Saudi Vision 2030: Progress Made and Opportunities Ahead in Tourism, IT and Construction
Saudi Arabia has made significant strides towards its economic diversification under Saudi Vision 2030. Sectors such as IT, Tourism and Construction are at the forefront of attracting investments into the Kingdom. Read more to find out how.
Since its launch in 2016, Saudi Arabia’s Vision 2030 has been catalyzing business expansion across different industries as the Kingdom focuses on bolstering a strong, diverse economy; one that does not only rely on a single source.
Amid the country's thriving business landscape, sectors like IT, construction, and tourism are witnessing a rapid pace of transformation, creating a surge of opportunities for international companies to expand their operations and capitalize on the market's bullish momentum.
87% of Planned Initiatives under Saudi Vision 2030 Either Met or on Track
Sectors like construction, IT, and tourism have been the cornerstones of the country’s Vision 2030, playing an important role in accelerating its grand objective to enforce the growth of its non-oil economy. In fact, the progress has already been felt across the country's economic landscape, with 87% of the planned initiatives under Vision 2030 either completed or on track. Of these, 360 are completed and 561 are on their way to completion.
For the first time in 2023, non-oil activities contributed 50% of the real GDP, while the private sector's contribution has increased from 40% to 45% since the launch of Vision 2030.
Moreover, as the Kingdom continues to become an attractive destination for foreign investments, license registrations of foreign entities have jumped to 8,600 in 2023, marking a 96% growth from the previous year. The total number of foreign investment licenses issued so far is 23,800.
This relentless drive to innovate, transform, and expand the economy has positioned Saudi Arabia as a key haven for businesses across the globe. With the Kingdom well on its way to achieving the targets outlined in Vision 2030, the opportunity remains visible for companies to jump in and capitalize on the market’s bullish momentum.
IT: Embracing Digital Transformation and Driving Innovation Across Sectors
The IT sector in Saudi Arabia is experiencing rapid expansion, fueled by Vision 2030’s emphasis on digital transformation. Investments have been mostly concentrated in digital infrastructure, cybersecurity, and tech companies.
The government has increased the allocation of resources to develop the country’s digital capabilities, making it an attractive destination for IT companies worldwide. As a result, the Kingdom’s digital excellence ranks third globally and first regionally in the World Bank’s GovTech Maturity Index (GTMI).
The initiatives that stand out in this sector include the establishment of smart cities, like NEOM, and the adoption of advanced technologies in government services and business operations.
IT Sector Highlights:
- In 2023, the telecom and IT sectors contributed 4% to the country’s GDP.
- The IT market grew by 8% to reach $23.33 billion, while the telecommunications market saw a 4% increase to $20.24 billion.
- There are 18 tech companies listed on the Saudi stock market with a combined market value of approximately $28.8 billion, and the total sector value in 2023 reached approximately $43.47 billion, marking a 6% increase from the previous year.
- The country currently ranks 12th globally in venture capital availability.
Tourism Sector Remains at the forefront of Kingdom's Non-oil Economy
The Saudi government has numerously revealed plans to attract 150 million visitors annually by 2030. Behind these ambitious goals are estimations of the tourism sector generating 1.6 million jobs and contributing 10% of Saudi Arabia’s GDP.
The Kingdom is investing heavily in developing world-class tourist destinations such as the Red Sea Project, Al-Ula, and Qiddiya. These projects offer vast opportunities for businesses in hospitality, entertainment, and related services. In addition, the government's efforts to ease visa regulations and promote the country’s rich cultural and historical heritage have already started to bear fruit, resulting in a notable increase in international tourist arrivals.
Tourism Sector Highlights:
- Tourist spending spiked to its highest-ever value at $40 billion (SR 135 billion) in 2023.
- The Tourism Development Fund (TDF), with a capital of approximately $4 billion, has been established to boost and sustain tourist destinations within the Kingdom.
- Riyadh Season, a main tourism event, has attracted over 72 million visitors in 2023 and over 273 million visitors since its conception in 2019.
- Saudi Arabia has welcomed over 600 million visitors ever since the launch of the Vision 2030 in 2016.
Construction Sector: Giga projects are spearheading the Kingdom’s Building Boom
The construction sector is the Kingdom’s primary focus, thanks to the massive undertaking that encapsulates Saudi Arabia’s giga projects. From the futuristic city of NEOM to large-scale infrastructure projects like the King Salman Energy Park, there is a high demand for construction services and materials.
The government's push for sustainable and smart building practices has become a growth enabler for companies specializing in green construction and innovative building technologies.
Construction Sector Highlights:
- The Qiddiya project alone is expected to create more than 300,000 jobs and attract 48 million visitors annually, contributing $36 billion per year to the Saudi economy by 2030.
- The Kingdom has launched multiple industrial cities to foster industrial growth and diversification. These include Sudair City for industry and businesses and King Abdullah Economic City.
- Assets under the PIF have increased from $557 billion in 2016 to $749 billion in 2023, significantly driving construction and development projects across the Kingdom.
