Details of Saudi Arabia’s National Industrial Strategy

In late 2022, the Saudi government revealed details of the country’s latest National Industrial Strategy (NIS). The NIS is Saudi Arabia’s comprehensive roadmap for accelerating the diversification of its industrial base to increase non-oil exports, encourage privatization, attract more foreign investment, increase investment in innovation and research, and create local jobs. The strategy prioritizes 118 segments within 12 main industrial sub-sectors chosen for the country’s ability to compete in these sectors at the regional and global levels.

The NIS seeks to achieve three main strategic objectives:

1. Build a flexible national industrial economy capable of adapting to changes.
2. Form an integrated regional industrial center to meet demand.
3. Achieve global leadership in manufacturing a group of selected industrial commodities.

The NIS identified four “enabling objectives” to achieve the three strategic objectives:

1. Build and strengthen supply chains that are characterized by reliability, high productivity, advanced manufacturing, and the flow of goods and services at a competitive cost.
2. Develop the industrial business ecosystem by improving its legislative and financing environment, increasing contribution of small and medium enterprises (SMEs), and encouraging local content.
3. Enhancing international trade by opening access to new markets for industrial investors and facilitating the export process for local companies.
4. Develop and promote a culture of innovation and knowledge by attracting and retaining talent and fostering a culture of innovation in the industrial sector.

The NIS seeks to achieve the following economic impacts:

1. Industrial sector contribution to GDP: increase from $88.26 billion in 2020 to $377.06 billion by 2035.
2. Industrial sector job opportunities: increase from 900,000 in 2020 to 3.3 million by 2035.
3. Value of industrial exports: increase from $45.06 billion in 2020 to $237.86 billion by 2035.
4. Competitiveness Industrial Performance Index and Economic Complexity Index: be in the top 15 countries by 2035.
5. Localization rate: increase from 41 percent to 64 percent in 2035.

The sectors primarily targeted by the NIS are chemicals/specialty chemicals, plastics and rubber conversion, food/agriculture, renewable energy, aviation (civil and military), automobiles (including electric vehicles), maritime manufacturing, pharmaceuticals, medical devices and supplies, military manufacturing, construction materials, machinery/equipment, and mining/minerals. The NIS will be overseen by several authorities, including the Council of Economic and Development Affairs, the Supreme Committee of Industry (under direct supervision of the Crown Prince), the National Industrial Development and Logistics Program, and the Ministry of Industry and Mineral Resources.

To learn more about the NIS, please contact Ana Carmen Neboisa, Vice President, at anacarmen@ussaudi.org.