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TRANSCRIPT
Enabling Competitiveness Through Innovation
Keynote Speech
H.E. Abdullatif Al-Othman
Governor of the Saudi Arabian General Investment Authority
Kingdom of Saudi Arabia
KAUST Industry Advisory Board Annual Meeting 2015
Wednesday and Thursday, February 25th and 26th 2015
Jeddah, Saudi Arabia
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 1 | P a g e
Your excellences, ladies and gentlemen. Good morning.
It is my pleasure to welcome you to Saudi Arabia, and to KAUST for the
annual meeting of the Industry Advisory board.
I would like to thank President Jean-Lou Chameau for inviting me to
speak today.
As a Saudi, I feel very proud to be here. KAUST was the vision of our
late King – His Majesty King Abdulllah – who believed strongly in giving
Saudi Arabia every possible chance to succeed.
The impact of his legacy to ensure the Kingdom’s competitiveness
through establishing centers of discovery and knowledge like KAUST,
will be felt for generations to come.
As an executive at ARAMCO, I had the distinct pleasure of seeing KAUST
start as a vision, to later become a reality.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 2 | P a g e
I – like many others – had an opportunity to be a part of this journey as
a member of the KAUST endowment investment management
company.
I often think back to my experiences with KAUST, its history, and those
people involved in its establishment – it reminds me that to create
something truly special, it is not enough to spend large sums of money.
You must have the help of skilled individuals who are steadfast and
passionately focused on collectively achieving a goal.
I therefore must sincerely thank all of you for sharing in the dreams of
Saudi Arabia through your support of KAUST.
Your time and your contributions are providing us with the research,
facilities, and knowledge that will allow the Kingdom to become an
incubator for ideas and technology to impact all levels of our society,
and those further afield.
Ladies and Gentlemen.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 3 | P a g e
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As I prepared my remarks for today, I naturally spent a great deal of
time dwelling on the word “innovation”.
If you look in a dictionary, the definition of innovation will say it is “the
act or process of introducing a new idea, device, or method”.
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To individuals, businesses and communities however, this word can
represent so much more.
Innovation precedes progress for our societies as we seize upon the
new opportunities it presents;
Innovation stimulates our imaginations and motivates us to seek the
next stage of development;
And innovation gives us a new state of mind to work from – a fresh
start in which creativity, and will power can make anything possible.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 4 | P a g e
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Technological advancements and innovative strategies have opened up
a wide array of new business opportunities to explore.
This is particularly true in emerging markets, where over 2 billion new
middle class customers will seek ways to make their consumption and
use of resources and products cheaper, sustainable, cleaner, and more
efficient.
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Naturally, as global opportunity has increased, so too has competition.
In the race for resources, market share, and capital, governments and
businesses must seek and discover new strategies to maintain their
competitive edge.
Innovation has now become a precondition for success.
We are left with a choice: sink or swim.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 5 | P a g e
Ladies and gentlemen.
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Innovation is part and parcel to Saudi Arabia’s diversification strategy.
In the past decade, Saudi has undergone a great deal of development
to ensure it is a leading destination in the Middle East for investment.
We introduced foreign investment law, which became one of the most
competitive laws in the Middle East.
Significant reforms have taken place to simplify regulations and protect
investors.
They have also introduced incentives that provide investors with
unique opportunities unmatched by any other country:
We are the only country that allows 100% foreign ownership of
businesses across many sectors;
We allow free movement of capital within the Kingdom;
Businesses in Saudi Arabia enjoy a very competitive tax rate
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 6 | P a g e
Businesses have access to government financing, industry and
land
And energy and feedstock come at competitive prices
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I am proud to say that much has been done to lay the foundation for
diversification, but this is no cause for complacency:
There are still many reasons why we must accelerate this process.
First, the Kingdom is still heavily dependent on oil. The
government receives approximately 90% of its annual revenue
from oil exports, and oil accounts for 55% of our GDP.
Second, Saudi Arabia has one of the youngest populations in
the world. Over 50% of Saudis are below the age of 25. Our
youth are looking for quality jobs to fulfill their career
aspirations and we want to give them the best possible chance
to do so.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 7 | P a g e
And finally, we enjoy many comparative and competitive
advantages for broad diversification across the Saudi economy,
but we need businesses that can add to the knowledge base of
the Kingdom, therefore adding value that will drive economy
growth.
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As you can see, we have much to gain and look forward to as the focus
of our economy shifts away from oil.
But we also have much to give:
The Saudi economy and investments within the Kingdom alike
have room for sustained growth as many sectors have not yet
reached saturation
Saudi Arabia enjoys the status of being a logistics hub with a
premium location in the world for doing business. Over one-
third of the world’s population currently live within a 6 hour
flight of Riyadh.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 8 | P a g e
Our regulations are very favorable to foreign investors.
And our Government is very committed to its diversification
mission through word and deed.
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The Saudi economy is considered to be one of the largest in the world.
At $745 billion, Saudi Arabia’s ranks 19th in the world and 1st in the
Middle East and North Africa region in GDP, tripling during the past 10
years.
Inflation is low, and the currency is stable at a fixed exchange rate to
the U.S. dollar.
The Kingdom has a large foreign reserve position;
Government debt is only 4% of GDP;
And our banks are well capitalized, managed, and regulated.
