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Saudi Arabia’s burgeoning tech startup ecosystem can lead the country’s non-oil revolution and become a regional powerhouse, given the Kingdom’s abundant resources and inherent market dynamics, Wamda said in report collaboration with OC&C Strategy Consultants.
With its dynamic and young population structure, the Kingdom has the potential to build and grow a competitive knowledge economy, the report said.
Despite having the largest market in the GCC in terms of population and consumer-spend, Saudi’s tech startup ecosystem is small and nascent compared to other countries in the region.
Walid Faza, Partner at Wamda, noted that while the appetite for entrepreneurship is growing and the number of startups launched in KSA is on the rise, there are not enough support organizations such as accelerators, mentorship programs, and co-working spaces to cater to their demands.
SMEs make up a small proportion of the economic activity in the Kingdom, contributing about 20 percent to the GDP.
"As the region’s largest economy, we see great potential in Saudi Arabia - it is an attractive market for startups and corporations alike,” said Fares Ghandour, Partner at Wamda.
As a country that is still heavily reliant on the oil sector, Saudi Arabia must continuously be looking into how to maximize its entrepreneurial potential and harness it as a new source of economic growth and employment, Ghandour added.
“Government support has increased, regulatory roadblocks are being stripped away, but much more can still be done to make it easier for the ecosystem to reach its full potential. Events like Mix N’ Mentor aim to bring together important players in the ecosystem to network, collaborate and help foster collaborative entrepreneurship,” he noted.
According to the report, the fundamental challenge in Saudi Arabia is to transfer talent to private-sector employment and to tech entrepreneurship.
Meanwhile, the majority of startups that have emerged in Saudi Arabia are Software as a Service (SaaS) or e-commerce oriented, while startups for the King Abdullah University of Science and Technology offer more deep-technology solutions, the report added.
While there have been no significant exits valued at more than $100 million, there has been progress and dynamism in the sector.
“There is a very strong political commitment to developing a solid science, technology and innovation base in Saudi Arabia and as a result, support for the tech ecosystem has grown,” the report said.
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