From 2021 to 2023, the digital sector attracted an average of 8.3% of global foreign direct investment (FDI), a notable rise from 5.5% ten years prior. Yet turning capital inflows into inclusive economic advancement demands more than funding—it requires well-structured regulatory frameworks. Saudi Arabia exemplifies how emerging economies can cultivate digital ecosystems that stimulate innovation, competition, and broad participation. n nThe Kingdom’s digital economy now generates SAR 495 billion ($131 billion), representing about 15% of its GDP. With Vision 2030 aiming to add another SAR 50 billion ($13 billion) by the end of the decade, regulatory modernization has played a pivotal role in enabling this expansion. Coordinated reforms across government bodies have linked infrastructure development with long-term competitiveness and equitable access. n nA key driver has been the Communications, Space & Technology Commission’s (CST) National Frequency Spectrum Strategy (2020–2025), designed to optimize radio spectrum use for next-generation technologies like 5G and the Internet of Things. By engaging telecom operators and stakeholders through open consultations, CST established transparent rules for spectrum sharing and infrastructure co-location, accelerating rural network deployment. Clear licensing procedures have boosted investor confidence, encouraging sustained private-sector engagement. n nOn the demand side, national initiatives such as the Future Skills Program and the Digital Entrepreneurship Center are narrowing socio-economic and gender disparities in digital access. These programs, developed in partnership with private firms and international organizations, focus on building capabilities in cloud computing, software engineering, and cybersecurity. As a result, the country now enjoys a median mobile internet speed of 129 Mbps—ranking fourth among G20 nations. n nAdditional regulatory enhancements have strengthened fintech, cloud services, and digital trade, creating fertile ground for innovation. Collaboration with domestic players like stc group has expedited 5G rollout and increased digital adoption across sectors. Universal service programs have also funded connectivity projects in underserved regions, while inter-agency coordination has minimized redundancy and improved execution speed. n nDespite these achievements, obstacles remain. Regulatory overlap across telecom, data privacy, and cybersecurity domains can lead to inconsistent oversight. Rural connectivity gaps persist, and legacy policies on over-the-top (OTT) services may constrain technological evolution. Inflexible spectrum allocation and shifting tax policies could also deter future investment if not addressed. n nNonetheless, these challenges present opportunities for policy refinement and deeper cross-sector coordination. The Saudi experience offers actionable insights for other nations: first, consolidating digital governance under a unified authority to enhance policy alignment; second, promoting public-private partnerships for rural infrastructure, including shared networks and spectrum leasing; third, integrating digital literacy into national education and enterprise support programs; and fourth, aligning tax incentives with connectivity and innovation goals. n nTransparent service mapping, streamlined permitting, and performance-linked subsidies can further accelerate progress. By anchoring policy outcomes in measurable impact and sharing best practices globally, Saudi Arabia is not only advancing its own digital transformation but also contributing to international benchmarks for inclusive digital growth. Through strategic reforms, the Kingdom has nurtured fair market conditions, sustained investment, and ensured that digital benefits reach all segments of society—a model others can adapt. n— news from The World Economic Forum
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Regulations build a digital economy – just ask Saudi Arabia
Between 2021 and 2023, the digital sector captured 8.3% of global FDI on average. n nTurning this investment into meaningful digital inclusion and progress relies on strong regulations. n nSaudi Arabia is a case study in how developing economies can build growth-positive digital regulatory environments. n nFor any developing country, building out an effective and functioning digital economy is crucial – and central to this is delivering infrastructure projects that make this possible. But less is said about the regulations behind those projects that make them possible, n nRobust regulation is an essential component of bridging the digital divide, and it makes infrastructure investment possible. Equitable access, healthy competition, and sustained investment all rely on strong regulations being hashed out at the top levels. n nWhen it comes to the digital economy and all the risks and opportunities it poses, this is particularly important. OECD guidance highlights the importance of transparent connectivity mapping, streamlined permitting processes, infrastructure sharing and spectrum policies with rural coverage obligations. Complementary measures such as performance-based public funding, digital literacy programmes and targeted support for low-income users and small businesses are equally critical for promoting digital inclusion. n nBetween 2021 and 2023, the digital sector captured 8.3% of global FDI on average – up from 5.5% a decade earlier, but turning