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 Future Challenges facing Saudi Industries

  • ​Future Challenges facing Saudi Industries

    At this juncture with the Kingdom marching into the twenty first century, industrialization remains the strategic choice in accelerating the achievement of economic development objectives. However, with the formation of a future economic climate characterized by more openness; high competitiveness; proliferation of new economic trends; information and technology innovations as well as other features of globalization, numerous challenges are being presented to economies and business activities worldwide. In this context the future of the Kingdoms industrial sector and, in turn, the role of the SIDF as a financing institution to this sector, demand urgent attention. In an increasingly globalize environment, where open trade rules, several key elements have emerged as important challenges to the future of Saudi industry. The following is an overview of some of the most daunting challenges:
  • Improving Competitiveness of National Products

    The upgrading of the international competitiveness of Saudi Industrial products is necessary, not only to capture a share of international export markets, but also to maintain and enlarge the market share  of the domestic market. Meeting this challenge successfully will necessitate the raising of productivity levels within the Kingdoms industrial sector to global standards.​ 
  • Keeping pace with Developments in International Markets

    Now-a-days, developments and innovations in international markets and technology are rapidly advancing, posing major challenges to business sectors worldwide, especially in industrial contexts. To meet such challenges, it is important to create flexible mechanisms for the improvement of management, design, production, marketing and all other aspects of the industrial business in the Kingdom. 

     
  • Expediting Transfer and Adoption of Technology

    Technology plays a critical role in increasing productivity. Thus, it directly affects the competitiveness of industrial products. Accordingly, the establishment of a solid base for technology is of paramount importance in planning the future of industry in the Kingdom. In this regard, the Kingdom needs to improve the technical capabilities of its national industries notwithstanding achievements already evident in the field of technology transfer. More importantly, however, is the urgent need for positive concerted efforts on the part of those directly concerned with industrialization to adapt and develop technology already available e.g., by means of research carried out by relevant industrial corporations collaboration with universities and techno-scientific institutions, or by attracting high-tech foreign investments.
  • Dealing with W.T.O. Regulations and Developments

    As Kingdom of Saudi Arabia is a full member in the W.T.O., an additional need has arisen for the country to adapt and comply with the rules of the Organization, which are binding on all member countries. Government policy continues to be the adoption of strategies that will maximize the benefits of membership of the organization and the nullification or mitigation of any adverse effects. Moreover, it will be necessary for such strategies to take into account new future challenges within the framework of the organizations regulations, and emergence of new issues such as environment, labor and others.
  • Industrial Environment and Sustainable Development Framework

    It is certain that the current concern with environmental issues will gain growing momentum in the future. Therefore, maintaining of the industrial environment while increasing efforts and developing the requisite technology to contain the adverse effects of industrialization, poses a formidable challenge to the industrial sectors and units in the Kingdom.

     
  • Development of Saudi Manpower Capabilities

    The skills and quality of the industrial workforce are regarded as vital factors within the framework of industrial development and the competitiveness of Saudi industry in the future. In order to develop Saudi manpower capabilities, it is necessary to revise and intensify the fields and quality of technical education and vocational training, so that their output would match the requirements of industrial firms in all specializations. 
  • Improving Industrial Management

    It hardly needs reiterating that improvement of the performance and productivity of industrial enterprises depends on the efficiency and quality of the management of such enterprises, as factor of crucial importance in the face of growing to international competition and rapid developments in marketing and technology. Moreover, there is also an urgent need to give special attention to this factor in the case of small and medium industrial enterprises, which constitute the majority of the operating Saudi Industrial plants. 
  • Implementation and development of the Integration Concept

    As known and observed from modern industrial management experiences, vertical integration undertaken by specific industries (in the same industry) do not achieve their presumed benefits. Concentration on the basic activity of the specialized product might be affected due to lowered efficiency and higher operational costs. In some cases, such factories lose their share of the market. Therefore, factories, especially the larger ones, should rely on other producers, preferably local, in procuring their requirements of materials and feedstock. Such collaboration will, ultimately, result in a better quality basic product which can compete effectively in local and export markets. 
  • Increasing Resources and Investments in the Industrial Sector

    Despite the notable achievements of the industrial sector in the Kingdom, its overall contribution to the GDP is still less than aspirations. To ensure a more effective role for the industry in the country's economy, there is a need for intensifying channeling of resources and investments, particularly in the manufacturing industries sector. To achieve this objective, admittedly a challenging one, national and foreign private entrepreneurs must work in collaboration with government efforts to improve the Kingdoms business and investment environment for raising investment levels in this sector.