THE IMPACT OF TECHNOLOGY ON ECONOMIC GROWTH IN SAUDI ARABIA

Abstract

Abstract This study investigates the impact of technology on Saudi Arabia’s economic growth, focusing on the oil sector, manufacturing sector, and FDI. Using the Generalised Method of Moments (GMM) estimations, the research analysed secondary data from different sources for the period of 1990 to 2022. The findings of the analysis reveal that technology significantly enhances GDP per capita and manufacturing sector performance in Saudi Arabia. They also show that technology has a strong, significant, and negative impact on the Saudi Arabian oil industry’s contribution to GDP. Thirdly, technological progress is demonstrated to have a statistically negative impact on FDI. The study concludes that technology is a core component for driving Saudi Arabia’s economic transformation, and that it is one that supports the goals of Vision 2030 by reducing oil dependency and deepening the efforts towards a diversified economy. But the unexpected negative relationship between technology and FDI also means that there may be need for strategic policy adjustments. From these findings, the study recommends increasing investments in R&D and technological infrastructure, implementing policies to attract foreign investments in high-tech industries, and focusing on human capital development through education and training.