Saudi Arabia world’s ‘fastest growing manufacturing hub’

IT-SaudiIT is expected to play a crucial role in the new establishments, and this will be in visible contrast to the country’s large manufacturing companies. (Image source: Ante Vekic/sxc.hu)Saudi Arabia is world’s fastest growing country in the manufacturing sector with an average year-on-year growth of 7.5 per cent until 2018, a recent study has revealed

Martin Kuban, lead research analyst at International Data Corporation (IDC) Manufacturing Insights, Central Europe, the Middle East, and Africa (CEMA) region, said that the Kingdom’s manufacturing sector is poised for significant growth in the sector, particularly in the field of technology, at a global scale.

“The diversification of the country’s oil-based economy is progressing steadily, supported by a positive economic environment and favourable investment attitudes. And IT innovation spirits are rather high, as many of the new businesses are not saddled with extensive client-based solutions,” he added.

According to the latest insights released by IDC, IT spending in Saudi Arabia is growing at the fastest rate across the CEMA region.

Continuous GDP growth, and improved business environment and more foreign direct investment is driving development a number of different manufacturing sub-sectors, according to Kuban.

The third platform — IT solutions and the Internet of Things — are also expected to play a more essential role in the Saudi Arabian manufacturing sector over the coming five to 10 years.

According to the report, the manufacturing sector delivers roughly 10 per cent of Saudi Arabia’s GDP, and it holds significant potential both in terms of its contribution to GDP and the ongoing diversification of industries.

“Manufacturing in technology and engineering-oriented value chains will be driven by emerging small and medium businesses, mostly established in industrial zones surrounding big cities,” it added.

Many of these hubs are expected to emerge as centres of innovation and excellence, closely tied to newly developed research and development facilities and IT is expected to play a crucial role in these new establishments. This would be in visible contrast to the country’s large manufacturing companies.

“While these will also undergo considerable IT transformation, it will typically be at a much slower pace and with less grace due to the lack of IT skills and poor decision-making capabilities of their internal IT organisations,” the analyst noted.

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