How does local content contribute to Saudi Vision 2030

Introduction

Saudi Arabia launched initiatives and signed 15 agreements at the Local Content Forum, boosting domestic industries with an estimated SR12.4 billion ($3.3 billion) impact on gross domestic product. 

Local content plays a crucial role in achieving Saudi Arabia’s Vision 2030 goals by driving economic diversification and ensuring long-term socio-economic sustainability. Here’s how local content contributes to Saudi Vision 2030:

Economic Diversification

Local content initiatives help reduce Saudi Arabia’s reliance on oil by:

Developing new local industries and manufacturing capabilities

Increasing the private sector’s contribution to GDP

Fostering innovation and technology transfer

Job Creation and Workforce Development

Local content efforts support employment goals by:

Creating high-value jobs for Saudi nationals

Increasing Saudization rates across industries

Providing training and skills development for the local workforce

Supply Chain Resilience

By prioritizing local suppliers and products, local content initiatives:

Reduce dependence on imports

Enhance national security against global challenges

Improve overall supply chain resilience

Investment Attraction

Local content programs contribute to attracting investments by:

Encouraging foreign companies to establish local operations

Promoting technology transfer to the Saudi market

Creating opportunities for international partnerships

Economic Impact

The economic benefits of local content initiatives are significant:

Projects under local content initiatives reached SR800 billion ($213 billion) by Q3 2024

Local content in government procurement increased from 33% in 2020 to 47% by Q3 2024

Over 42,000 new job opportunities were created in the past three years

Sector-Specific Contributions

Local content initiatives are driving growth across various sectors:

Manufacturing:

The number of factories producing items on the mandatory list grew by 1,437, reaching approximately 6,100

Automotive:

Plans to produce 500,000 vehicles annually by 2030

Energy and Chemicals:

Aramco’s iktva program aims to increase local content from 35% in 2015 to 85% by 2030

conclusion

By focusing on building and leveraging local capabilities, capacities, and supply chains, local content has become a key engine in realizing Vision 2030 objectives. It supports the creation of a more diverse, resilient, and sustainable Saudi economy, aligning with the long-term goals of reducing oil dependence and fostering national economic growth.