REPORT: Saudi Arabia will Become Manufacturing Hub of the Middle East

By Bizclik Editor

Relentless spending on IT is set to propel Saudi Arabia into the regional leader in manufacturing, according to a report by IDC Manufacturing Insights.

The country is currently spending money on IT at a faster rate than any country in Central Europe, Middle East and Africa (CEMA).

The report, titled ‘Saudi Arabia Country Highlight: Understanding the Manufacturing Landscape’, says the investment on software and IT services will transform what has traditionally been a hardware dominated manufacturing scene.

Spending on software and IT services is predicted to increase at an annual rate of 7.5 percent between 2013 and 2018, making it the fastest-growing manufacturing segment of business.

The Internet of Things is also forecast to play a more important part in the next decade.

Martin Kuban, lead research analyst at IDC Manufacturing Insights, CEMA, said: “The diversification of the country’s oil-based economy is progressing steadily, supported by a positive economic environment and favourable investment attitudes. Plus, IT innovation spirits are rather high, as many of the new businesses are not saddled with extensive client-based solutions.”

Behind oil, gas and related chemicals, manufacturing accounts for around 10 percent of Saudi Arabia’s GDP. Other non-oil sectors are up and coming however, and these include aerospace and defence, life science and high-tech machinery.

“Manufacturing in technology and engineering-oriented value chains will be driven by emerging SMBs, mostly established in industrial zones surrounding big cities,” concluded Kuban.

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