Transition to knowledge-based economy in Saudi Arabia

This paper discusses the progress in transition to knowledge-based economy in Saudi Arabia. As for the methodology, this paper uses updated secondary data obtained from different sources. It uses both descriptive and comparative approaches and uses the OECD definition of knowledge-based economy and the World Bank Knowledge Index (KI) and Knowledge Economy Index (KEI) and other indicators often used in the international literature to examine progress in transition to a knowledge-based economy in Saudi Arabia. This paper is valuable because it adds to the existing studies in the regional and international literature and it fills the gap in Saudi Arabia literature by presenting a more comprehensive analysis and investigating recent progress in transition to knowledge-based economy in Saudi Arabia. Moreover, the results confirm the importance of supporting the efforts aimed at enhancing knowledge- based economy in Saudi Arabia. Our findings imply that over the period (2000-2012) Saudi Arabia has achieved significant improvement, rapid and fastest progress not only by regional standard but also by international standard, in the international rank Saudi Arabia has climbed 26 places compared to 2000, obtaining 50th place in 2012 ranking, compared to 76th place in 2000 ranking. Our findings support the hypothesis concerning some progress in transition towards knowledge-based economy in Saudi Arabia. The progress appears from improvement in terms of KI, KEI, ICT pillar, education pillar, economic incentive and institutional regime pillar, innovation efficiency index, knowledge creation index, knowledge impact index, knowledge diffusion index and technological infrastructure, despite deterioration in both innovation pillar and knowledge absorption index. Based on the findings the paper recommends that to improve transition to knowledge economy and achieve sustainable economic development, it is essential for Saudi Arabia to strengthen and improve knowledge by investing heavily in education, training, boosting knowledge absorption index and innovation through intensive spending on R&D.

Keywords: Knowledge, Knowledge-based economy, Knowledge Index, Saudi Arabia.

JEL Classification: O10, O11, O30