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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.
Dealing with W.T.O. Regulations and Developments:
With the forthcoming entry of the Kingdom into 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 some factories in certain industries 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 loose their share of the market.
Therefore, factories, specially 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.
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