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Saudi & Japan unite for digital economy, eyes capital spending beyond USD 34.5 billion

Saudi delegation representing the Kingdom’s digital economy, space and innovation sectors met ministers from other countries and United Nations officials in Japan

Saudi Arabia and Japan have recently signed a memorandum of understanding (MoU) formalising their commitment to advancing the digital economy and enhancing digital government services in both nations.

According to the Kingdom’s government, the MoU encompassed various cooperative efforts, including digital platforms, e-signatures and documentation.

“This partnership will encompass collaborative initiatives in research and innovation, with a dedicated team developing digital services for the government. Furthermore, both nations have committed to exchanging best practices and policies to promote using the latest technologies in businesses,” stated an Arab News report.

The signing of the MoU happened in October 2023 at the Digital Agency office in Tokyo, in the presence of the Saudi Minister of Communications and Information Technology Abdullah Al-Swaha and Japanese Digital Transformation Minister Kono Taro.

Al-Swaha and a Saudi delegation representing the Kingdom’s digital economy, space and innovation sectors also met ministers from other countries and United Nations officials in Japan.

According to the Saudi Press Agency, Al-Swaha also met with United Kingdom Minister of State for Data and Digital Infrastructure Sir John Whittingdale to enhance the partnership between the two countries in digital economy growth, innovation and research and development.

The delegation also had a separate meeting with International Telecommunication Union Secretary-General Doreen Bogdan-Martin, where the Saudi Minister also talked about the prospects for expanding existing partnerships and initiatives to support the growth of the Kingdom’s digital economy.

Al-Swaha also interacted with Li Junhua, the United Nations under-secretary-general for economic and social affairs, to gather the picture of the digital economy.

In July 2023, Saudi Arabia and Japan set the stage for strong trade ties by exchanging 26 pre-signed economic agreements, which covered fields like healthcare, clean energy, mining and digital innovation sectors.

This exchange also marked the growing bilateral relationship led by Japanese Prime Minister Fumio Kishida, who, during his July 2023 visit, promoted his country’s local ventures and explored more profound opportunities to collaborate with the Saudi counterparts.

The development comes at a time, when fuelled by an influx of foreign direct investment and a significant USD 7 trillion development plan for information and communications technology-related giga projects, the Kingdom’s government is eyeing a capital pumping of over USD 34.5 billion by 2023 end.

Also, the International Data Corporation (IDC) is predicting strong compound annual growth rates (CAGRs) for software (11.4%) and IT services (8.7%) over the 2022–2026 period.

“The government sector is spearheading IT spending in the Kingdom in 2023, with substantial investments being made in the areas of AI, IoT, cybersecurity, and big data analytics — the critical building blocks of an ‘Experience Economy’. The key sectors of finance, communications, energy and resources, and manufacturing will be the next biggest spenders in 2023; however, the healthcare, finance, retail/wholesale, professional services, and education sectors are expected to see the fastest rates of growth over the next five years,” the report noted further.

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