Transformation from an Oil-based Economy to a Knowledge-based Economy in Saudi Arabia: the Direction of Saudi Vision 203
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Transformation from an Oil-based Economy to a Knowledge-based Economy in Saudi Arabia: the Direction of Saudi Vision 2030 Mohammad Nurunnabi 1
Received: 16 November 2016 / Accepted: 9 March 2017 # Springer Science+Business Media New York 2017
Abstract The central aim of this article is to explore issues related to the transformation of an oil-reliant economy to a knowledge economy in Saudi Arabia, a country which witnessed a remarkable revolution following the discovery of oil more than three quarters of a century ago (March 1938). The study provides insights into what the country’s knowledge economy looks like today and the potential policy issues related to how the economy might evolve into the future. Saudi Arabia, a member of G20, is the world’s largest oil exporter and derives about 90% of the government revenue from oil. Based on the documentary analysis (World Bank, United Nations, World Economic Forum, Ministries in Saudi Arabia and newspapers), the findings of this study suggest that there are six key aspects which need to be considered in developing Saudi Arabia’s knowledge economy: human capital, innovation, information and communications technology (ICT), the economy, education and employment. In particular, several challenges are identified relating to human capital, research and unemployment amongst university-educated females. The Saudi government’s Vision (Arabic: 2030 and the related National Transformation Program 2020 both stress the importance of diversifying the economy through development of the knowledge economy. The findings of this study will assist policymakers as they work to create sustainable knowledge economy framework for Saudi Arabia. Further research is required to compare the pillars of the knowledge economy in the Middle East. Keywords Oil economy . Knowledge economy . Saudi Vision 2030 . National Transformation Program 2020 . Research . Innovation . Saudi Arabia JEL classification J20 . J24 . O10 . O11 . 015 . 016 . O30 . O38 . O53
* Mohammad Nurunnabi [email protected]
1
Department of Accounting, College of Business Administration, Prince Sultan University, Rafha Street, PO Box 66833, Riyadh 11586, Saudi Arabia
J Knowl Econ
Introduction BNo century in recorded history has experienced so many social transformations and such radical ones as the twentieth century^. (Professor P. F. Drucker [1909– 2005], 1994, p. 53) Over the last five decades, the term Bknowledge economy^ has been used in a variety of contexts in academic literature, but the meaning remains vague (Strożek 2014, p. 223). The term has been used interchangeably with other terms such as knowledge-based economy, knowledge society, network economy, information economy, digital economy, knowledge-based society, new economy and intangible economy (Coyle 1999; Huang and Soete 2007; Hvidt 2015; Stiglitz 1999). The United Nations Development Programme (UNDP) (2010) also reports that knowledge economy has not only been used interchangeably with other terms but that the concept is understood and used differently in
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