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H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 9 | P a g e
The strength of the human capital in the Kingdom is one of its greatest
assets.
Saudi Arabia’s 29 million population is one of the youngest in the world
– This represents huge economic potential.
Around 10% of the GDP in Saudi Arabia is spent on educating the
public, making us one of the top ranking countries in the world for
education spending.
The campus we are standing on embodies the Kingdom’s commitment
to innovation through learning.
Students are equipped with the practical skills to make advancements
in their fields of study.
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But of equal importance, KAUST seeks to inspire its students to make
new discoveries and take the steps towards the future through their
work.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 10 | P a g e
You will not only find this philosophy at KAUST – Government reforms
launched in 2007 are changing the way Saudi students learn across the
country through encouraging the development of flexible, analytical,
and forward thinking minds.
Ladies and gentlemen.
Over the past 18 months, we at SAGIA have dedicated ourselves to
creating a world class business environment by initiating a new phase
of investment by unlocking the full potential of Saudi Arabia.
In doing so, we are delivering a win-win environment for both
investors and the Kingdom.
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From the beginning, our new strategic direction in foreign investments
sought to involve businessmen such as yourselves as much as possible.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 11 | P a g e
Last year, we conducted the most comprehensive study of Saudi
Arabia’s investment climate we have ever undertaken, examining both
domestic and international perspectives.
Armed with the insights from investors, we moved quickly to address
their wishes.
We have now:
Brought together relevant government departments to break
down barriers identified by investors
Clarified requirements for investors and increased transparency –
all requirements for an investment license are now in a single,
clear document
And introduced a fast track service, where new investment
licenses are awarded within just a few days.
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H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 12 | P a g e
As a result, Saudi Arabia has significantly advanced its position in the
Global Competitiveness and Doing Business Index rankings.
The Kingdom is extremely determined to use this investment
environment to targeting in key sectors for growth such as technology.
For this, we are unlocking the Kingdom’s potential through identifying
and developing sector-specific investment plans and opportunities in
coordination with all areas of government.
The strategy aims to:
Integrate investments in the energy and utilities sections, and
capture value added chemical industries
From healthcare, ICT, transport and mining
Transform the services sectors, including tourism, financial
services, professional consulting and real estate.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 13 | P a g e
Already, within our UNIFIED INVESTMENT PLAN, we have identified
investment valued at $140bn of government spending in the healthcare
and transport sectors.
[REVERT TO UIP SLIDESHOW]
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These opportunities will ultimately be compiled in a central database
which investors can access via an app.
We will also introduce a new match making service to directly connect
specific opportunities with individual investors, based on their profiles.
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Despite all of our efforts to date, we still feel they are not enough.
In Saudi Arabia, we like to dream big.
We want to become a regional leader and internationally recognized
hub for R&D, and innovation.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 14 | P a g e
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We are much more than dreamers however; we’re committed to
making our dreams a reality.
We recognize that this is a process, but we have already taken concrete
steps to support those that are creating the cutting edge technologies
and methods of tomorrow that will benefit businesses and the Saudi
economy alike for years to come.
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Similar to many sectors, in R&D and innovation we are building pockets
of competitiveness to develop the right type of environment to push
Saudi Arabia towards its goal.
As many of you know, KAUST serves as one of these locations where
cutting edge research, frequent knowledge transfers, and technological
developments take place.
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H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 15 | P a g e
Elsewhere in the Kingdom, the King Abdulaziz City for Science and
Technology is establishing 80 incubators for scientific and technological
innovation to be completed by 2025.
This project will create over 20,000 jobs.
These incubators will work hand-in-hand with our Technology
Innovation Centers to promote university-industry research
collaboration, and technology and knowledge transfer inside the
Kingdom.
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Within these innovation centers, companies of all sizes are welcome.
Saudi Arabia has taken special care to address the needs of SMEs,
focusing particularly on access to finance and industrial support.
The Saudi Industrial Development Fund grants medium and long term
loan guarantees for private sector projects, as well as administrative,
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 16 | P a g e
financial, technical, and marketing consultancy services to help develop
promising smaller ventures within the Kingdom.
We are particularly excited about the potential for the creation of new
businesses inside Saudi Arabia in the new opportunities found through
innovation.
They will have access to the same support enjoyed by more mature
smaller enterprises.
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Once you have established yourself in Saudi Arabia, rest assured your
intellectual property will be protected.
Part of our commitment to creating a world class business environment
is giving investors a high level of confidence in our ability to issue strong
patents in a timely manner, and enforce them to the full extent of the
law.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 17 | P a g e
The length of patent ownership has been extended from 15 years to 20
years, and we have reformed all patent statues to comply with
international norms.
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Ladies and Gentlemen.
The Kingdom has shifted gears.
As the world changes, we are taking steps to place ourselves at the
center of this change.
Not only is the Kingdom making it easier for companies to invest in
Saudi Arabia, but through our focus on innovation, we are creating the
exciting business opportunities of tomorrow to invest in.
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Your support of KAUST has already shown your willingness to engage
with us.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 18 | P a g e
Saudi Arabia is equally committed to you – I assure you that our door is
always open to discuss how to build upon the success we have already
created.
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Thank you for being a part of this transformational journey.
I hope you will continue to walk with us as our partners, and as our
friends.
H.E A AL-OTHMAN KAUSTADVISORYBOARD KEYNOTE 19 | P a g e