Stakeholders in both Saudi Arabia and the United Kingdom are toying with the idea of a UK-Saudi tech hub that will look to mobilise sources of capital and advice to facilitate the private sector growth and the development of SMEs in the kingdom.
At a recent UK-Saudi Smart Cities and Technology Forum held in London earlier this month, Saudi and British public and private sector delegates concurred that a prime opportunity exists for a joint collaboration in the tech arena between both countries through the Saudi-British Joint Business Council (SBJBC) and other key stakeholders.
In 2018, London was home to more than 70 incubators and accelerators, 205,000 startups and in excess of 156 co-working spaces. Last year, London-based tech companies attracted $9.7 billion (Dh34.9bn) in funding – more than any other European city, according to a Dealroom.co report for the city's inward investment agency, London & Partners.
Meanwhile, 4,000 miles southeast, Saudi Arabia’s nascent startup ecosystem is being strongly endorsed by the kingdom’s Vision 2030 and the National Transformation Program (NTP).
Fintech innovation, startups and a knowledge-based economy are playing a key role in Crown Prince Mohammed Bin Salman’s vision to transform the Saudi economy away from its traditional oil-based structure and re-balance it into a more technology-driven, modern global superpower.
In this context, the time is right for a UK-Saudi tech-led collaboration that will leverage on the former’s undisputed success in a wide range of areas spanning from financial services (fintech, regtech and insurtech) to the creative industries (fashiontech and createch).
The creation of a UK-Saudi tech hub will signal the UK’s commitment to support Saudi Arabia’s Vision 2030 implementation as a strategic partner. Meanwhile, Saudi Arabia faces a unique opportunity to support its emerging startup scene by becoming a leading partner to some of the UK’s most successful startup institutions and by adopting a homegrown version of some of Britain’s most effective initiatives. A UK-Saudi tech hub would provide an appropriate umbrella organisation for a joint collaboration between the two countries’ private and public sector participants by helping grow the Saudi local economy and connecting its startups to global markets.
The UK is home to some of the world’s most renown startup incubators and accelerators such as Level39. It is also a pioneer in government-backed initiatives that have proven to be a huge game-changer for both entrepreneurs and investors in small, early-stage companies.
A UK-Saudi Tech Hub would therefore play a two-fold role in providing soft landing support for tech entrepreneurs in both countries: first by connecting Saudi and UK startups with investors across global markets to raise funds and drive their success, and second, by providing a platform for knowledge sharing.
Such a hub, in partnership with renowned start-up institutions such as Level39, would create an ecosystem helping startups in both countries grow internationally. It would do so by running programmes for businesses, partners and universities to help teams build solutions and grow their business. Also, it would provide a deal flow platform to match investors in one country with tech sector opportunities in the other country and vice versa. By connecting industry, talent and investment, it would provide introductions to potential partners and investors, thus increasing deal flow and joint venture opportunities between both countries.
A UK-Saudi tech hub would also promote knowledge exchange and a forum to define challenges and validate solutions. It would do so by assessing initiatives that have proven successful in the UK and promote the adoption of such initiatives adapted to the Saudi market. Key among such initiatives is the role that regulation has played in promoting UK entrepreneurship and establishing the UK as a global entrepreneurial hub. The UK ecosystem has largely benefitted from support by the UK’s financial services and markets regulator, the FCA. Saudi entrepreneurship requires a robust regulatory framework and a look at measures that have worked in the UK, such as the FCA’s Project Innovate designed to aid innovative businesses in fintech and regtech, is a good starting point.
Similarly, the UK Seed Enterprise Investment Scheme (SEIS) has been a successful government policy to encourage investors fund small and early stage start-up businesses in the UK by offering those investors tax-efficient benefits. Undoubtedly, a well-designed tax benefit scheme similar to the SEIS for would-be investors targeted to boost growth in specific sectors (fintech, regtech, medtech, insurtech) would be a good starting point in Saudi Arabia.
A collaboration between the UK and Saudi Arabia must be built around four pillars: deal flow, an accelerator hub, partnerships and research. Such a hub backed by stakeholders in both countries may address these by sponsoring the creation of a bilateral accelerator programme, with each location focused on a specific theme - start-up vs scale-up, for instance – and by building a global partnership ecosystem including private sector partnerships, academic institutions, incubators, successful entrepreneurs, public partnerships and key angel investors.
Roxana Mohammadian-Molina is chief strategy officer and board member at London-based FinTech company Blend Network