JAKARTA – As developing nations race to build robust digital economies, Saudi Arabia’s experience demonstrates that effective regulations—not just infrastructure investment—are the critical ingredient for transforming digital ambitions into reality.

Investment Requires Regulatory Framework to Succeed

Between 2021 and 2023, the digital sector attracted an average of 8.3% of global foreign direct investment (FDI), up from 5.5% a decade earlier. However, converting this capital influx into genuine digital inclusion and economic growth demands more than financial backing—it requires comprehensive regulatory frameworks.

According to Amir Algibreen, Group Chief Regulatory & Compliance Officer at stc, robust regulation serves as an essential tool for bridging the digital divide and enabling infrastructure investment. Fair access, competitive markets, and sustained capital deployment all depend on strong regulatory foundations established at governmental levels.

The Importance of Digital Economy Governance

For the digital economy with its accompanying risks and opportunities, effective regulation becomes particularly crucial. OECD guidelines emphasize transparent connectivity mapping, simplified permitting procedures, infrastructure sharing arrangements, and spectrum allocation policies that include rural coverage requirements. Supporting measures like performance-driven public funding, digital literacy programs, and targeted assistance for low-income users and small enterprises are equally vital for advancing digital inclusion.

Saudi Arabia’s Digital Transformation Success

The Saudi digital economy now generates SAR 495 billion ($131 billion), representing approximately 15% of the nation’s GDP. Vision 2030 targets an additional SAR 50 billion ($13 billion) expansion by 2030.

The Kingdom’s regulatory evolution has been pivotal to this achievement. Through coordinated policy reforms and inter-governmental initiatives, Saudi Arabia is connecting infrastructure investment with inclusive growth, innovation, and cross-industry competitiveness.

Strategic Spectrum Management

A prime example is the Communications, Space & Technology Commission’s (CST) National Frequency Spectrum Strategy 2020-2025, which seeks to expand efficient radio spectrum utilization to support innovation, emerging wireless technologies, and national security. The strategy emphasizes enabling digital expansion through optimized spectrum management while encouraging investment and supporting new applications including 5G and Internet of Things technologies.

CST collaborated with operators and stakeholders through transparent consultations to develop clear frameworks for spectrum sharing and infrastructure co-location, accelerating coverage expansion to rural regions. Predictable rules and transparent licensing have provided investors the certainty needed to drive private-sector growth within the Kingdom’s digital economy.

Comprehensive Approach to Digital Access

Saudi Arabia’s strategy tackles both supply and demand challenges. Universal service programs have funded connectivity projects in remote locations, while national digital strategies improve inter-agency coordination to eliminate duplication and expedite results.

The outcome is a nationwide median mobile internet speed of 129 Mbps—the fourth highest among G20 countries.

Recent regulatory initiatives have strengthened market confidence and created new space for innovation in fintech, cloud services, and digital trade sectors.

Collaboration with domestic companies like stc group has significantly accelerated this transformation, fast-tracking 5G deployment and digital adoption to support technological advancement.

Building Digital Capacity

Saudi Arabia has also invested in digital skills and literacy programs, including the Future Skills Program and Digital Entrepreneurship Center, which help bridge socioeconomic and gender gaps in digital access. These initiatives complement regulatory reforms by ensuring citizens and small-to-medium enterprises can effectively utilize new technologies and benefit from digital services. Both programs partner with private sector entities and international organizations to strengthen capabilities in cloud technology, software development, and cybersecurity, ensuring broader connectivity translates into concrete economic participation.

Ongoing Challenges

Despite substantial progress, obstacles remain. Overlapping responsibilities across telecommunications, content, privacy, and cybersecurity domains can create fragmented oversight and inefficiency. Connectivity gaps persist in rural and remote regions, while outdated over-the-top (OTT) frameworks may stifle innovation. Inflexible spectrum policies and evolving tax structures could also discourage investment.

Without resolution, these issues risk slowing the Kingdom’s digital momentum. Simultaneously, these challenges present opportunities for innovative policy solutions and enhanced cross-sector collaboration, helping regulators align more effectively and respond more rapidly to change.

Four Lessons for Global Digital Development

The Kingdom’s experience provides valuable insights for other nations pursuing digital inclusion. While each country faces unique challenges and opportunities, Saudi Arabia’s journey offers four concrete policy recommendations:

1. Create unified digital governance structures to prevent overlapping mandates and enhance policy coherence.

2. Prioritize public-private partnerships for rural connectivity deployment, including shared infrastructure and spectrum-leasing arrangements.

3. Integrate digital literacy and skills training into national strategies so citizens can fully engage in the digital economy.

4. Align incentives and tax policies to reward connectivity and innovation investments.

Practical Implementation Steps

Countries seeking similar progress can develop transparent connectivity maps to identify service gaps, establish streamlined permitting systems to accelerate infrastructure deployment, and design performance-based incentives that extend services to remote areas. Incorporating digital skills into national education curricula and small-business programs can further enhance adoption and impact.

Looking Forward

Saudi Arabia’s next phase involves modernizing and harmonizing regulatory frameworks to ensure a cohesive, adaptive, and inclusive approach. By linking policy implementation to measurable outcomes and sharing insights through international cooperation platforms, Saudi Arabia is advancing a digital economy that now contributes to shaping global standards for inclusive digital development.

Through embracing reforms, the Kingdom has cultivated fair competition, sustained private-sector investment, and ensured digital transformation benefits reach all citizens and businesses—a model others can emulate.

Original Article:

World Economic Forum. (2025, November 23). Regulations are what build a digital economy. Saudi Arabia proves why. Retrieved from https://www.weforum.org/stories/2025/11/saudi-arabia-regulation-build-digital-economy/