Saudi Arabia tech talent unlikely to meet industry needs by 2030

Al-Monitor Pro Members

Tamara Juburi

Researcher and analyst focusing on the Middle East 

March 20, 2023

Saudi Arabia signed investment programs amounting to more than $2 billion in support of tech start-ups during its annual tech conference LEAP, which was held in February. In a push to future-proof its industries, consolidate its position on the international stage, and prepare the next generation of its workforce for the digital age, Saudi Arabia is investing heavily in digital transformation. Under the framework of Vision 2030, the government has announced plans for technology spending to rise to more than 20% of total national spending by 2025, which would make Saudi Arabia the highest tech spender worldwide. Saudi Arabia's ability to mature its tech industry while still meeting subsequent demand for talent hinges on two things: attracting foreign workers to meet labor demands in the short- to mid-term, and ensuring that it can upskill and specialize its local workforce to sustain this talent pipeline in the long term. Whether or not the latter objective can be met will depend heavily on how high-volume government investments translate into meaningful change and whether Saudi Arabia will be able to effectively differentiate itself from its GCC neighbors, who share the ambition to become leading innovation players.

Scenario 1: Saudi Arabia will meet its targets and have the means to support and uphold its tech boom.

Significant progress has been made in developing Saudi Arabia’s tech industry thus far. Big tech players including Google, Alibaba and Oracle have announced investment in the country to create innovation hubs. Last year, Minister of Communication and Information Technology Abdulla Alswaha told Reuters that the kingdom’s tech and digital market was valued at $40 billion, making it the largest in the region.

To support its continued growth, other ecosystem development tools have been introduced, such as the creation of co-working spaces and entrepreneurial support programs. One notable initiative is The Garage, a startup district offering a physical space and training services including incubators and accelerators alongside grant investments. Developing the skills of Saudi youth is another fundamental component, given that current estimates show that two-thirds of the nation’s population is under 35. These advancements, coupled with the growing inclusion of women in the workforce, have propelled Saudi Arabia’s ability to innovate in the short term.

Scenario 2: Competition in the region will see the UAE attracting more international tech talent than Saudi Arabia.

Other GCC countries, including the UAE, share the goal of becoming the regional lead on tech innovation over the next few decades. The UAE’s Digital Economy Strategy aims to raise the contribution of the digital economy from 9.7% of total GDP in 2022 to 19.4% in 2032. Leading sub-sectors include cloud computing, where $1 billion is expected to be invested between now and 2026.

The UAE has a significant competitive advantage over Saudi Arabia: It has a larger pool of foreign workers, which account for more than 90% of the workforce in the private sector. Based on this, it is in a better position to continue attracting foreign talent to fill more specialized roles in technology. This, in part, is supported by the nation’s well-established tourism industry, which absorbs most visitors to the GCC and has allowed the UAE to brand itself as a modern and moderate hub in the MENA region. Whereas the UAE can use its reputation as a tourist hub to leverage tech development and market itself as the most attractive option for foreigners seeking work, Saudi Arabia is developing its tourism industry in tandem with its innovation efforts. The significant number of foreigners residing in the UAE, as well as others who may be considering the move, can go some way in securing its tech talent pipeline in the coming decades. In order to compete, Saudi Arabia will have to convince foreign publics that it has more to offer than the UAE and other smaller Gulf states. 

Tamara Juburi is a researcher and analyst focusing on the Middle East. Her particular areas of interest include entrepreneurship in the GCC, the evolving nature of the relationship between the EU and the region, and how global diplomacy translates into local business and trade opportunities.