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Saudi Arabia unveiled Vision 2030 in 2016, a 15-year strategy and roadmap to wean itself off oil reliance and diversify its economy. It's an ambitious plan to modernize the kingdom to serve the younger generation and create millions of jobs needed to support the surge in Saudi men and women graduating from universities at home and abroad with government scholarships.
The Kingdom opened its borders to international tourists for the first time in history in 2019 and hopes that tourism will account for 10 percent of its gross domestic product (GDP) by 2030. The Kingdom is also developing its untapped entertainment sector to make the country a more attractive place to live and work. Entrepreneurship and small and medium-sized enterprises are expected to play a major role in contributing to the country's non-oil GDP agenda.
Vision 2030 is based on three pillars to transform the Kingdom economically and socially: an ambitious nation, a thriving economy and a vibrant society. The main focus of Vision 2030 is to grow and diversify the Kingdom's economy away from reliance on oil revenues, create jobs, strengthen the private sector, attract Foreign Direct Investment (FDI) and support innovation.
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But if you boil Vision 2030 down to its very essence, it was created primarily to support the next generation of Saudis. It is a vision to reform the Kingdom not just economically but socially and structurally, guiding and supporting the next generation of Saudis who will increasingly shape the Kingdom's economy and social fabric. The architect of Vision 2030 is Saudi Arabia's Crown Prince, His Highness Mohammed bin Salman bin Abdulaziz Al Saud, himself under the age of 40, who makes up two-thirds of the Kingdom's 35 million inhabitants.
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One of the main drivers of Vision 2030 is addressing the country's unemployment rate, which has traditionally hovered around 12 percent, and it aims to bring it down to 7 percent by 2030. This goal is a pretty big feat in itself, given the reality of Saudi Arabia's “youth bulge,” which means that the number of young people graduating and entering the workforce is two to three times higher than those leaving the workforce.
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Additionally, Saudi Arabia has seen a shift in its social ecosystem, with an influx of women into the workforce, which has been supported by the government. One of the first Vision 2030 goals achieved was a target of 30% female labor force participation (from 16% in 2015), and by the end of 2021, female labor force participation had reached 33.6%. This is just one example of the rapidly changing market environment in everyday life in Saudi Arabia. But ultimately, this means that the Kingdom must create many jobs that currently do not exist to cater to young, ambitious Saudis (both men and women) who want meaningful and exciting careers.
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Ultimately, the Kingdom aims to create millions of new jobs. To do so, it is betting on entrepreneurship and small businesses. Moving away from its dependence on oil, the Kingdom is investing hundreds of billions of dollars in the tourism economy, the digital economy, and the sports and entertainment economy. These are just some of the new greenfield industries being created for the first time in Saudi Arabia. The Kingdom aims to emulate what many other economies have done: to have small businesses and startups generate a significant portion of the country's jobs and economic activity. For example, in the United States, 44% of the country's economic activity is generated by small businesses, and U.S. small businesses have created 62% of all new U.S. jobs over the past 15 years.
That's why Saudi Arabia is investing heavily in its startup ecosystem, working to change mindsets and bring an entrepreneurial culture to every business. Saudi Arabia has supported entrepreneurship and encouraged investment in local startups as part of its Vision 2030 goals to increase the number of SMEs and their ability to scale, FDI, and most importantly, the private sector's contribution to the country's GDP. The past five years have seen robust activity, driven by various actors in the Saudi ecosystem, and as of the end of Q3 2022, more than 978,000 small and medium-sized enterprises (SMEs) were operating in the Kingdom.
Click here for detailsSaudi Arabia Check out the Startup Ecosystem Report The evolution of the Saudi Arabian startup ecosystem 2010-2022.
This article was originally published on Clear Insightis a partner of Entrepreneur Middle East in producing a special report on the tech and entrepreneurial ecosystem in the Middle East and Africa.
