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Saudi Arabia’s national transformation agenda has identified innovation fueled by research and development as a key enabler of its long-term socio-economic goals.
One of Saudi Arabia’s goals, as outlined in Vision 2030, is to be among the top 10 countries in the Global Competitiveness Index by 2030, rising from 24th place in 2022.
Two key components of the Global Competitiveness Index are directly related to R&D.
Saudi Arabia can improve these parameters by increasing public-private partnerships in R&D and focusing on a pool of innovative talent.
Another goal stated in Vision 2030 is to have at least five Saudi universities among the top 200 universities in international rankings.
Both of these objectives can be pursued to achieve socio-economic development.
Saudi Crown Prince Mohammed bin Salman has launched a new program for the research, development and innovation (RDI) sector.
The program aims to inject an additional SR60 billion ($16 billion) into the country’s GDP by 2040.
Mainly, the priorities of the RDI initiative include an annual investment equivalent to 2.5% of the country’s GDP in 2040, the creation of job opportunities in science and technology and, ultimately, the possibility for the Kingdom to become the largest economy in the Arab world.
Technology is a strong pillar of Saudi Arabia’s Vision 2030.
The government supports entrepreneurs and seeks investment from private and public companies to develop the sector.
According to the International Data Corporation, Saudi Arabia is expected to spend $33 billion in 2022 on ICT development, with the technology sector growing by 8% between 2019 and 2021.
Moreover, government data pointed out that the country’s economic sector experienced the highest growth rate in the first quarter of 2022 compared to the last 10 years due to an increase in activity in the oil sector.
A good example of national development strategies focused on encouraging innovation is China, which focuses on innovation that will have a massive impact on the economy and national competitiveness.
In recent years, substantial public and private sector investment in R&D has enabled China to establish R&D primacy and global innovation leadership, especially in technology through technologies such as intelligence and 5G.
In the field of AI, China is rapidly reducing the substantial lead that the West, mainly the United States, had in its research.
Chinese researchers are now publishing more AI papers and securing more patents than their American counterparts and the country is on its way to becoming a leader in AI-powered companies.
China also accounted for nearly a fifth of global private investment funding in 2021, attracting $17 billion for AI startups, a promising direction Saudi Arabia is already moving.
Saudi Arabia can also use AI to accelerate its digital economy.
The Middle East is expected to accrue 2% of total global AI benefits in 2030, or $320 billion, with Saudi Arabia expected to register the largest gains over this period, with AI contributing more than 135 .2 billion to its economy, according to a PwC report.
The Kingdom’s growing ecosystem concluded its best year for venture capital and deal funding in 2021, roughly quadrupling and attracting around $548 million in funding, data platform Magnitt said in its annual report. for the Kingdom.
Saudi Arabia aims to attract the “best” national and international talent, and to cooperate and co-invest in leading research centers, global and private companies and non-profit organizations. Startups would be given priority.
Saudi Arabia aims to attract a $20 billion investment in data and AI, as outlined in the National Strategy for Data and AI. The strategy aims to transform its workforce by training and developing a pool of 20,000 AI and data specialists and experts, of which 5,000 are highly skilled AI and data scientists.
Such a focus on AI will enable Saudi businesses to stay competitive by improving decision-making processes, solving administrative problems, reducing costs and boosting service delivery.
The other area in which China has taken a global lead is 5G innovation. China is home to the most extensive 5G mobile infrastructure in the world, with 1.43 million 5G base stations installed in 2021, accounting for more than 60% of the global total.
As a result, China’s mobile ecosystem has become a key driver of 5G evolution globally.
China is poised to extend its 5G leadership to next-generation 6G networks; the country announced a 6G strategy in 2019, even before industry standards or definitions had been established.
It is a leader in R&D related to 6G. A Nikkei report shows that China leads the list with 40.3% of 6G patent filings, well ahead of the United States with 35.2%.
Chinese companies followed suit, with Chinese corporate R&D exceeding GDP in 2019-20.
The business R&D/GDP ratio rose to 1.84% from 1.26% in 2010, growing faster than most developed countries.
A great example is Huawei, a Chinese but global company demonstrating the direct link between R&D and innovation.
Huawei’s R&D expenditure reached $22.4 billion in 2021, accounting for 22.4% of total revenue and bringing its total R&D expenditure over the past 10 years to over $132.5 billion. of dollars.
The company ranked second in the 2021 EU Industrial R&D Investment Scoreboard.
In 2021, Huawei had approximately 107,000 employees, representing approximately 54.8% of the entire workforce, working in R&D.
Today, Huawei holds one of the largest patent portfolios in the world.
In 2021, Huawei held over 110,000 active patents in over 45,000 families.
In 5G, Huawei was the frontrunner, having invested more than $600 million in 5G technology research between 2009 and 2013.
It was followed by an additional $1.4 billion investment in 5G product development in 2017 and 2018.
The company also took the lead in 6G innovation after an early 2019 start of 6G R&D and announced plans to launch its 6G networks in 2030.
Not only has R&D fueled Huawei’s past success, it is also fueling its business diversification drive.
From its R&D businesses, Huawei has nurtured new business units such as Huawei Digital Power, which integrates digital and power electronics technologies, developing clean energy, enabling energy digitalization and carbon neutral directions for driving the energy revolution for a better and greener future.
In this regard, Huawei has signed an agreement with Saudi Red Sea New City on an energy storage project.
The energy storage capacity of the project reaches 1300 MWh, which is by far the largest energy storage and off-grid energy storage project in the world.
Additionally, Huawei Rotating Chairman Guo Ping announced plans to launch a cloud region in Saudi Arabia, noting that the 10% of organizations that embrace digitalization grow their revenue up to five times faster than the rest. .
Following the Chinese government’s initiative to empower startups, Huawei last year announced a new support program in the region called SPARK.
It is part of the HUAWEI CLOUD Oasis program launched in September 2021, which plans to invest $15 million over the next three years to accelerate the development of businesses and technology ecosystems in the Middle East.
The company contributes to the development of ICT talent in Saudi Arabia and has successfully implemented the Saudi Talent Activation Program (STEP), which aims to develop the ICT talent ecosystem in the Kingdom.
Such public-private collaborations can enable the country to bridge the gaps between the demand for the future digital workforce and the supply of local talent.
In addition, Huawei recently added a new category to its Apps Up 2022 global content – “Best Arabic App” – to encourage regional developers to create app solutions that meet the needs of the region and enrich Arabic content.
Innovation is also key to building resilient economies that are strengthened against global disruptions.
R&D has enabled China to circumvent the US-led campaign to isolate Chinese companies from the global technology market. Chinese enterprises in both the public and private sectors have risen to the challenge by pursuing technological self-sufficiency, especially in semiconductors.
China is traditionally the world’s largest importer of chipsets. However, last year, China’s imports of integrated circuits (ICs) fell 9.6% in volume in the first quarter of 2022 compared to a year ago, according to data from China Customs, reversing an increase of 33 .6% over the same period in 2021.
The reduction in import volume stems mainly from China’s vigorous push towards technological self-sufficiency.
Saudi Arabia is an ambitious nation currently taking impressive leaps towards the future and innovation.
Due to the positive changes the Kingdom has experienced in the year 2020-2021, it has fallen from 83rd to 63rd place, according to the Heritage Foundation’s Freest Economies Index.
The country has already made impressive progress in establishing a knowledge-based economy over the past decade, thanks to ambitious government initiatives.
With a strong base of a tech-savvy population, world-class ICT infrastructure and the region’s largest economy, innovation will be the spark that will accelerate this goal.