Saudi Arabia has been witnessing rapid growth and development in its Information and Communication Technology (ICT) sector, driven by the government's vision to diversify its economy and reduce its dependency on oil revenue.

This article provides an in-depth analysis of the Saudi Arabian ICT market, including its size, growth, trends, major players, business opportunities, and leading sub-sectors.

Saudi Arabia ICT Market Size and Growth

The ICT (Information and Communication Technology) market in Saudi Arabia is a rapidly growing industry that plays a crucial role in the country's economic development.

The market is driven by the government's initiatives to promote digital transformation and the increasing adoption of technology by businesses and individuals.

The Saudi Arabia ICT market is estimated to be worth USD 50.60 billion in 2024. It's expected to grow to USD 76.05 billion by 2029, with a yearly growth rate of 8.49%.

• Fast internet, wireless connections, and cloud computing are changing how businesses operate. Industries like banking, healthcare, retail, and education are adapting to smart gadgets and the Internet.

• The manufacturing sector is also embracing digital technology, known as Industry 4.0, which includes automation and improvements through technologies like robotics.

• The Saudi Arabian government aims for 97.6% of its population to be online by 2026. They are investing in broadband networks where mobile internet speed has significantly improved to 105.42 Mbps, making Saudi Arabia a global leader in internet speed.

• A few years ago Saudi Arabia introduced a new law covering telecommunications and information technology sectors. This law focuses on digital infrastructure, new technologies, e-government, and enabling apps and services.

• Businesses require skills related to cloud computing, statistical analysis, data mining, and integration software for their digital transitions. Companies are hiring experts with a combination of digital, organizational, and management skills.

• The increasing use of cloud services and IoT devices brings new security challenges. There's a risk of data theft due to the reliance on external sources to fulfil skill deficits. Expertise in digital and ICT security technologies is crucial to tackle these vulnerabilities.

Trends Shaping the ICT Market in Saudi Arabia

The ICT sector in Saudi Arabia is undergoing notable expansion and change. Let’s look at the key trends shaping the landscape of ICT:

1. Energy and Utilities to Witness Major Growth:

• Oil and Gas Industry Transformation: Saudi Arabia's oil and gas sector is embracing ICT to enhance efficiency, operations, and sustainability. The government plans to increase oil production, which will create job opportunities and drive GDP growth.

• Cloud Technology Expansion: Cloud technology is growing in the energy and utilities sector, offering significant opportunities for firms like Amazon Web Services (AWS).

• Partnerships for Green Energy: Collaborations between companies like ACWA Power and Huawei aim to boost green energy solutions, reduce carbon emissions, and improve energy efficiency in projects like solar plants and 5G networks.

• Focus on Sustainability: The digitalization of energy and utility industries aims for increased efficiency, safety, and sustainability. The adoption of advanced digital technologies is expected to reduce operational costs and meet sustainability goals.

2. Significant Growth in the Western Region:

• Digital Transformation: Saudi Arabia's ICT sector is rapidly evolving, with investments in 5G, smart cities, startups, and advanced technologies like cloud computing, AI, cybersecurity, and IoT.

• Economic Centers: The western segment, including cities like Mecca, Medina, and Jeddah, is economically active and populated, making it a key area for ICT development.

• Infrastructure Development: Significant investments are made in ICT infrastructure such as data centers and fiber optic networks to improve connectivity and support entrepreneurship.

• Government Initiatives: The Saudi government's Vision 2030 strategy includes programs like the National Digital Transformation Program (NDTP) to boost digital services and innovation ecosystems in cities like Mecca and Jeddah.

• Digital Competitiveness: Saudi Arabia scores high in digital competitiveness rankings, with cities contributing to market growth through smart city development and IoT technology expansion aligned with Vision 2030 goals.

Major Players in the Saudi Arabian ICT Market

South Arabia is well-positioned to become a hub for technology services and cloud computing, with access to international connectivity and serving markets in Europe, Asia, and Africa. Some of the key players in the Saudi Arabia ICT Sector:

1. Ministry of Communications and Information Technology (MCIT):

The MCIT develops policies governing the communication and information technology sector.

2. Communications, Space, and Technology Commission (CST):

Operating under the MCIT, CST regulates the ICT and space sectors in Saudi Arabia.

