Saudi Arabia unveils tech-heavy economic vision
Saudi projects ranging from a mega business zone involving territory in three countries to a billion-dollar investment in private space flight have been announced.
The Future Investment Initiative (FII), a high-profile drive inaugurated by Saudi Crown Prince Mohammed bin Salman bin Abdulaziz, involved the government pitching its vision to more than 2,500 participants from around the world.
By looking to invest in technology and diversifying its economy, Saudi Arabia appears to be modelling itself as a Silicon Valley of the region.
The FII included panels with international business leaders and analysts discussing the economic concepts and challenges facing Saudi Arabia and served as a platform for Riyadh to make big announcements, primarily its $500 billion project for a mega-city and business zone called NEOM.
The kingdom’s Public Investment Fund (PIF) said NEOM would “seek to maximise the natural advantages the area has for wind and solar energy and is being supported by SoftBank’s Vision Fund, led by former Alcoa and Siemens CEO Klaus Kleinfeld.”
The project will include partnerships with leading technology firms, with public backing secured from robotics experts Boston Dynamics.
“There will be many opportunities but we will work only with the dreamers, people who want to create something new in the world,” Crown Prince Mohammed said.
The project will result in a 26,500 sq.km high-tech hub extending into Jordan and Egypt and would focus on the future of energy and water, transport, biotechnologies, technical and digital sciences, as well as media production and entertainment.
Riyadh aims to create job opportunities, expand the kingdom’s GDP and attract investment from the private and public sectors, which will be supported by more than $500 billion from the PIF and local and international investors.
Softbank Chairman and CEO Masayoshi Son called it an opportunity to create “the largest and most advanced generation of robots in the world.”
Kleinfeld promised that NEOM would be a “beautiful and natural place” for the best and the brightest to make their mark for generations.
Crown Prince Mohammed also said in an interview with Reuters that NEOM would be listed on financial markets along with the kingdom’s oil giant Saudi Aramco to diversify the economy away from the energy sector.
He reiterated that Aramco’s initial public offering (IPO) was on track for 2018 and would be valued at more than $2 trillion. NEOM’s IPO would likely be further down the line, he said.
“It might be after 2030; it might be before but the idea and the strategy are to float it eventually,” he added.
The PIF said it was investing $1 billion in Richard Branson’s space tourism company Virgin Galactic. The announcement came about a month after Branson said he would invest in the kingdom’s Red Sea luxury tourism project.
“This investment will enable us to develop the next generation of satellite launches and accelerate our programme for point to point supersonic space travel,” Branson said.
Branson said Virgin Galactic was “months away” from launching vehicles into space with people on board.
The PIF released its first comprehensive business plan during the conference, which hopes to increase its assets under management to $400 billion by 2020 from approximately $230 billion now.
Mohammed Alkhereiji is the Arab Weekly’s Gulf section editor.
This article was originally published in The Arab Weekly.