Saudi Arabias future rests in hands of R&D

The Saudi research and development (R&D) ecosystem is a fundamental driver of economic diversification and success. It is where new knowledge gets developed, innovation gets created and value-added products and services get commercialized.

One of the Kingdom’s goals, as stated in the Vision 2030 reform plan, is to be among the top 10 countries in the Global Competitiveness Index, up from 39th in 2018. Another objective is to have at least five Saudi universities among the top 200 in international rankings. Achieving this requires that high-quality research is performed at institutions across the Kingdom.

These two core components of the index are directly related to R&D, and Saudi Arabia can improve on these only by increasing its competitiveness. Both ambitions can be realized by supporting efforts in a way that stimulates knowledge production, social development, economic progress and private-sector partnership.

In recognition of the importance of strengthening the R&D ecosystem among various stakeholders, a total budget of SR6 billion ($1.6 billion) has been allocated to the cause through next year in support of R&D at universities.

The Research and Development Office of the Ministry of Education was established in 2017 to transform the R&D ecosystem through strategic initiatives to enhance the research capacity in the Kingdom. Its R&D ecosystem has made significant progress in recent years, and has developed clear strengths.

Numerous entities and programs across the Kingdom include the King Abdulaziz City for Science and Technology in Riyadh, academic institutions that offer endowment funds, large national corporations that engage in partnerships with universities and research centers (such as Aramco, Sabic and Taqnia), and other independent R&D facilities that serve specific industries.

The Saudi government has been increasing its funds for the sector. In previous years, only 0.1 percent of the Kingdom’s gross domestic product (GDP) was devoted to research; now it has reached 0.7 percent. However, Saudi Arabia still lags the US, Europe and Singapore, which spend on average 2.2 percent of GDP on R&D, suggesting there is still considerable room for improvement.

The R&D ecosystem needs to become more integrated to help ensure more synergistic collaborations and more efficient transfers of knowledge in the Kingdom.

This sector also needs a better understanding of the requirements and priorities of private industry, so it can introduce meaningful incentives that can push demand for R&D to be performed locally.

There is the need to build talents, particularly in science, engineering, information technology, biotechnology and health science. In the same vein, there should be investment in basic infrastructure, a vital component for quality R&D to thrive.

Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.