Overview of the National Industrial Development and Logistics Program: Industry 4.0
In our efforts to keep members informed on the progression of the Saudi Vision 2030, a social, cultural, and economic transformation plan that reflects the strengths, capabilities, and ambitions of the Kingdom, we are publishing summaries of the sections of the “Delivery Plan for the National Industrial Development and Logistics Program (NIDLP)”.
The NIDLP aims to transform Saudi Arabia into a leading industrial powerhouse and a global logistics hub in promising growth sectors (with focus on Industry 4.0), which would generate ample job opportunities, enhance the Kingdom’s trade balance, and maximize local content.
The program focuses on four key sectors: Industry, Mining, Energy, and Logistics, as well as enablers including the development of Policies and Regulations, Financial Enablement, Infrastructure, Industrial Lands, Special Economic Zones, Research, Development and Innovation.
Section 4.A.7: Industry 4.0
Industry 4.0 encompasses current trends in automation and data exchange in manufacturing technologies which includes cyber-physical systems, the Internet of Things, cloud computing and cognitive computing. These developments aim to help improve the competitiveness of existing sectors by lowering costs while also increasing productivity and safety. In addition, they are also providing the competitive edge needed to empower new sectors as well as establishing an environment supportive of the technologies built on Industry 4.0 platforms.
Given the Kingdom’s ambitions, the development of its Industry 4.0 strategy is centered on increasing the competitive advantage of existing value chains as well as developing systems which would allow these technologies to achieve the following:
- Increase the competitive advantage in existing industries within the sectors of the NIDLP
- Expand existing value chains and developing new ones
- Mitigate the impact of major reforms in energy, natural gas and workforce development
- Develop the environmental system for Industry 4.0 technologies
- Create new high-skill jobs that attract the national labor force
However, the adoption of Industry 4.0 technologies faces some challenges:
- Lack of interest on the part of major industrial companies stemming from either a lack of awareness with respect to the existence of such technologies or reservations with regards to its effectiveness.
- Lack of funding encountered by some firms to upgrade their production equipment, especially considering that equipment at the levels needed for Industry 4.0 are more expensive than conventional counterparts. There are also concerns related to human capital as qualified workers are needed to properly utilize these technologies.
- The strength of the Kingdom’s communication structure and the information security infrastructure needed to utilize these technologies reliably and with enough protections.
Industry 4.0 goals can be achieved via two groups of initiatives. The first group is to build a set of foundational elements to establish the work system. The second is to establish capacity-building centers that encourage adopting Industry 4.0 technologies, and the national productivity programs. The second set of initiatives aims to support the private industrial sector in order to speed up productivity. Elements that make up these initiatives are:
- Education: Expand and enhance curricula and programs related to Industry 4.0 technologies.
- Workforce development and retraining of the existing labor force.
- Awareness: Establish forums and promotional campaigns to encourage adoption of Industry 4.0 technologies.
- Institutional Accreditation: Set standards of compliance and grant certificates related to industrial requirements.
- Legal Framework: Develop the legal frameworks to govern these technologies.
- Communication Infrastructure: secure adequate network coverage across the Kingdom in addition to local cloud computing services
- Cybersecurity: implement security policies and measures to protect users of this technology.
- Financial Incentives: Establish a short-term fund to finance productivity programs aimed at facilitating the adoption of these technologies at 100 factories
- National Productivity Programs: Select ideal factories related to high priority industrial sectors.
- Environmental system-attracting companies: Offer incentives like tax exemptions, investment support, low-priced lands, etc.
- Environmental system-equity financing: Support local entrepreneurs through a venture capital fund meant for direct investment in local companies
- Environmental system-supporting innovation, research and development: Establish financial grants for local developers of fourth generation technologies as well as a program for purchasing foundational technologies from international sources and offering them to local developers.
- Environmental system-capacity-building centers: Establish centers dedicated to the promotion and development of these technologies and their adoption in the Kingdom.
Institutions that are driving the development of the Industry 4.0 ecosystem include:
- King Abdulaziz City for Science and Technology
- Saudi Industrial Development Fund
- Saudi Authority for Industrial Cities and Technology Zones (Modon)
- National Industrial Clusters Development Program
- Ministry of Energy, Industry and Mineral Resources
- MEIM – Industrial Affairs Agency
- Ministry of Communications and Information Technology
- Saudi Standards, Metrology and Quality Organization
- Ministry of Education
These Institutions are currently driving thirteen initiatives. Examples include KACST’s establishment of a fourth-generation manufacturing center comprised of digital manufacturing tools, digital reverse engineering tools, augmented reality tools, advanced casting tools, and 3-D printing tools. In addition to these tools, the center has an advanced computer program for product lifecycle management services. The Ministry of Energy is also in the midst of developing an industrial strategy aimed at improving the productivity of factories while also focusing on the adoption of 4th generation manufacturing technologies.
To take advantage of business and investment opportunities in this sector, join the Innovation and Localization Mission to Saudi Arabia, Oct 26-31. The mission will facilitate participation at the Future Investment Initiative (FII), hosted by the Public Investment Fund in Riyadh on Oct 29-31. Themed “What is the next for global business?”, the FII will include in-depth conversations about the next global investment opportunities, analysis of industry trends, and networking with an influential community of top global leaders, investors, experts, and innovators. Mission application: here For a copy of the NIDLP deliver plan, please visit https://vision2030.gov.sa/en/programs/NIDLP