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The forth industrial revolution and its impact on the Saudi economy, security, and diplomatic relations

Abstract

This study will address the fourth industrial revolution and the challenges the kingdom faces in terms of economy and security. The researcher will examine the implementations of artificial intelligence and financial technologies in Saudi Arabia. The findings of the study will determine what the future of the fourth industrial revolution may have on the Saudi society from an economic, social and security perspective. This study will go through the consequences of the fourth industrial revolution and shed light on what benefits and jobs it will create, as well as the disadvantages and obstacles in today’s modern society.

Key words: Security, Artificial Intelligence, Financial technologies, political decisions.

Research questions

What is the forth industrial revolution?

How will the forth industrial revolution impact Saudi Arabia’s economy, security, and political decisions?

Introduction

The Kingdom of Saudi Arabia today is shifting from being a commodity-based economy into being a knowledge based oriented economy.  It’s in the core of vision 2030 to diversify the country’s economy and attract foreign direct investment that will contribute to the kingdom’s GDP.

This transformation will have a profound impact on the kingdom’s political, social, and economic relationship with other countries in the upcoming years. Amirat, A., & Zaidi, M. (2019)

That been said Saudi is adapting new measures through the forth industrial revolution. It will bring about change in a speed level and force, unlike anything we have witnessed before. It is a new era of change that will be extremely dependent on technology weather it’s IOT- Internet of thing, robotics, or 5G.

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It is the age of innovation and Saudi Arabia is adapting high measures in order to shift its way of work whether internally with local stakeholders or externally.

Going back in time the first industrial revolution was in 1812 where it brought mechanical innovation into the picture. E.g. steam engine, cotton spinning, and railroads. Engerman, S. (1994).

However, the second industrial revolution brought in mass production threw assembly lines, and electrification.

Moving forward in the early 1980’s right mainframe computers, programming, and computing the Internet was the big thing back then.

In this day and age, the forth industrial revolution is all about nanotechnology 3-D printing, Mobile networks and many more. All this will create realities that are unprecedented.

Moreover, my paper will discuss the process of change in AI and financial technologies, and its implications on the Saudi economy security in different fields. in addition, my research paper will closely examine the relationship between a growing economy and the diplomatic and political impact that has on other nations. It will also look into how this new digital age will affect the kingdom’s security and safety. It’s exciting times in Saudi Arabia and the 4IR will be one of the major factors that will propel the kingdom to new social and economic heights. Consequently, will have a strong impact on the kingdom’s role in the political world and the way it interacts with other nations.

Methodology

The methodology that will be used is qualitative not quantitative. Meaning it will use mainly journals, books, newspapers as a source of information. Hence, the 4IR in Saudi Arabia has already began its journey to access the kingdom with a strong desire to foster the new and vibrant ICT industry.

The communication sector was one of the first sectors in the privatization program the aim was to provide quality service with low prices to enhance the kingdom’s economy. Accordingly, the reduction of regulatory interventions was supported. broadband services were enabled with high speed and low tendency. moreover, in the world economic forum the kingdom was ranked 8 in government ICT efficiency, which showcases the importance of keeping up to past with the rest of the world when it comes to expertise and know-how. McClatchy (2013, Jun 25)

If we look at hajj alone there were more than 75million subscribers, in terms of the capacity of mobile network. With more than 13 thousand 2G,3G,4G mobile-based stations and this increase in capacity allowed the kingdom to host more pilgrims. Subsequently, strengthened the economy.

Literature review

Reform Efforts Move Ahead

The 2030 vision has made a transformational effect on the Saudi economy. However, not all reforms where taken easily by the public due to cutting certain benefits and wages. Nonetheless, SEDA the Saudi council of economic affairs headed by MBS Mohammed bin Salman, launched10 new programs in 2017 to reinforce the economic goals of vision 2030. These fresh programs contain more opportunities for Saudi citizens to own homes, as well as more facilities for pilgrims visiting the holy lands. The goal is to increase the number of victors by the year 2030 to 30 million. Eventually these new programs will open the door for economic growth and prosperity. Platt, G. (2017)

One of the main goals of these programs is to reinforce and support the role of (PIF) the Public Investment Fund, which has a goal to become the world’s largest sovereign wealth fund it currently is focusing on FDI foreign direct investments, as well as promoting mega investment projects in and out of the kingdom which will assure economic security for the kingdom.

Moreover, this fund owns Saudi Aramco, the biggest oil company in the world. And what is more exciting that when this monster of a company goes public and enlists 5% shares. If the outcomes of the IPO are successful it will be a game changer for PIF and increase the funds share up to 2 trillion SR. This will subsequently bring new diverse investments to the kingdom on the long run and secure the country’s economy. Subsequently, with this growing economy emerging technology will come about and as a result it will impact both the private and public sector. This transformation that the government entities have gone through in this short period of time is simply outstanding. Today most services are on line automatized services. The kingdom has adapted a paperless government system and has injecting new advanced technologies, to match the fats past of growth in the future emerging market.

