My last trip to Saudi Arabia surprised me with a billboard reading “Riyadh Comedy Festival” that listed many well-known American stand-up comedians. No doubt, the country was opening up and transforming mentally, physically, and digitally.
In 2016, the Vision 2030 strategy was announced, with the ambitious goal of reaching the top five in the UN EGDI Online Service Index by 2030. By 2024, Saudi Arabia was already ranked 4th on the Online Service Index. Some might think it was luck. To analyze this, we examined 10 digital indices related to innovation, digitalization, and AI from international organizations and top universities. Between 2022 and 2025, Saudi Arabia, on average of these 10 indices, moved up 12 positions – from 42nd to 30th. If the current pace of digital transformation continues, Saudi Arabia is likely to meet all its Vision 2030 digital targets ahead of schedule.
- What drives this growth?
Leaders’ vision, government oversight, and substantial investments – such as a tenfold increase in AI funding over a few years to $15 billion – along with access to best practices and top US technologies like chips from NVIDIA and AMD. As a result, Saudi Arabia’s digital economy grew from 14% to 15.6% of GDP over the past three years.
- What are the side effects of this growth?
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Digitalization has outpaced innovation development. It faces a shortage of qualified labor and an underdeveloped environment for SME digitalization. Saudi Arabia ranked 132nd in labor productivity and 74th in knowledge and technology outputs on the Global Innovation Index. According to Digital Transformation for SMEs (2024), fewer than 67% of SMEs are documented as “fighting for survival.”
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Digitalization focused on AI shows limited impact and efficiency. According to the World Bank, AI activities make up only 1% of GDP, despite increasing investments. Commercial returns are still developing: about 63% of Saudi organizations report increased pressure to demonstrate AI ROI, and 53% mention gaps in their core technology infrastructure.
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Digitalization lacks cyber resilience. The National Cyber Security Index ranked Saudi Arabia 30th in 2025, down from 14th in 2022, reflecting changes in methodology and the progress of other countries.
- What can companies learn?
Saudi Arabia stands out in digitalization. It has the largest market in the region, turning the side effects of digital growth into government priorities and business opportunities. Therefore, we see the focus on investing in human development, innovation accelerators, the digitalization of SMEs, AI efficiency, and cyber security.
To conclude, Saudi Arabia's digital growth shows that the country is undergoing an unstoppable transformation across different areas, though at varying speeds. It’s a historic chance to invest there before this regional ambitious superpower becomes a global player.
