Transformation from an Oil-based Economy to a Knowledge-based Economy in Saudi Arabia: the Direction of Saudi Vision 2030

Abstract

The central aim of this article is to explore issues related to the transformation of an oil-reliant economy to a knowledge economy in Saudi Arabia, a country which witnessed a remarkable revolution following the discovery of oil more than three quarters of a century ago (March 1938). The study provides insights into what the country’s knowledge economy looks like today and the potential policy issues related to how the economy might evolve into the future. Saudi Arabia, a member of G20, is the world’s largest oil exporter and derives about 90% of the government revenue from oil. Based on the documentary analysis (World Bank, United Nations, World Economic Forum, Ministries in Saudi Arabia and newspapers), the findings of this study suggest that there are six key aspects which need to be considered in developing Saudi Arabia’s knowledge economy: human capital, innovation, information and communications technology (ICT), the economy, education and employment. In particular, several challenges are identified relating to human capital, research and unemployment amongst university-educated females. The Saudi government’s Vision (Arabic: 2030 and the related National Transformation Program 2020 both stress the importance of diversifying the economy through development of the knowledge economy. The findings of this study will assist policymakers as they work to create sustainable knowledge economy framework for Saudi Arabia. Further research is required to compare the pillars of the knowledge economy in the Middle East.