Would you buy a Saudi phone?

A professor once asked a room full of Master of Business Administration students: “Would you buy a Saudi phone?” Without hesitation, they answered: “No.” The question was more than hypothetical — it captured the challenge Saudi Arabia faces as it seeks to transform from an oil powerhouse into an advanced industrial economy.

For decades, the Kingdom has been known primarily for its energy exports, supplying the fuel that powers industries worldwide. Now, as the global economy shifts toward automation, renewable energy, and high-tech manufacturing, Saudi Arabia is making a strategic push to reposition itself as a major player in global industry.

This shift is not just about diversifying away from oil — it is about economic survival. The 2014 oil price collapse underscored the risks of dependence on a single resource, forcing the government to accelerate its long-planned economic transformation.

Vision 2030, the Kingdom’s ambitious roadmap for the future, laid out a strategy to expand non-oil sectors, including manufacturing, defense, automotive production, and pharmaceuticals. Central to this vision is the goal of increasing non-oil exports to over $226 billion by 2030 and establishing Saudi Arabia as a global industrial hub.

Saudi Arabia’s industrial strategy differs from traditional models. Unlike past manufacturing hubs that relied on low-cost labor, the Kingdom is building its industries around automation and advanced technology from the outset.

Robotics and AI-driven production lines will allow it to develop a highly efficient manufacturing sector without the constraints of legacy labor-intensive models. This approach could allow Saudi Arabia to bypass the traditional stages of industrialization and compete with established global players in high-value industries.

Energy remains a key advantage. Saudi Arabia’s vast oil and gas reserves provide some of the world’s cheapest electricity, reducing production costs for energy-intensive industries. This low-cost energy supply is a major incentive for global manufacturers looking to establish operations in the region. Additionally, the Saudi Industrial Development Fund offers financing that covers up to 75 percent of capital costs for new industrial projects, a level of state-backed support rarely seen at this scale.

Beyond financial and energy advantages, geography strengthens Saudi Arabia’s position. Located at the crossroads of major global trade routes, the country benefits from direct access to the Strait of Hormuz and the Suez Canal, two of the most important maritime passages for global commerce.

With heavy investments in ports, airports and railways, the Kingdom is rapidly developing the logistics infrastructure needed to serve as a global re-export hub. These developments make it easier for manufacturers based in Saudi Arabia to integrate into international supply chains and export finished products efficiently.

This transformation is already taking shape. The National Industrial and Logistics Development Program has expanded industrial financing by 162 percent, allocating $28 billion to boost targeted industries. Saudi Arabia is actively developing industrial zones and plug-and-play manufacturing sites, while a dedicated automotive manufacturing hub is emerging as a part of the country’s broader push to produce electric vehicles. The government has also committed $12 billion to advance pharmaceutical manufacturing and chemical conversion industries, further reinforcing its industrial ambitions.

“If the country can successfully leverage its financial resources, geographic advantages, and technological investments, it could emerge as a serious player in global manufacturing.”

Yet, industrialization is not just about building factories — it requires developing the workforce, attracting foreign investment, and fostering innovation. While automation reduces reliance on a large labor force, skilled workers remain essential for maintaining and improving high-tech production lines. Expanding technical education, research, and development will be critical to ensuring Saudi Arabia’s industrial ambitions translate into sustainable economic growth.

To establish itself as a credible industrial player, Saudi Arabia must also build strong international partnerships. Leading manufacturing nations including China, Germany and South Korea developed their industries through joint ventures, technology transfers, and collaborations with global companies.

Saudi Arabia is following a similar strategy by partnering with major firms in sectors including renewable energy, defense, and advanced manufacturing. By integrating into global supply chains, the Kingdom aims to accelerate its industrial progress and gain access to cutting-edge technologies.

Changing global perceptions is another challenge. Saudi Arabia has yet to establish itself as a producer of globally competitive consumer goods, and skepticism about Saudi-made products persists. However, history shows that reputations can evolve.

Decades ago, Japanese and South Korean manufacturers faced similar doubts when they introduced their cars and electronics to global markets. Today, brands such as Toyota, Hyundai, and Samsung are dominant forces in their respective industries. Saudi Arabia hopes to follow a similar trajectory, gradually shifting from an oil exporter to a producer of high-quality industrial and consumer products.

Beyond economics, this shift represents a broader transformation in Saudi Arabia society. Industrialization is reshaping the workforce, increasing private-sector employment, and creating opportunities in fields that previously had little presence in the Kingdom.

The rise of advanced industries coincides with wider social and economic reforms, from expanding women’s participation in the workforce to the privatization of state-owned enterprises such as Aramco. These changes signal that Saudi Arabia is no longer just an oil-rich state but an economy in transition, aiming to compete in a world increasingly defined by technological innovation.

But long-term success will require more than investment — it demands an innovation-driven culture. Advanced industries thrive on research and development, yet Saudi Arabia’s R&D spending remains lower than that of other industrialized nations.

To sustain its industrial ambitions, the Kingdom will need to expand university research programs, support tech startups, and encourage a culture of entrepreneurship. Without these elements, its industrial strategy may struggle to move beyond assembly and mass production toward true technological leadership.

Skepticism remains, and building a globally competitive industrial sector will take time. However, the pace of change suggests that Saudi Arabia’s transformation may happen faster than expected. If the country can successfully leverage its financial resources, geographic advantages, and technological investments, it could emerge as a serious player in global manufacturing.

The next time a professor asks whether students would buy a Saudi Arabia-made phone, the answer may not be as immediate — or as certain.

• Saoud Al-Behairi is a financial sector professional with over 20 years of experience in banking, government funding, and corporate finance.