Riyadh (Saudi Arabia) – Huawei, Microsoft, Facebook,… The brand new carousel of offices of the global tech giants parades along the immense arteries. Connecting by car the Financial District of the Saudi capital to the conference center, located 15 kilometers to the north, is already to be projected into the dreamed future of Saudi Arabia.
Huge sparsely populated territory, the country is not so far on the map of nations that weigh in the global digital economy. With a GDP of 646 billion dollars, it is first and foremost an oil giant, a prosperous rentier economy from which it is difficult to break away.
However, this is the ambition of the Crown Prince, Mohammed Ben Salman, known as MBS. Under his leadership, the country launched a reform movement in 2019, one of which is the diversification of economic activities. The country must therefore open up, sometimes at a forced march, to technology. The Leap conference, which was held this week in Riyadh, crystallizes these ambitions, and makes it possible to measure the path that remains to be traveled.
“We must use our geographical location to our advantage”
“Last year we had 100,000 people. This year we are at 250,000” proudly assures Naif Sheshah, head of planning and development of the Saudi Ministry of Digital. The aisles of the show are in fact full to bursting. The presence of 172,000 visitors was communicated by the organization at the end of the event. “Leap is both a way to interest Saudis in digital, and to bring in foreign players”.
Leap is both a way to interest Saudis in digital, and to bring in foreign players.
The contract signatures announced at the show reflect the desire to set up a true regional cloud computing hub in the Kingdom. 9 billion dollars will be invested in the country’s digital infrastructure, with the arrival of Microsoft Azure, Oracle and Huawei.
“We must use our geographical location to our advantage, at the crossroads of Africa, Europe and Asia,” says Naif Sheshah. Like what the Qatari and Dubai neighbors have succeeded with their airlines.
The cloud roadmap, while ambitious, remains unclear
Still, the cloud roadmap, while ambitious, remains unclear. Naif Sheshah, does not communicate on dates for the commissioning of data centers, but promises that it will be “fast”.
It is first of all the fintech sector that is exploding in the MENA zone. The first regional giants clash, and uses are highly developed. Contactless payment with a smartphone is the most popular payment method on the Leap lounge, and credit cards seem to have disappeared.
Saudi Arabia is supporting the movement by offering “regulatory sandboxes” to fintech startups wishing to develop there. “You can develop a product here, put it into production, have a few customers, without worrying about regulatory constraints,” says Naif Sheshah. “This makes it possible to test products without the immediate constraint of banking rules for placing them on the market.”
Bet everything on fintech
Mohamed Milyani is one of many startupers trying their luck on this fertile ground. His company Nqoodlet offers a B2B platform to manage corporate credit cards. It started in 2021 with a fundraising of 1.1 million dollars, achieved in 4 months. Enough to last 18 months.
The manager assures that his second fundraising will not pose any problem, and that he is already signing clients. “We are not in a very competitive market,” he notes. He adds that he quickly found 3 million dollars, when he only required 2.2 million.
“There are a lot of investors here who are ready to put their hands in their pockets,” explains a regional expert. “But they quickly need an ROI beyond 6%”. And this in a country without inflation. “But exit is not a problem” he moderates. And to cite the many national conglomerates that regularly market in the ecosystem.
The challenge of training for digital professions
Flexible regulations, promised digital infrastructures, juicy capital, what is the challenge of tech in the Kingdom? Well IT skills. “I only work with developers who are abroad” says the founder of Nqoodlet. “They are on renewable three-month contracts, which allows me to control the quality of their work”.
The country must therefore train a plethora of young people – nearly 70% of the population is under 30 – in digital professions. This is the work of the MISK foundation, which mainly sends Saudi youth to the United States for training.
But the Saudi strategy also consists in securing relations with neighboring countries where talent is not lacking. “Pakistan is on the Indian model for training, they release thousands of computer engineers every year,” says an expert. “but their digital infrastructure is very underdeveloped. Here in Saudi Arabia, there is a very strong market potential, but there is a lack of talent.”
Become a regional digital power
Connecting Pakistani developers and Saudi companies is one of the missions of the Digital Cooperation Organization (DCO). 13 countries from the region and beyond (Pakistan, Rwanda, Cyprus) have gathered there to develop their digital prosperity. Deemah AlYahya, the secretary general, refutes that the DCO is piloted by Saudi Arabia.
The fact remains that the organization was born in 2020, in the wake of the Vision 2030 roadmap, which articulates the country’s major digital transformation projects. “We want to create a Station F here” indicates more clearly a regional expert.
The DCO will publish next year a “digital index” to objectify the strengths and weaknesses of each country with indicators such as connectivity, financing possibilities, or the level of training. Enough to give a fairly clear idea to the Saudi leaders of the means of becoming a regional, if not global, digital power.