Industrial Policy: Making It Work for All Saudis

ndustrial policy has always been a key tool for Gulf countries to grow and diversify their economies. But today, with even nations like the United States taking a more hands-on approach, the Gulf is stepping up efforts to reduce its dependence on oil.

At a recent meeting hosted by the Arab Gulf States Institute in Washington (AGSIW), experts examined whether these renewed strategies will deliver lasting impact. Drawing on research by Steffen Hertog and Fuad Hasanov, the discussion highlighted both the potential and the pitfalls of industrial policy. While such policies can help diversify economies, they also run the risk of wasting resources or creating inefficiencies if not implemented with care. For Saudi Arabia, the real challenge lies in making these strategies both practical and inclusive — ensuring they are felt by ordinary citizens rather than simply announced from above.

To succeed, industrial policy must be woven into the social fabric — not just handed down from high offices. Saudi Arabia’s current efforts, driven by Vision 2030, aim to diversify the economy by focusing on strategic sectors like mining, manufacturing, logistics, and energy. The National Industrial Development and Logistics Program (NIDLP) is central to this approach.

But grand visions often look spectacular from a distance and feel disconnected up close. In the past, many state-led projects seemed like distant ambitions dreamed up in Riyadh, far removed from the everyday lives of most Saudis. Decisions felt top-down, with little consideration for how they would play out on the ground.

As a result, people often saw these projects as “not for us, but for them.” That sentiment is slowly changing. The early flurry of reforms — once dizzying and disorienting — has settled into something more grounded. People are beginning to find their footing amid emerging norms. There is a growing sense of inclusion and relevance. It's no longer just about glossy presentations and announcements; there is more space for people to speak up and be part of the process. This feeling of belonging — of participating in a larger national project — is essential to building public trust and momentum.

Still, industrial policy must keep pace with this new reality. It can’t rely on assumptions that people will simply fall in line. It must emerge from the ground up, rooted in local needs and aspirations. Engaging communities in the process can replace skepticism with genuine enthusiasm. After all, not everyone is destined to become a tech entrepreneur. There’s a meaningful difference between building a society of digital innovators and nurturing a community of skilled, proud workers.

From Degrees to Skills: A Changing Mindset

Education and skills training are at the heart of Saudi Arabia’s transformation — but they must amount to more than slogans. Launching impressive programs is the easy part; tailoring them to the realities of the job market is much harder. The Human Capability Development Program is a prime example: ambitious and well-designed, but its success depends on whether it prepares people for actual employment, not just theoretical qualifications.

In the past, success often hinged on holding a university degree. If you lacked formal credentials, doors closed — it was like a secret club: no degree, no entry.

That’s changing. Today, success stories emerge from many paths — from artisans preserving traditional skills to entrepreneurs without formal diplomas making their mark. The emphasis is shifting from academic pedigree to proven skills and real-world impact. It reflects a more inclusive approach, where hard work and talent carry more weight than credentials alone.

This matters because not every young Saudi dreams of coding in a coworking space. Many are still drawn to crafts, family businesses, and hands-on work grounded in Saudi culture. A balanced economy must speak to both realities — one that values a carpenter just as much as a coder.

Bridging the Regional Divide

Saudi Arabia’s economic story isn’t the same everywhere. The gleaming towers of Riyadh tell one tale, but smaller towns and rural areas often face a different reality. An industrial policy that overlooks these regions risks widening inequalities and deepening social divides.

Investing beyond the major cities isn’t just equitable — it’s smart. Talent exists in every corner of the country. Rural communities offer untapped potential, from agriculture to artisanal industries. The goal isn’t to force modernity onto traditional communities, but to build from their strengths — while creating pathways to modern skills and industries. That’s how inclusion becomes more than a slogan.

Transparency and Accountability: Building Trust

Governance matters. People understand that large-scale projects can sometimes turn into costly missteps. Without transparency and accountability, even well-intentioned policies can lose credibility.

Performance metrics should be more than PR talking points. They need teeth — and consequences when goals aren’t met. Public trust depends on this. Citizens need to know that government efforts are not about throwing money at problems, but about creating sustainable, well-measured solutions.

A Collective Transformation

Ultimately, the success of Saudi Arabia’s industrial policy will not be judged solely by the number of factories built or jobs created. Its true test is whether it resonates with the public — whether it inspires a sense of ownership and pride across the population.

Real diversification means more than transitioning from oil to tourism or technology. It means ensuring that citizens feel they are part of the story, not spectators. Saudi Arabia’s economic future must feel like a national project — not a technocratic blueprint. Only by closing the gap between ambitious policies and everyday lives can the Kingdom build a resilient, inclusive economy — one that belongs to all Saudis, not just a select few.

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