Saudi Finance Minister Mohammed Al-Jadaan affirmed that well-established venture capital systems in developed economies have proven effective as a vital tool for enabling these countries to overcome complex economic challenges, something emerging markets lacking such mechanisms may struggle to do. His remarks came during a panel discussion at the Al-Ula Emerging Markets Economies Conference, where he highlighted the fundamental differences in economic resilience between countries.
Al-Jadaan explained that many of the challenges facing emerging markets today, such as slowing growth and the need to diversify income sources, are the same ones that advanced economies experienced in previous stages. However, the difference lies in the latter's ability to build strong financial and investment systems, foremost among them the venture capital sector, which has successfully provided the necessary funding for innovation and high-growth startups, thus creating new economic engines and enhancing their resilience.
General context: Vision 2030 and support for venture capital investment
These statements come within the framework of Saudi Arabia's ongoing efforts, under Vision 2030, to develop an attractive investment environment and transform its economy from one dependent on oil to a diversified and sustainable knowledge-based and innovation-driven economy. Venture capital is a key pillar of this strategy, funding emerging technology companies with the potential to revolutionize various sectors such as fintech, e-commerce, and artificial intelligence.
To achieve this, the Kingdom launched strategic initiatives, most notably the establishment of the Saudi Venture Capital Company (SVC) in 2018, which aims to stimulate the growth of this sector by investing in funds and providing financing to startups, which has contributed to making the Kingdom one of the fastest growing venture capital markets in the Middle East and North Africa region.
The importance and expected impact of venture capital
Domestically, the focus on venture capital contributes to creating quality jobs for Saudi youth, encouraging entrepreneurship, and localizing advanced technologies. It also enhances the competitiveness of the Saudi economy on the global stage and attracts foreign capital and talent. Al-Jadaan noted that building a robust financial foundation is not limited to the general budget and government spending, but extends to empowering the private sector to be a key partner in development, which supports achieving long-term financial sustainability.
Regionally and internationally, the success of the Saudi experience in building a robust venture capital ecosystem offers an inspiring model for other emerging markets seeking to diversify their economies. This approach also reinforces the Kingdom's position as a leading financial and technological hub in the region and opens new horizons for international economic cooperation, enabling Saudi startups to become influential players in global markets.
