How Saudi Arabia Is Turning Cybersecurity into Economic Engine

Growing recognition of cybersecurity as a vital economic driver has pushed the sector’s expansion in the Kingdom beyond the usual confines of national security, making it foster innovation, encourage investment, and create job opportunities

The cybersecurity sector in Saudi Arabia is witnessing substantial growth. Now, that would be just an ordinary headline to make the stakeholders in the Kingdom’s national security business happy, but it’s only part of the story. A more curious development is that Saudi Arabia wants to apply its trademark golden touch to its security assets as well, and it’s cybersecurity’s turn this time.

According to the “Report on Key Economic Indicators in the Cybersecurity Sector 2024,” Saudi Arabia’s cybersecurity market is currently valued at 13.3 billion Saudi Riyals. In the rapidly changing economic landscape of the Gulf monarchy, this growth is driven by a diverse range of cybersecurity products, solutions, and services that cater to both the public and private sectors. The private sector, which includes entities managing critical national infrastructures, dominates the market, accounting for 69% of total spending. This significant investment highlights the importance of robust cybersecurity measures in safeguarding national interests and supporting economic stability.

The report, developed in collaboration with the National Cybersecurity Authority (NCA), Boston Consulting Group (BCG), and the International Data Corporation (IDC), outlines a market segmented into three main categories: cybersecurity products, solutions, and services. Products and solutions make up the majority at 56% of the market, valued at 7.5 billion Saudi Riyals, while services account for the remaining 44%, valued at 5.8 billion Saudi Riyals.

The private sector, which includes entities managing critical national infrastructures, dominates the market, accounting for 69% of total spending

Cybersecurity’s growing contribution to the Saudi GDP

The cybersecurity sector’s contribution to Saudi Arabia’s Gross Domestic Product (GDP) underscores its economic significance. In 2024, the sector’s total contribution is estimated at 15.6 billion Saudi Riyals, which represents 0.39% of the overall GDP and 0.81% of the non-oil GDP. This figure includes both direct contributions, amounting to 8.6 billion Saudi Riyals, and indirect and induced contributions, which total 7 billion Saudi Riyals​.

Geographically, the demand for cybersecurity services in Saudi Arabia is highly concentrated in three regions: Riyadh, Makkah, and the Eastern Region. These areas account for 83% of the total demand, with Riyadh alone hosting 72% of the cybersecurity providers. This concentration is not just a reflection of the Kingdom’s economic hubs but also indicates the strategic importance of these regions in terms of cybersecurity needs and capabilities​.

The supply side mirrors this distribution, with the majority of cybersecurity providers also based in Riyadh. The report identifies a total of 353 registered cybersecurity providers, categorized into large, medium, small, and micro entities. Notably, small providers constitute the majority at 77%, while large providers make up just 3%. This distribution suggests a dynamic market landscape with significant opportunities for small and medium enterprises (SMEs) to play a critical role in the sector​.

Riyadh alone is hosting 72% of the cybersecurity providers

A diverse and growing workforce: the hidden advantage?

The cybersecurity workforce in Saudi Arabia is another critical component driving the sector’s growth. The report highlights that approximately 19.6 thousand specialists are currently employed in the sector, with women comprising 32% of the workforce. This level of gender diversity is notable and reflects broader national efforts to promote inclusivity and diversity across various sectors of the economy​.

The inclusion of women in the cybersecurity workforce is a strategic advantage for the Kingdom, helping to foster a more inclusive work environment and encouraging different perspectives in tackling cybersecurity challenges. The continued development of a skilled workforce is essential for sustaining the sector’s growth and enhancing Saudi Arabia’s overall cybersecurity posture.

The centralization-decentralization balancing act

To achieve all of this, Saudi Arabia’s approach to cybersecurity needs to be comprehensive, encompassing legislative, economic, and security dimensions. The report highlights the Kingdom’s strategy of decentralizing operational responsibilities to national entities while centralizing governance and assessment at the national level. This model aims to enhance the Kingdom’s cybersecurity readiness, safeguard critical infrastructures, and promote resilience against cyber threats.

The sector’s growth is further bolstered by strategic collaborations and investments in technology and innovation. The NCA’s role in stimulating the cybersecurity market, encouraging innovation, and supporting technology transfer is crucial for developing a robust cybersecurity ecosystem. These efforts are designed to attract both local and international investments, fostering a vibrant cybersecurity market that can respond to evolving threats and challenges​.

The Kingdom’s strategy relies on decentralizing operational responsibilities to regional entities while centralizing governance and assessment at the national level

From obstacles to openings

Despite the positive growth trajectory, the cybersecurity sector in Saudi Arabia faces several challenges. The concentration of demand and supply in specific regions could lead to disparities in access to cybersecurity services across the Kingdom. Additionally, the reliance on a few large entities for the majority of spending may pose risks if these entities face disruptions or changes in their cybersecurity strategies​.

However, these challenges also present opportunities. The growing awareness of cybersecurity’s importance at all levels of government and private sector entities is a positive sign. There is significant potential for expanding services to underrepresented regions and sectors, thereby enhancing the overall security posture of the Kingdom.

Moreover, the emphasis on developing a skilled and diverse workforce will continue to be a critical factor in sustaining the sector’s growth. As more women and young professionals enter the field, the cybersecurity sector in Saudi Arabia is likely to see innovative approaches and solutions that can address the complex and evolving landscape of cyber threats.

Digital future aligned with economic goals

The cybersecurity sector in Saudi Arabia is at a pivotal point, characterized by robust growth, strategic importance, and significant economic impact. The insights from the “Report on Key Economic Indicators in the Cybersecurity Sector 2024” underscore the sector’s role as a cornerstone of Saudi Arabia’s economic and security frameworks. As the Kingdom continues to invest in cybersecurity, it will be crucial to maintain a balanced approach that fosters innovation, inclusivity, and resilience. With the right strategies in place, Saudi Arabia is now well-positioned to take the lead in the global cybersecurity arena, safeguarding its digital future while contributing to its broader economic goals.