3. Saudi Data and AI Authority (SDAIA):

Also under the MCIT, SDAIA oversees the national data and AI agenda, including entities like the NCAI (National Centre for Artificial Intelligence).

4. National Cybersecurity Authority (NCA):

Directly reporting to the Royal Court, the NCA has regulatory and operational roles in enhnacing country's cybersecurity, protecting vital interests, national security, critical infrastructure, high-priority sectors, and government services in line with Vision 2030.

Business Opportunities Driving ICT Growth in Saudi Arabia

The MCIT aims to advance digital transformation in areas like e-commerce, smart cities, national data management, digital education, healthcare, and e-government.

Let's take a look at some of the business opportunities that are driving ICT growth in Saudi Arabia:

• Establish a strong digital architecture supporting Vision 2030's digital transformation objectives.

• Focus on e-commerce, digital education, digital health, smart cities, national data, and e-government.

• Aim to create over 25,000 jobs, increase the IT market and emerging technologies by 50%, and boost the sector's GDP contribution by $13.3 billion.

• Encourage foreign investments and support women's participation in the sector.

• Spending on Cybersecurity, cloud computing, artificial intelligence (AI), and the Internet of Things (IoT) is expected to grow at a CAGR of 11.4% and 8.7%, respectively, from 2022 to 2026.

• Focus on giga-projects, smart cities, and e-governance, with significant foreign investment, including $9 billion announced during the recent LEAP conference.

Leading Sub-Sectors in the Saudi Arabian ICT Market

In Saudi Arabia's rapidly evolving Information and Communication Technology landscape, several key sub-sectors are emerging as significant drivers of growth and innovation.

From cybersecurity to e-commerce, these sectors play crucial roles in shaping the Kingdom's technological future.

Let's explore some of the leading sub-sectors and their impact on Saudi Arabia's digital economy.

1. Cybersecurity:

• Saudi Arabia ranks second globally in cybersecurity.

• The cybersecurity market was worth $3.6 billion in 2020 and is expected to reach $9.8 billion by 2026.

• Common cyber threats target government, education, finance, energy, and healthcare sectors.

2. Internet of Things (IoT) & Smart Cities:

• Saudi Arabia aims to be the world’s most connected nation by 2030.

• The IoT market is expected to reach $2.9 billion by 2025, focusing on industrialized IoT, AI, and cloud computing.

• Existing cities are being equipped with smart infrastructure, offering opportunities for industrial IoT solutions.

3. Cloud Computing:

• The projected annual expenditure on public cloud services is expected to hit $2.5 billion by 2026.

• A Cloud Computing Special Economic Zone has been launched, encouraging cloud service providers to establish data centres in the Kingdom.

• The government prioritizes cloud-based solutions, aiming to become the main data centre hub for the region.

4. Artificial Intelligence (AI):

• Saudi Arabia leads globally in government strategy for AI.

• By 2030, AI is expected to contribute $135 billion to the Saudi economy.

• Opportunities exist for AI companies in sectors like manufacturing oil and gas, focusing on solutions tailored to the local market.

5. E-Commerce:

• The e-commerce market in Saudi Arabia holds a value of $5.15 billion, constituting 6% of the total retail market.

• Over 50% of the population shops online.

• Electronic payments in retail business exceeded 57% in 2021, surpassing targets set by Vision 2030.

Conclusion

Saudi Arabia's Information and Communication Technology (ICT) sector is undergoing remarkable growth and development, propelled by the government's commitment to diversify the economy and reduce dependency on oil revenue.

With a comprehensive vision outlined in Vision 2030, the Kingdom is striving to position itself as a global leader in digital innovation and technology.

The ICT market in Saudi Arabia is expanding rapidly, with significant investments in infrastructure, digital transformation initiatives, and emerging technologies.

From cybersecurity to cloud computing, artificial intelligence to e-commerce, various sectors are driving this transformation, presenting abundant opportunities for growth and innovation.

Saudi Arabia's strategic emphasis on digital transformation, foreign investment attraction, and inclusivity sets the stage for leveraging evolving ICT opportunities, driving toward a prosperous, digitally empowered future.