Therefore, the Saudi economy will gradually grow. Subsequently, political decisions will differ because Saudi Arabia will play with the big players. It now has more than just oil but a diversified tech-based economy that will ultimately affect political choices the country will take going forward.

Realizing the Benefits of 4IR Future of Production in KSA

The take on the 4IR in Saudi Arabia has been proactive, the discussion has been mainly revolved around the technology and innovation ecosystem. A.T, Kearney (2018).

Production, plays a crucial role in the Saudi economic value, it is a cornerstone in this transformation. The main technologies that will form the Prospect of Production in the kingdom are the Internet of Things (IoT), artificial intelligence (AI), advanced robotics, 3D printing.

On the other hand, in terms of government they have automated many of the services and paved the way to adapt the new coming of the 4IR by up warding sector level strategies. Moreover, when one talks about the forth industrial revolution NEOM the mega free zone in Saudi Arabia must be mentioned. The futuristic city that will be powered through renewable energy and provide state of the art technologies. MBS said “Everything will have a link with artificial intelligence, with the Internet of Things everything.” Crown prince Mohammed bin Salman.

That been said Saudi Arabia has invested heavily in the SME’s small and medium size enterprises especially the FinTech and technology biased industries. This process has been done by providing a platform of sandbox experimentations and building a community of entrepreneurs by fostering innovation, and encouraging experimentation.

Moreover, when it comes to Hajj security plays a great role, and all these advanced technologies will help vet and scan people when coming into the kingdom, as well as facilitate the process for such an enormous crowd of people. Because security is the corner stone to have a successful haj and automating services and transportation as well as high speed interned will certainly enhance the kingdom’s control and capacity to host pilgrims.

New Realities, New Technologies

The shale oil production has been predicted to be a game changer in terms of the US and gulf relationship especially with the kingdom of Saudi Arabia since it’s the biggest producer of oil worldwide. Thus, how strong the commitment will be in the Middle East. Nevertheless, there are other emerging fields of interest for US investors with a sold infrastructure. These areas are mainly allied with innovative technologies, such as fintech, biotech and artificial intelligence.

These emerging technologies are getting more and more attention in a region that needs to diversify its economy. The goal is to change from being an unbiased to a multilateral economy. This is evident in the approach the young Saudi crown prince Mohammed bin Salman. The bold vision he announced called the 2030 vision with a clear agenda to increase competitiveness and attract FDI to transform this oil-based country to a knowledge-based country by stepping into the digital age. Platt, G. (2018)

The kingdom has one of the highest mobile penetrations, where 70% of its population are under the age of 30 this young and growing population is tech-savvy with high digital skills. Where it’s anticipated to drive swift development in the demand for broadband and ultimately growth in the 5G digital use by the year 2023.All this new upcoming technology will shape the way the kingdom communicates with other nations, driving the steer of innovation will help secure government classified information and strengthen it’s inelegance and security agencies against any potential threat.

In the same time, it will be the drive of innovation in the region so this will position the kingdom in a strong place especially amongst the first world countries like china, western Europe, and north America and ultimately affect political decisions.

Moderate Saudi Arabia: crown prince shakes up kingdom

Saudi Arabia is known for its close proximity to some of the world’s busiest ports and traffic lanes, as well as it being the cradle of the Islamic world; and the new 4IR plays a massive role, if one looks at Haj and Umrah alone A.I can be used to build driverless trains; in addition to face-scanning every pilgrim that

comes into the country to facilitate vetting and enhance security measurements. Moreover, this will allow pilgrims and government officials to avoided the hassle of going though security checks and customs, this wearying process can be transformed into a sophisticated state of the art face and body recognition.

Moreover, 5G can be used to speed internet connectivity and use smart bracelets to locate pilgrims or give them instructions on how to perform Umrah. Another amazing use is IR-VR virtual stimulation experience; where pilgrims can perfume hajj in their countries before entering the kingdom. This will ultimately facilitate the work of police and military officials, because most pilgrims will know exactly what to do, and where to go because they already experienced it virtually back in their homeland. In conclusion, this ultimately means better security services and a safer experience. Yusoff, M. F., Zulkifli, A. N., & Mohamed, N. F. F. (2011, September).

Furthermore, Saudi Arabia sits in the heart of the Islamic world and is a hub that connects 3 cotenants. Accordingly, it has an immense impact on the political events in the middle east. Thus, this new information age has advanced all of these assets that Saudi Arabia has due to its geopolitical status. So, the dynamics of the political game has changed in Saudi Arabia, if you look at the level of internet penetration rate alone, this has dramatically affected the political seen in Saudi Arabia; because it allows key decision makers to use social media and include public opinion in political decisions.

Moreover, because Saudi Arabia has a strong drive to advance it’s ICT sector this has impacted the way other countries view the kingdom. It started to host mega international forum like Davos in the Desert a reference to the world economic forum. This mega investment summits gives a platform for Saudi Arabia, to change political perception with more than 150 global leaders gathering in one place to discuss innovation, last year it had three main themes: investment in transformation, the opportunities in technology, last but not least the progression in human potential.

