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Saudi Arabia’s Ministry of Communications and Information Technology (MCIT) is bolstering the country’s digital economy.
Throughout the COVID-19 pandemic, the government of Saudi Arabia, like any other government around the world, has had to move quickly and substantively with its stimulus packages for businesses to get through this crisis. However, in addition to that, the government of Saudi Arabia has not allowed the crisis to pause or slow down its ongoing and ambitious plans for boosting the Kingdom’s economy. According to Dr. Ahmed H. Altheneyan, Deputy Minister for Digital Capacities for the Ministry of Communications and Information Technology (MCIT) of Saudi Arabia, the Kingdom’s ambitious social transformation projects are aimed at driving diversification across its economy, “with the government today acting as more of an enabler and facilitator through its policies and regulations, as well as funding.”
He explains that the drivers of the Kingdom’s Vision 2030 are 13 nationwide programs, the most critical of which is the National Transformation Program, which has digital transformational at its heart. “Digital transformation is a critical component towards the creation of a vibrant society, a thriving economy, and an ambitious nation, the three key ambitions of Vision 2030,” Dr. Altheneyan says.
Dr. Ahmed H. Altheneyan, Deputy Minister for Digital Capacities, MCIT, Saudi Arabia
In line with that, the MCIT has structured and launched the Universal Service Fund (USF), which is backed by SAR9 billion from the government and matched with SAR6 billion from the Kingdom’s leading telecom operators, to increase the quality and reach of the digital infrastructure beyond major cities to remote and rural areas in Saudi Arabia.
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He adds that, today, the internet reaches 99% of all populated areas in the Kingdom, either through mobile broadband or fiber-based broadband connectivity. “We are the fourth fastest growing 5G rollout in the world, and today, 5G service is live in 35 cities and growing in the Kingdom,” Dr. Altheneyan explains. “We believe that digital infrastructure is both a social equalizer and an economic multiplier. As a social equalizer, during the COVID-19 pandemic and the lockdown, our Sehha App delivered almost one million virtual consultations and enabled the issuance of 1.7 million digital prescriptions. Furthermore, our schools will all be online for six million students through Madrasati, our e-learning platform. It may have started as a remote learning solution, but it will shape the future and create a new generation of our digital first youth.”
In the first round of the program, and with an aim to address the challenge of building digital skills, Dr. Altheneyan explains, the MCIT has launched a multi-phase program to train 40,000 nationals and create 20,000 jobs in the ICT sector by 2021. To date, they have created jobs for more than 4,000 and trained more than 24,000 trainees. Meanwhile, as an economic multiplier, Dr. Altheneyan points out that the Kingdom’s digital economy today contributes to 16% of the non-oil GDP.
As an example, he explains that 41 logistics operators that were licensed during the COVID-19 lockdown delivered 26 million orders worth SAR2 billion, while MCIT research also shows that 95% of Saudis changed their shopping habits to online first, with 69% saying they would continue to shop online well after the easing of the lockdown. Overall, the Kingdom has 16 global players and more than 5,000 local businesses operating in the e-commerce space, a market that is today estimated to be worth about SAR28 billion. “This is above and beyond the actual information technol- ogy market in the Kingdom,” Dr. Altheneyan adds. “Already considered the largest in the Middle East and North Africa region -just towards the end of last year, it grew 10%- today, it is valued at SAR45 billion. We believe that there is still room for growth and we are doubling down on emerging technologies.”
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Indeed, Saudi Arabia has become one of the most attractive global destinations where companies like Deloitte, KPMG, Nokia, and Oracle have established regional centers to serve clients in the region. Dr. Altheneyan highlights that the Saudi Arabia government’s enabling policies and regulations are facilitating this rapid digital driven social transformation and economic diversification. Today, there are 3,500 digitized government services with a maturity rating 83%, and citizens and residents can access more than 3,500 e-government services easily. An important element of all this work is the fact that MCIT appreciates the value that entrepreneurs bring to the global startup economy, and thus, it has teamed up with its partners from public, private, and nonprofit sectors to build an integrated eco-system to support and enable innovation based startups to grow and scale rapidly. “We are living in the era of the Fourth Industrial Revolution, meaning that the rules of the game have changed,” Dr. Altheneyan says. “Entrepreneurs are writing these new rules, using data as the fuel and innovation digital business models to bring their ideas to life. Human capital, people’s ideas and their passion to bring them to life will create a more economically diversified Saudi Arabia.”
