Why is Saudi Arabia suddenly the pit stop of choice for an impressive laundry list of major companies? How is it positioned among the growing number of Middle-Eastern industrial free zones? And should Rust Belt cities like Cincinnati look this way for answers?
If a nation's cities are the products of their ingredients, the Saudi Arabian pantry leaves much to be desired, with a grueling climate, a monopolistic economy built on the extraction of fossil fuels, looming regional threats, and conservative social practices that hinder freedoms, especially for women.
The resulting menu reflects the bleak inputs. Expansive wealth has combined with poor urban design to generate an unsavory cocktail of high-speed pedestrian-hostile highways and walled single-use compounds. Erratic industrial development and heavy utility infrastructure haphazardly dot the desert landscape. For decades, Saudi Arabia’s physical development has emulated American suburbia, prioritizing privacy over community to the extent it’s been organized at all. The nation’s prosperity, driven by oil, yields few private sector jobs. Reform has been slow and modest, and educational advances, primarily for men, have focused on growing computer and technical skills with little attention to intellectual fields.
But, despite all of its downsides, Saudi Arabia is advancing because it has recognized that oil wealth cannot drive the country forever. Much like America’s Rust Belt, Saudi Arabia is confronting the reality that, in the future, the economy needs to find new drivers.
To do this, Saudi Arabia committed to developing several new cities designed to generate opportunities for the country’s exploding young population to stay at home. The intent was to invest existing surpluses to develop new and different kinds of economies to fuel the country’s future. This contrasts with the region’s reputation for lavish “living in the moment.”
Rather than pressing solely for an emergence of finance or innovation that it is ill-equipped to attract, Saudi Arabia has made a tactical decision to leverage its industrial infrastructure, considering the regional advantage of its unique global positioning along the Red Sea at the confluence of busy shipping routes.
One of these cities, the King Abdullah Economic City, is by some measures the biggest development project in the history of the world. KAEC includes an unusual confluence of many modes of industrial transport, matching a seaport with a rail port and highways connecting the Indian Ocean and Suez Canal into the Middle East and Eastern Europe. Smartly, much of its investment has focused on increasing and humanizing its industrial infrastructure, leveraging the location by luring major industrial and shipping outfits to conduct midstream logistics activities here, midway through their global journey.