Saudi IT manufacturing spend tops CEMA

IT spending in the Saudi Arabian manufacturing sector is expected to increase at a compound annual growth rate of 7.5% over the 2013–2018 period, according to the latest insights released today by IDC.

Software and IT services will be the fastest-growing segments, while third Platform IT solutions and the Internet of Things are also expected to play a more prominent role in the Saudi manufacturing sector over the coming 5–10 years.

IT spending in the sector is expected to increase at a compound annual growth rate of 7.5% between 2013–2018.

“The Saudi manufacturing sector is poised for significant growth and has the potential to become a technology-intensive industry, not only on an advanced regional level but also on a par with global competition in most areas,” says Martin Kuban, Lead Research Analyst, IDC Manufacturing Insights, CEMA. “The diversification of the country’s oil-based economy is progressing steadily, supported by a positive economic environment and favourable investment attitudes. And IT innovation spirits are rather high, as many of the new businesses are not saddled with extensive client-based solutions.”

The manufacturing sector delivers roughly 10% of Saudi Arabia’s GDP, while oil and gas processing and the related chemical industry remain the major drivers of economic growth.

“Manufacturing in technology- and engineering-oriented value chains will be driven by emerging SMBs, mostly established in industrial zones surrounding big cities,” Kuban added. “Many of these hubs will emerge as centres of innovation and excellence, closely tied to newly developed R&D facilities. IT will play a crucial role in these new establishments, and this will be in visible contrast to the country’s large manufacturing companies. While these will also undergo considerable IT transformation, it will typically be at a much slower pace and with less grace due to the lack of IT skills and poorer decision-making capabilities of their internal IT organisations.”