Ibrahem N. Alnasser, General Manager of the Digital Innovation Center, MCIT, Saudi Arabia
In line with its ICT Strategy 2023, MCIT is aiming to drive Saudization in the ICT sector to 50%, to raise women’s participation by 50% in the ICT sector, to create 25,000 more quality jobs, to grow the size of the IT market and emerging technologies market by 50%, and to raise the sector’s contribution to GDP by SAR50 billion. “For us, every startup we create is multiplier for quality job creation, new categories of income across the economy, and new opportunities for a more inclusive society,” says Dr. Altheneyan. “We are nurturing a culture of competitive innovation to breed a whole new generation of more competitive and globally-minded Saudi entrepreneurs through annual competitive events, bootcamps, and training programs, and through incubation and acceleration programs such as Tech Champions,” says Ibrahem N. Alnasser, General Manager of the Digital Innovation Center, MCIT. “Therefore, we believe in developing the creative talent in the sector of emerging technologies by running several programs in order to achieve a creative society base. Our bootcamps and hackathons bring innovators and entrepreneurs together to collaborate on the fast generation of minimal viable products (MVPs). These MVPs are then filtered and can then be taken to the incubation and acceleration stages. So far, we have reached more than 70,000 people, enabled 400 digital startups, and contributed to the generation of 500 new MVPs.”
The MCIT’s Digital Innovation Center team targets e-sports, e-learning, and telehealth, and they also hope to see more MVPs built around technologies, such as machine learning, IoT, and blockchain among others. To drive growth in all these areas, Alnasser adds, the center is launching an emerging technologies portfolio backed with SAR1 billion, offering SAR4 million for each startup, as well as a SAR2.5 billion program for upskilling and subsidizing local talent. The COVID-19 pandemic has also accelerated digital transformation and dependence on remote work in the Kingdom, he adds, leading the Digital Innovation Center to run programs that addressed different needs of entrepreneurs at the time, such as the Hope Hackathon, a global online event to accelerate the transformation of innovative ideas into MVPs across three different tracks -digital health, home entertainment and e-gaming- that attracted 15,000 innovators from 110 countries. “For 2021, we will maintain the same momentum with a variety of initiatives aimed at discovering new skilled and talented innovators and entrepreneurs. All of this is driven by Vision 2030 and our unwavering commitment to narrowing the digital divide with human capital drawn from the ranks of our own youth.”
Abdullah A. Alshamrani, Director of Entrepreneurship at the Digital Innovation Center, MCIT, has been on the frontlines of helping Saudi entrepreneurs overcome the impact of the COVID-19 crisis. “Companies across all sectors, all over the world, are hurting,” he says. “Small and medium-sized enterprises, which have smaller workforces and smaller capital bases, have by far seen the worst of this impact. Understanding the gravity of this situation at the Digital Innovation Center, we structured more than 120 digital engagements with business leaders from different sectors to understand their needs and then respond with help. We have addressed more than 20 thousand small and medium-sized enterprises with a variety of measures and support to address the challenges they faced during the pandemic. Our support has extended towards assisting small to medium-sized enterprises in securing essential funding and working with other government agencies to reduce the pressure of regulation in these hard times. We also used our network to connect entrepreneurs with appropriate entities in order to support them to execute their solutions. Currently, we are working with more than 100 startups on a variety of MVPs focused on addressing some of the effects of the pandemic in the fields of transportation, health and education.”
Abdullah A. Alshamrani, Director of Entrepreneurship at the Digital Innovation Center, MCIT
In both good and bad times, Saudi-based entrepreneurs can get the most out of the Tech Champions program, the MCIT’s flagship program that is aimed at strengthening the Kingdom’s position as a leading digital hub through enhancing the economic contribution of technology SMEs. In essence, the Tech Champions program has been developed to provide innovative entrepreneurs with the right tools and support in the technical, business and financial aspects, Alshamrani explains. “What makes the Tech Champions program unique is how it was developed by taking the challenges and use cases from our public sector partners with the revision of investors and industry leaders,” he says. “These challenges are then tackled by our entrepreneurs to build solutions that will be adapted by our program verti- cal owners to contribute to finding digital business solutions to meet the Saudi Vision 2030. In this round of the program, we brought together entrepreneurs with skills and energy in Jeddah, Riyadh, Arar, and the Eastern Province, investors with the needed capital base, and opportunities from the public sector that need to be addressed with products and services that serve the interests of the society and creating more jobs to expand the economy.”
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In practice, Alshamrani explains, that translates to a significant amount of work- more than 13,200 hours of training through 98 mentors and coaches given to 130 entrepreneurs- that has so far helped add 100 new jobs, amassing SAR3 million in revenues from the startups that have reached more than 324,000 customers. The program provides a package of tech- nical services, funding, training, and business support, with the participation and support of more than 43 selected partners from different sectors. It targets entrepreneurs in the five key sectors: e-commerce, telehealth, smart cities, Hajj and Umrah services, and e-sports and entertainment. “As such, I advise entrepreneurs to apply for the next round of Tech Champions to get the appropriate technical and business support, funding, and training,” Alshamrani concludes. “The program will be held virtually and is open to all entrepreneurs in the Kingdom. We will tackle new sectors and the program aims at providing support at both the ideation and startup stages. Participating in this program helps overcome the struggles of an innovation journey and supports market entrance.”
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