Initiatives for digital transformation of SMEs in Saudi Arabia highlighted

The Centre for the Fourth Industrial Revolution- in the Kingdom of Saudi Arabia (C4IR-KSA) and the World Economic Forum (WEF) have jointly with the Saudi Ministry of Industry and Mineral Resources (MIM) and the Saudi Authority for Industrial Cities and Technology Zones (MODON) and Arthur D. Little (ADL), launched a report titled “Modernizing Small & Medium-Sized Enterprises (SMEs) in Saudi Arabia.” It is a comprehensive guide for policymakers, industry leaders, and stakeholders – offering a roadmap to support industrial SMEs to adopt the Fourth Industrial Revolution, drive their growth and enhance their competitiveness.

Empowering SMEs: With the aim of building a regional industrial hub and creating a diversified economy, the Kingdom’s National Industry Strategy (NIS) emphasises that the application of advanced digital technologies is a key enabler in achieving Vision 2030 objectives for KSA’s industrial sector.

The report, led by the Centre for the Fourth Industrial Revolution- in the Kingdom of Saudi Arabia (C4IR-KSA) as part of the Centre’s project (Accelerating the Impact of Industrial Internet of Things for Small & Medium Enterprises), Co-branded with the World Economic Forum (WEF), and Co-authored by the Saudi Ministry of Industry and Mineral Resources (MIM), the Saudi Authority for Industrial Cities (MODON), and Arthur D. Little (ADL), focuses on the key efforts currently in place to promote the digital transformation of SMEs in the Kingdom. It highlights the pivotal role of technology in transforming industries and enabling them to be more efficient, productive, and resilient.

Engineer Albadr Adil Foudeh, Deputy Minister for Industrial Development at the Ministry of Industry and Mineral Resources of Saudi Arabia (MIM), said: “The digital transformation of SMEs is crucial for the economic growth and competitiveness of Saudi Arabia. This report provides valuable insights and recommendations on how to leverage Fourth Industrial Revolution technologies to enhance productivity, innovation, and competitiveness among SMEs.”

The analysis finds that advanced manufacturing technologies powered by cutting-edge digital tools are transforming industries by paving the way for connectivity, automation, and artificial intelligence to bolster manufacturing production efficiency, increase productivity, and improve resilience for businesses.

Dr Basma AlBuhairan, Managing Director of the Centre for the Fourth Industrial Revolution in the Kingdom of Saudi Arabia, in affiliation with the World Economic Forum, emphasized the importance of supporting SMEs in their digital transformation journey. She said, “SMEs play a vital role in the national economy, and it is crucial that they are empowered to adopt and benefit from digital technologies. This report showcases successful case studies and offers valuable insights on how to overcome challenges and bridge the technology gap in SMEs.”

The public and private sectors play a crucial role in overcoming challenges while industrial policies, investment in infrastructure, and technical support are among the key factors that can bridge the technology gap and drive wider adoption of advanced manufacturing technologies.

Digital Technologies: The report features three compelling case studies from Saudi Arabia, showcasing initiatives and strategies that have facilitated the digital transformation of SMEs. These case studies include Future Factories Program (FFP), the Knowledge-based Advanced Manufacturing Innovation Network (KAMIN) program, and the National Productivity Program (NPP), brought in consecutively by Dr Majid Algwaiz (MIM), Dr Ibrahim AlShunaifi (C4IR-KSA), and Eng. Abdulrhman Alaskar (MODON).

Each case study highlights the transformative power of digital and advanced manufacturing technologies in enhancing productivity, competitiveness, and innovation among SMEs. As Saudi Arabia continues on its digitalization journey towards achieving Vision 2030, these successful case studies provide valuable insights and lessons that can be applied globally.

Key Enablers: SMEs play a critical role in economies and impact larger enterprises; it is essential to ensure that they are not left behind. However, smaller enterprises face resource, technical know-how, and technological readiness constraints. By nurturing a set of key enablers, including a skilled workforce, access to finance, and Fourth Industrial Revolution awareness, SMEs can reap the benefits of digital technology.

Amer Hage Chahine, Senior Principal at Arthur D. Little, Middle East, highlighted the transformative power of digital technologies on industrial SMEs. He stated, “Digital technology is fundamentally altering the way industries operate, and SMEs should not be left behind. By embracing key enablers such as creating a skilled workforce, increasing access to finance, and upgrading infrastructure, SMEs can overcome challenges and reap the benefits of the digital revolution.”

Governments and private sector entities  can help SMEs overcome challenges, by upgrading infrastructure,  strengthening supply chains, and leveraging targeted support for digital technology adoption.