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8/3/2019 4. Vision 20202 for KSA
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
2020 Vision for the
Kingdom of Saudi Arabia
Presentation By
ENGR. AHMED M. AL SADHAN
Director, National Office for Industrial Strategies & Policies
MINISTRY OF COMMERCE AND INDUSTRY
First Steering Committee Meeting Riyadh, 7 December, 2005
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
We have a consensus on the way to the Future
Diversify the Economythrough industry
Rapidly build human resources
Expand public services
Encourage expansion of private sector
Streamline public sector/governance structures
We cannot continue to live off oil-revenues forever!
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
Why? It is a response to the global challenges and the
dire need of sustainable welfare to our people
i. Fierce Global Competition Malaysia: prime location for ICT manufacturing
India: leader in knowledge-intensive technologies
China: the giant workshop of the world
Brazil: agricultural and industrial super-power
Finland: location for high-tech clusters
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
ii. Low Relative Domestic Performance
UNIDO diagnosis shows that performance is poor
MVA share in GDP is around 9% (very low)
- In Malaysia and China it is around 35% ; even Egypt is 20%
Manufactured exports/total exports has declined
- From 24% to 20% (1990 to 2000)
We have not improved beyond 1980
- We have actually moved backward from 1990-2000
We have far to go; rising oil revenues have hidden the reality of industrial
stagnation
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Can Saudi Arabia be a dynamic economy?
We have excellent resources
We have windfall revenue from oil & gas
Very high quality infrastructure
Strong in some industries: petrochemicals, plastics,
glass, electrical equipment, chemical products
Already linked to global production networks
High income society, large domestic market
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Also WTO entry is not a constraint
KSA already faces competition in home market
-Protection levels are low ~ 5% for most
product lines
Many industrial exports are growing
WTO entry will provide further stimulus for
growth through competition
WTO entry will create a stable regulatory
climate that could attract much more FDI
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What capabilities need to be built? Technological strengthin education and industry
The key to success in India, Finland and elsewhere
An innovative-entrepreneurial business culture
Globally competitive industrial clusters
Strength in petrochemicals is fine, but not enough
High-levels of human capital in Saudi workforce
High-tech physical capital isnot a substitute for humancapital
Modernize public sector governance structures
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
What benefit do we gain from the above?
We raise the technological capability of Saudi society
We raise quality of education and training
We raise the technological competence level
We build high-level skills in workforce
We raise organizational & operational efficiency
We intensify the innovation level in industry
In short: We transform ourselves into an advanced,
knowledge-deploying industrial society
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
How do we move to knowledge-based technologies?
Build educational and training systems to support
industrys move to higher-technology production
By encouraging firms to produce high-tech goods
By raising the technological level of manufacturing industry
Technologies that yield higher value-added/worker
Re-organize public governance
Provide other public support for industrial renewal
R&D, standards, quality control, consulting services
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
Our strategy for building human capital
Build competitiveness in manufacturing industry
Raise productivity, technological level and quality
Thereby expand exports and domestic market share
Focus on cluster development in selected areas
Clusters are the natural units of industrial dynamism
Promote technology-based SME clusters
Grow a national innovation system to support cluster development
and SME expansion
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
National Innovation System & Global Linkages /
Industrial Policy Ingredients
Link-up with global value chains, through FDI
Strengthen university-industry linkages
Through the national innovation system
Encourage application-oriented research through anincentive system
Build international university linkages
Streamline public sector & regulatory structures`
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National Industrial Strategy for EnhancingCompetitiveness and Diversification
Thank You!Together For Successful Industrial
Strategy Implementation
Ministry of Commerce and Industry
First Steering Committee Meeting Riyadh, 7 December, 2005