Saudi Arabia is undergoing a truly remarkable transformation, unlike anything seen globally.
Dr Dalia Samra-Rothe in interview with Pharma Boardroom in February 2024 about the developments and key milestones in the healthcare sector in Saudi Arabia. Please find an extract of this interview here.
Dalia Samra-Rothe – Delegate, German-Saudi Arabian Liaison Office for Economic Affairs highlights the role of GESALO in facilitating German companies' entry into the Saudi market, the significant economic transformation and opportunities in Saudi Arabia, and the importance of cultural awareness and preparedness when doing business in the country.
Can you provide a brief overview of the current market dynamics and economic opportunities in Saudi Arabia?
I feel incredibly fortunate to be operating within the Saudi market at this juncture. It’s undergoing a truly remarkable transformation, unlike anything seen globally. As the fastest-growing economy within the G20, Saudi Arabia presents a plethora of opportunities for companies, particularly those from Germany. Over the past one to two years, there’s been a noticeable surge in interest from German companies, recognizing the immense potential of this market. When I first arrived four and a half years ago, the transformation had already begun, albeit in its early stages. However, the landscape has since evolved significantly. For instance, I was among the first female delegates sent to Saudi Arabia, witnessing a shift in attitudes, particularly towards female entrepreneurs and business representatives. Saudi Arabia’s commitment to increasing female participation, with a target of 30% by 2030, is already exceeding expectations, reaching 33% by 2023.
This progress has not gone unnoticed, particularly in Germany, where perceptions about doing business in Saudi Arabia are changing positively. Across various sectors, including healthcare, Saudi Arabia is undergoing one of the most extensive transformations globally, offering ample opportunities for German companies to establish themselves. Having witnessed the transition firsthand over the past four and a half years, it’s evident that what once existed primarily on paper in terms of mega projects and developments is now materializing into tangible progress. This shift has instilled a sense of optimism and confidence in the market’s trajectory, with projects being initiated and reaching fruition, contributing to a more positive outlook on Saudi Arabia’s development. Overall, there’s a palpable sense of enthusiasm, with the market’s growth poised to benefit not only Saudi Arabia but also its international partners, including Germany.
Key milestones and advancements across industries in the past four years, particularly in healthcare
Could you provide insight into the role of German investments within Saudi Arabia’s transformative journey?
The role of German investments within Saudi Arabia’s transformation is evolving significantly, particularly in key sectors like energy and healthcare. While German presence in the country is notable, the overarching strategy of many German companies, particularly SMEs, tends to prioritize exports before considering substantial investments. However, in line with Saudi Arabia’s economic framework, which emphasizes local value chain establishment and localization, German companies are gradually realizing the importance of committing to these requirements to sustain their participation in the market’s growth. This realization is leading to a gradual but notable shift towards investment and value chain expansion by German entities already established in the region.
One significant factor driving this shift is the array of opportunities emerging across various sectors, particularly those previously untapped. For instance, we’re witnessing significant progress in sectors such as tourism, with a focus on sustainable hotel concepts, and entertainment, where demand for infrastructure and services is burgeoning. The emphasis on sustainability, epitomized by initiatives like the circular carbon economy, further underscores the alignment of German expertise with Saudi Arabia’s developmental goals.
Moreover, the burgeoning automotive industry, fueled by Saudi Arabia’s ambition to produce 1 million electric vehicles by 2030, presents a lucrative avenue for collaboration between Saudi Arabia and German automotive suppliers. This newfound interest in the market signifies a shift in perception, with companies recognizing the potential for value chain integration and localized production.
In the healthcare sector, Saudi Arabia’s ambitious healthcare transformation offers a wealth of opportunities for German companies. From large global players excelling in healthcare equipment to niche innovators seeking partnership opportunities, the landscape is ripe for collaboration. Initiatives such as the privatization of hospitals and the introduction of accountable care organizations highlight efforts to enhance healthcare efficiency and innovation, presenting avenues for German expertise to contribute significantly.
Furthermore, Saudi Arabia’s receptiveness to innovation in healthcare is evident, with initiatives such as the establishment of the first digital hospital in the country featuring German technology. Additionally, investments in biotechnology, exemplified by the Public Investment Fund’s support for German biotech companies, underscore Saudi Arabia’s commitment to fostering an innovative and conducive business environment in the healthcare sector.
Overall, German investments are poised to play a pivotal role in Saudi Arabia’s ongoing transformation journey, contributing expertise, innovation, and value creation across key sectors, thereby fostering mutually beneficial partnerships and propelling both nations towards their respective economic objectives.
Could you elaborate on the incentives and frameworks put in place by the Saudi government to attract investment and foster development in the healthcare sector?
The Saudi government has been proactive in catalyzing growth and innovation within the healthcare sector, implementing a range of incentives and frameworks to attract investment and support industry development. One notable initiative is the promotion of startup ecosystems through events like the prominent trade fair LEAP from the 4th to the 6th of March, which provides a platform for startups, including those specializing in areas such as holistic medicine and artificial intelligence, to showcase their innovations and forge partnerships. Additionally, the government facilitates partnerships between startups and local players, offering an attractive framework for collaboration and investment.
Moreover, the government’s emphasis on emerging technologies like artificial intelligence has created opportunities for partnerships and investment in healthcare innovation. This proactive approach not only fosters economic growth but also positions Saudi Arabia as a hub for cutting-edge healthcare solutions. The receptiveness of Saudi partners to innovative concepts further enhances the appeal for international companies seeking to invest and develop within the Saudi market.
The Saudi government’s commitment to fostering a conducive environment for healthcare innovation is evident through initiatives aimed at facilitating partnerships, providing incentives, and promoting collaboration between local and international stakeholders. These efforts not only benefit the healthcare sector but also contribute to Saudi Arabia’s broader economic diversification and development objectives.
The interview in full length can be read on Pharma Boardroom, dating Feb 22, 2024.