Abstract
This study shows the key sector for the economy of Saudi Arabia based on input-output model analyses. They derived the analyses from the economy of the Kingdom of Saudi Arabia (KSA) using 35 economic sectors. We found that four leading sectors exceeded the values of the linkage coefficients with a value of 1, represented by both chemicals and pharmaceutical products, namely, manufacturing basic metals (S13), transportation and storage (S24), and other business sector services (S31). According to the unbalanced growth theory, more attention is paid to these sectors that are the primary engine for the rest of the sectors and their growth. The results obtained are beneficial for success of the economic policy of Saudi Arabia. By observing the different influences, it is possible to identify the policies expected to have more significant indirect impacts on other sectors in Saudi Arabia and are likely to develop a prudent economic policy. Given the economic dependence on oil, it is also essential to be acquainted with the different sectors that are probable to have an overall effect on the economy for strategic and operationally effective analysis that can help.
Highlights
This study aims to identify the key economic sectors of Saudi Arabia
Manufacture of basic metals, transportation and storage, and other business sector services are critical to overall production in the economy of Saudi Arabia
Manufacture of basic metals is an important sector of work income; in contrast, chemicals and pharmaceutical products, transportation and storage, and other business sector services are dominant employment sectors
Summary
This study aims to identify the key economic sectors of Saudi Arabia. A key sector analysis explores interdependent economic activities in the targeted sector. An estimate of interdependence is rendered using backward or forward relations. Backward linkages focus on dependencies and interdependence between different economic activities, while forward links refer to links within diverse economic sectors, e.g., Beyers [1], Hewings [2], McGilvray [3], and Rao and Harmston [4]. The general problem of recognition of key sector is its utility in the implementation of economic growth policy. According to Hirschman [5], McGilvray [3], and Veselovsky et al [6], investing in sectors with a large degree of backward and forward linkages promotes economic growth opportunities
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