Saudi Arabia at 94: How the kingdom rewrote the rules of innovation

Islam Zween, Argaam CEO

For Saudi Arabia, it has never been about the “innovator’s dilemma”, the famous book of the inventor of the term “innovative disruption”, the esteemed Harvard Business School professor Clayton Christensen.

The “innovator’s dilemma” is the difficult choice between holding onto an existing market by doing the same thing, or capturing new markets by embracing new technologies and adopting new business models. That what exactly happened in Saudi since Crown Prince Mohammed Bin Salman unveiled his vision back in 2016.

As the kingdom celebrates its 94th birthday nowadays, the concept is the bedrock of many of the sectors that help diversify the kingdom’s economy. Actually, a simple google search for the two words – disruptive innovation – will give us millions of entries, which indicates how widely it’s researched and written about since mid 1990s when Mr Christensen coined the term.

This policy has helped turn the kingdom into a major tourist hub in the region, harnessed new markets overseas especially in Africa for Saudi exports, attracted efficiency-seeking investors from all over the world, adopted low-carbon technologies and strategies in its oil industry, as well as it is developing a large manufacturing base under the slogan of ‘Made in Saudi.’

The share of the non-oil sector has risen gradually in total Saudi GDP since 2016 when the kingdom unveiled Vision 2030 with the strategic aim of decreasing the reliance on oil and diversifying the economic resources.

Another way the kingdom is rewriting the rules is by embracing open innovation is how it has turned the investment in the sports industry into a significant investment force. The Public Investment Fund (PIF) is a key player. It has made strategic investments in several global sports fields chiefly football teams, golf and F1, let alone creating 135km connecting East and West of the capital Riyadh with green spaces, sports centres and cyclist routes.

All of this is being done with an elegant touch displaying the kingdom’s heritage in world exhibitions that draw attention to the landmark cultural projects that opened in Saudi Arabia in recent years; chiefly the mega cultural project in Diriyah. The town is home to the At-Turaif UNESCO World Heritage Site, a beautifully preserved mud-brick city that was the birthplace of the Kingdom of Saudi Arabia, and the original home of House Al Saud.

Harnessing the state-of-the-art technological innovations in digging, the kingdom has also joined the market of rare earth minerals exploration, chiefly nickel, coper, iron and litium. It has established state-run programmes and strategies for the natural treasures.

These strategies are mainly aimed at not only exporting them and boosting their national income, but also stockpiling them to have big reserves as it’s the case with crude oil.

Military-focused investment in Research & Development to patent innovations in the national defence industry helps reshape a country’s economic growth and civilian sectors including medicine. And Saudi Arabia will potentially take part in the development of the UK’s flagship jet, Tempest, the sixth-generation stealth aircraft, equipped with advanced technology with the ability to fly at supersonic speed.

Another hard evidence of the kingdom’s open innovation is the renewable energy sector. Last year, Saudi Arabia announced it was building the world’s largest single-site solar-power plant in Al Shuaibah, Makkah Al Mukrammah.

Disruptive innovation in the kingdom is indeed a collaboration between different sectors, ministries, firms and even university labs with every party producing one part of the ‘final product’: a young Saudi Arabia at 94.

Islam Zween, Argaam CEO.