Robert McNamara
robert@sbjbc.org
Sir Kier Starmers Visit to Saudi Arabia
On 9 December 2024, PM Sir Kier Starmer met with Crown Prince Mohammed bin Salman in Riyad to discuss ‘shared challenges and opportunities’ with a focus on economic growth, regional security and defense. Kier Starmer has rightly recognized that Saudi Arabia is a key partner and that targeting global contracts and investment is necessary for UK economic growth.
The PM was attempting to foster new Saudi investment in the UK, building on similar successes such as the landmark announcement by Graphene Innovation Manchester, for the first commercial production of graphene-enriched carbon fibre in conjunction with the NEOM Giga-Project. This project is expected to create more than 1,000 skilled jobs in the north of England and generate £250 million of investment into a research and innovation hub in Greater Manchester.
The trip last month represents continued recognition of the critical importance that Saudi Arabia and the surrounding Gulf holds to the UK. The PM was attempting to highlight investment opportunities in the UK following recent deals that saw Saudi Arabia “yielding” 4,000 jobs to the UK. From the meeting, a new defence partnership was agreed, one designed to last for generations and support combat air capabilities. Regional uncertainty following the collapse of the Assad regime in Syria made the timing of the PM’s trip to Saudi Arabia even more poignant, as the country continues to establish its ever-increasing strength as a regional security actor. It is therefore vital that the UK continues to support and invest in Saudi Arabia, to not just better UK economic growth, but to protect and expand UK interests abroad and remain relevant on the international stage.
The UK and Saudi Arabia have a strong economic foundation, with trade continuing to flourish reaching £16.9 billion in the four quarters to the end of Q2 in 2024. This includes a significant trade surplus of £9.1 billion, up from £6.6 billion in the period before. Business services lead UK exports at £5.6 billion with total UK exports to Saudi Arabia growing by 8.1% from the four quarters previous. Investors and businesses should remain confident in continued growth, following a strategic partnership agreement in May 2024 between the UK and Saudi Arabia that set out the desire to increase bilateral trade to £30 billion by 2030.
As the PM stated, now is the time to continue building and enhancing the partnership between the UK and Saudi Arabia. Based on human capital and rates of market saturation, Saudi Arabia is an ideal country for investment and partnership building by UK companies. Markets remain open and continued regulatory adaptations make market entry easier than ever before, supported by various government incentive programs. Additionally, with a growing and tech savvy population, the education sector is primed to benefit from UK investment. Greater links with UK educational institutions is desired to help develop the population into a highly skilled workforce to meet the requirements for Vision 2030.
Saudi Arabia remains the key gateway to Africa, Asia, and the wider Middle East. UK businesses looking towards international markets should carefully consider taking advantage of these geographical opportunities. Significant scaling opportunities for businesses are present in Saudi, when access to international markets is considered alongside cheap and plentiful energy resources, as well as large scale human and financial capital.
Vision 2030 has demonstrated Saudi Arabia’s capacity for rapid change in a short timeframe under strong leadership. The current trajectory of the Saudi economy with its diversification away from oil demonstrates a willingness to embrace new technologies and perspectives. This is highlighted by a report by London Venture Capital Network on growth in Saudi Arabia, which identifies the country as a regional powerhouse ready for a tech boom. The environment is rich for the demand of UK and international financial services, with an ecosystem that now boasts 1,600 startups supported by 127 VC funds and government schemes that place the country at the forefront of the region.
Saudi’s construction market remains one of the fastest growing in the world, driven by Vision 2030 with the goal to diversify and privatize the Saudi Arabian economy. Technical expertise is in high demand across energy and industrial construction to help complete Saudi’s ambitious Giga-projects. Sectors like construction and mining are all concerned with scale and growth. This is an opportunity for UK tech companies to enter the Saudi market as a force multiplier to improve supply chains, efficiency, and support logistical efforts.
It was noted by the PM while in Riyadh how Saudi Arabia was already playing a crucial role in supporting the green energy sector in the UK, a sector close to the heart of Vision 2030 goals. In 2024, non-oil activities in Saudi Arabia grew by 4.6% and this is expected to continue through 2025 as non-oil activities now account for around half of the country’s GDP. This is driven by a desire to secure a sustainable energy future while maintaining a stable economic environment. Hydrogen and cleantech remain a core interest represented with investment in UK businesses developing hydrogen-based alternatives for buses, trucks and critical components. It is hoped that a new Joint International Institute for Clean Hydrogen between the UK and KSA, backed by universities from both countries, will establish the UK’s North East’s reputation as an academic engineering powerhouse. More information on clean tech initiatives can be found in a UK government press release (cited below) which helps shed light on potential future direction for UK-Saudi collaborations.
The UK too is a valuable partner for Saudi Arabia. In terms of research, education and technological advancement the UK is second only to the United States. However, of critical importance is that the UK does not have the same restrictions on the transferring technology that the U.S. has on their companies. It is here in the UK that the Saudis might more easily find the tools they need to propel Vision 2030 to even greater heights and grow their private sector.
To support UK businesses exploring these opportunities, SBJBC is hosting several key events in 2025 which will be visible on our website www.sbjbc.org.
Sources
https://www.gov.uk/government/news/pm-meeting-with-crown-prince-of-saudi-arabia-9-december-2024
https://altaasis.sa/blog/top-5-business-sectors-in-saudi-arabia-in-2024/
https://www.pwc.com/m1/en/publications/saudi-economy-watch-2024.html
https://insight.astrolabs.com/saudi-economic-progress-second-fastest-growing-economy/
https://insight.astrolabs.com/saudi-economic-progress-second-fastest-growing-economy/
https://researchbriefings.files.parliament.uk/documents/CBP-9828/CBP-9828.pdf