So, one can conclude that all this focus on technology and innovation has changed the political and economic impact Saudi has both internally and externally with other nations. A clear example is the political announcements that take place in such forums by launching blueprints for a futuristic tech based cities like NEOM and the red sea; that will be powered by renewable energy and driverless cars. CHOPRA, A. (2017)

Moreover, these types of forum that foster innovation are an excellent platform for speeches like the famous one MBS said in Davos in the dessert. “We will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today” Mohammed bin Salman.

This speech alone shook the kingdoms current political status and has gradually transformed it into a moderate Islamic country.

Furthermore, another example is the G20 which is a rewound summit where 19+ of the world’s most important and industrialized immerging countries gather annually to discuss economic, and global challenges. Cooper, A. F. (2010). This year world leaders gathered in Osaka Japan and the upcoming. However, the next G20 will be hosted in Riyadh. This reflects the strategic and political weigh of Saudi Arabia amongst its peer. The G20 is considered an informal forum meaning the leaders cannot directly adopt laws, rather they simply act as a catalyst for new initiatives. Thus, Saudi Arabia hosting the G20 will give it the opportunity to enhance diplomatic ties, while looking into economic issues.

In conclusion, the G20 is a mega international event that has many diplomatic implications. So, one can see that Saudi Arabia is getting more and more opportunities by actively being part of the international community. This is directly resulted from the choice to diversify its economy and change from being an oil-based country into being a knowledge-based country that fosters innovation and creativity.

Analyses and conclusion

From a security point of view these new emerging technologies will help protected Saudi Arabia from external threats, specifically when it comes to cyber security. Because when Saudi is able to advance in technology that will untimely bolster its cyber security and intelligence forces against any threats, especially from Iran that has tried multiple times to penetrate the Saudi government agencies and the Saudi mega oil company Aramco a clear example of cyber-attacks were the 2012 attacks on the national oil company Aramco where over 30.000 computers were hit with devastating outcomes on its secret security-based information.

Another example is the hit KSU king Saud university hit it got from an unidentified hacker. All these incidents forced Saudi to strengthen its anti cyber laws and enforce high security measures. Because all this increase in internet use has affected the Saudi society in a negative way as well, with more than 3.6 million vicomtes of cybercrime. Thus; Saudi Arabia has approved a cybercrime agreement (no. 126 of 2012) in Riyadh Saudi Arabia, and emphasized efforts on protecting from cyber terrorism and interception. Elnaim, B. M. E. (2013, December).

So, in terms of security, focusing more on tech-based fortification services will be able to shield the kingdom from any external threats.

From a political stand point this new web of information, will change the modern political landscape. These technologies can create a clever legislative process. Using social media alone and enhancing means of connectivity. For example, Minister and decision makers can speak directly to the public and seek public opinion, before or after political decisions are made.

So, in conclusion I believe you can either ride the wave or go against it, and Saudi Arabia has decided to adapt and enhance its abilities and foster innovation when it comes to tech based revolutionary industries, by categorizing data and using it in the right manner. Thus, develop the right policies.

References:

  • Engerman, S. (1994). The Industrial Revolution Revisited. Was the Industrial Revolution Necessary doi:10.4324/9780203059432.ch6.
  • Amirat, A., & Zaidi, M. (2019). Estimating GDP Growth in Saudi Arabia Under the Government’s Vision 2030: A Knowledge-based Economy Approach. Journal of the Knowledge Economy. doi:10.1007/s13132-019-00596-2.
  • Platt, G. (2017). Reform Efforts Move Ahead: A new crown prince is in a stronger position to implement the Saudi’s ambitious Vision 2030 program. Global Finance, 31(7), 78.
  • A.T, Kearney. (2018) Title: The Realizing the Benefits of 4IR Future of Production in KSA G. (2018). New Realities, New Technologies. Global Finance, 32(4), 58-60.
  • McClatchy (2013, Jun 25). Saudi ICT investment exceeds SR 135 bn. Tribune Business News.
  • A. (2017). Moderate Saudi Arabia: crown prince shakes up kingdom.
  • Elnaim, B. M. E. (2013, December). Cyber crime in Kingdom of Saudi Arabia: The threat today and the expected future. In Information and Knowledge Management (Vol. 3, No. 12, pp. 14-19).
  • Yusoff, M. F., Zulkifli, A. N., & Mohamed, N. F. F. (2011, September). Virtual Hajj (V-Hajj) Adaptation of persuasive design in virtual environment (VE) and multimedia integrated approach learning courseware methodology. In 2011 IEEE Conference on Open Systems (pp. 250-255). IEEE
  • Cooper, A. F. (2010). The G20 as an improvised crisis committee and/or a contested steering committee for the world. International Affairs, 86(3), 741-757.

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The forth industrial revolution and its impact on the Saudi economy, security, and diplomatic relations. (2019, Dec 11). Retrieved from http://studymoose.com/the-forth-industrial-revolution-and-its-impact-on-the-saudi-economy-security-and-diplomatic-relations-essay

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