this investment into meaningful progress on inclusion and digital economy growth needs more than cash. Countries including Saudi Arabia show us how to move from investment to impact. n nSaudi Arabia’s digital growth spurt n nThe Saudi digital economy now contributes SAR 495 billion ($131 billion), accounting for approximately 15% of GDP, with the Vision 2030 goal of expanding this by a further SAR 50 ($13 billion) by 2030. n nSaudi Arabia’s regulatory evolution has been instrumental in this. Through coordinated policy reforms and cross-government programmes, the Kingdom is linking infrastructure investment with inclusive growth, innovation, and competitiveness across industries. n nTake, for example, the Communications, Space & Technology Commission’s (CST) National Frequency Spectrum Strategy 2020–2025. It aims to expand the efficient use of radio spectrum to support innovation, emerging wireless technologies and national security. The strategy focuses on enabling digital growth through optimized spectrum management, encouraging investment and supporting new applications such as 5G and the Internet of Things. n nCST worked with operators and stakeholders through open consultations to shape transparent frameworks for spectrum sharing and infrastructure co-location, helping extend coverage faster and more efficiently to rural areas. Clear rules and transparent licensing frameworks have given investors the predictability they need to continue driving private-sector growth within the Kingdom’s digital economy. n nSaudi Arabia’s approach addresses both supply- and demand-side challenges. Its universal service programmes have financed connectivity projects in remote areas, while national digital strategies enhance coordination among agencies to reduce duplication and deliver results faster. n nThe result is a median mobile internet speed across the entire country of 129 Mbps – the fourth highest among G20 nations. n nOther recent regulatory measures have reinforced market confidence and opened new space for innovation in areas such as fintech, cloud services and digital trade. n nCooperation with local companies like stc group have played a significant role in this transformation, accelerating 5G deployment and digital adoption to support the country’s technological advancement. n nSaudi Arabia has also invested in digital skills and literacy initiatives, including the Future Skills Program and the Digital Entrepreneurship Center, which help bridge socio-economic and gender gaps in digital access. These efforts complement regulatory reforms by ensuring that citizens and SMEs can effectively use new technologies and benefit from digital services. Both initiatives partner with the private sector and global organizations to strengthen digital capabilities in cloud technology, software development, and cybersecurity, ensuring that wider connectivity translates into tangible economic participation. n nLoading… n nChallenges remain for Saudi Arabia n nDespite significant progress, challenges persist. Overlapping mandates across telecom, content, privacy and cybersecurity domains can lead to fragmented oversight and inefficiency. Connectivity gaps remain in rural and remote areas, while outdated OTT frameworks may hinder innovation. Inflexible spectrum policies and evolving tax burdens could also discourage investment. n nUnless addressed, these issues risk impeding the Kingdom’s digital momentum. At the same time, these challenges open the door for new policy ideas and stronger collaboration between sectors, helping regulators align more closely and respond faster to change. n n4 ways economies can learn the Saudi lesson n nThe Kingdom’s experience offers valuable lessons for other countries seeking to advance digital inclusion. While the challenges and opportunities in each country are varied, the Saudi experience has brought to the service three key concrete ideas for better policymaking: n n1. Establish a unified digital governance model to avoid overlapping mandates and improve policy coherence. n n2. Prioritize public–private collaboration in deploying rural connectivity solutions, including shared infrastructure and spectrum-leasing frameworks. n n3. Embed digital literacy and skills training in national strategies so citizens can fully participate in the digital economy. n n4. Align incentives and tax policies to reward investments in connectivity and innovation. n nCountries aiming to build on similar progress can develop transparent connectivity maps to reveal service gaps, establish one-stop permitting systems to accelerate infrastructure rollout, and design performance-based incentives that extend service to remote areas. Integrating digital skills into national education agendas and small-business programmes can further strengthen adoption and impact. n nSaudi Arabia’s next step is to modernize and align regulatory frameworks to ensure a cohesive, adaptive and inclusive approach. By linking policy execution to measurable outcomes and sharing lessons through international cooperation platforms, Saudi Arabia is making progress in building out a digital economy that now contributes to shaping global standards for inclusive digital development. n nBy embracing reforms, the Kingdom has fostered fair competition, sustained private-sector investment, and ensured that the benefits of digital transformation reach all citizens and businesses – a blueprint that others can follow.