimately, it seeks to address issues such as suboptimal use of existing infrastructure, limited accessibility for new research, and insufficient collaboration between industry and RDI players. It lays out national principles for open access to government-funded research infrastructure, recognising that user access is crucial for achieving innovation, scientific excellence and socio-economic impact. With this policy, the Kingdom aims to enhance the return on investment for public spending on research infrastructure and align with best global practices in the field.
Leading local corporations and government-related entities are creating new spaces for RDI. For example, in January 2024 ACWA Power and King Abdulaziz City for Science and Technology (KACST) signed an agreement to establish a joint clean energy and water desalination technologies development centre. Similarly, in August 2024 national energy company Aramco entered into a memorandum of understanding with King Abdullah University of Science and Technology, which included a $100m funding commitment from Aramco over 10 years for RDI projects. Lastly, plans for a new mineral innovation acceleration park in were announced in January 2024. The development will involve collaboration between the Ministry of Industry and Mineral Resources, the National Industrial Development and Logistics Programme, and the Saudi Geological Survey.
City-level authorities in Saudi Arabia are also actively promoting spaces for RDI while creating urban communities for relevant stakeholders. The Royal Commission for Riyadh City (RCRC) has launched a digital district, providing infrastructure for technology companies to innovate. Locate in the Riyadh’s Al Nakheel neighbourhood, this initiative – known as Digital City – is Saudi Arabia’s first mixed-use development, offering commercial, residential and retail spaces. At a more targeted level and in cooperation with Alfaisal University, the RCRC is developing the Riyadh Biotech City adjacent to the university campus. These efforts demonstrate how city-level authorities are creating spaces that not only promote RDI, but also establish urban communities tailored to the needs of innovators, researchers and professionals, supporting Saudi Arabia’s transition from a consumer to a developer of technology.
Such initiatives by large local businesses, government entities and city authorities have contributed to maintaining the momentum generated by Saudi Arabia’s Regional Headquarters Programme (RHQP), introduced in February 2021, in terms of attracting international RDI capabilities. The RHQP aims to position the Kingdom as a major business centre and encourage multinational companies to establish operations within its borders. While the programme’s primary objectives extend beyond RDI, it has proven effective in attracting global RDI giants to relocate to the Kingdom. Notably, major US technology firms, including Google, Amazon and Microsoft, have secured approval to establish their regional headquarters in Riyadh. Previously, other prominent corporations, such as pharmaceuticals firm Pfizer, aerospace giant Airbus and software corporation Oracle, also obtained the necessary permits.
Science & Technology Parks
Bridging the gap between RDI operators, academia, government-related entities, private funders and grassroots entrepreneurship stands as one of the main challenges in fostering RDI. To address this, one of the core components in place is KACST’s network of 11 science and technology parks, which brings together key actors in academia and the public and private sectors.
Within the network, The Garage – launched in September 2023 – stands as a key recent development. The facility is a collaboration between KACST, the Ministry of Communications and Information Technology and the Saudi Federation for Cybersecurity, Programming and Drones. The Garage spans some 28,000 sq metres and accommodates over 300 start-ups. With a business model combining incubators, accelerators and additional resources into one space, The Garage provides the tools companies need to develop. The facility provides start-ups with critical resources, mentorship and access to investors across various sectors, including logistics, food and beverage, e-commerce and 3D printing. As of November 2024 discussions were under way to expand the model internationally.
Future Prospects
Saudi Arabia’s focus on innovation is rapidly transforming its economy, with positive implications for a variety of sectors, including industry and mining. The national RDI strategy is expected to further strengthen the foundation for sustainable progress, with various public and international stakeholders – including foreign companies – already aligned with its rationale. Initiatives such as The Garage demonstrate the Kingdom’s ongoing commitment to nurturing entrepreneurship and fostering advanced research. As Saudi Arabia continues to attract international firms and builds an increasingly business-friendly environment, the Kingdom has the potential to become a significant force in the global RDI landscape.
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