By Woroud Aldosari
Saudi Arabia has suffered a remarkable economic transformation during the last century, evolving from a large agrarian society to one of the world’s main energy exporters. More recently, the kingdom has focused on diversifying its economy through Vision 2030, emphasizing non -oil sectors and attracting global investments. However, for this ambitious successful vision, several fundamental issues related to productivity will have to be taken into account, which the article will highlight and explore.
Above all, it is important to recognize a crucial difference between the developed country and the development of those that are the strategies that probably promote greater productivity. In the first, where workers already have access to a high level of physical capital (tools, machinery and infrastructure), productivity is stimulated by advances in technology and innovation, but in the latter, the emphasis that it must to address capital to attention. Despite its rapid progress in recent years, the infrastructure of the kingdom is not yet at the level of the most developed nations in the world, and only when it has further closed that gap if it changes its approach to technological innovation.
The same distinction also applies to the determination of appropriate labor practices. The introduction of progressive measures, such as a shorter work week, can be desirable and effective in developed countries, but it is likely to be tested to prove counterproductive in places that lack the mature systems necessary to support the issue. As Shakespeare observes in another context, the preparation is everything, and Riad must exhibit the Actity when judging the moment when the luxury of strengthening its labor protection regulations can be allowed without damaging productivity.
As these recommendations suggest, a consideration of vital importance that influences the value of any proposed action course is of contextual suitability. There is no unique solution for the problem of the productivity of a country; There are only competitive policies in a variable way that respond to their given condition. With this in mind, it is important to give weight to a factor that distinguishes the situation of Saudi Arabia from that of apparently comparable nations. This is the question of the composition of the workforce in terms of nationality. At present, foreigners represent 77 percent of the total number of workers in the private sector. This great dependence on imported work is a legacy of decisions taken the period of oil dependence on the country, but, although beneficial at that time, this policy is of questionable merit today. As the kingdom performs the difficult process of economic diversification, there is a case for its simultaneous location of its workforce. By encouraging greater participation and development of skills among the indigenous population, the country has a better opportunity to fail sustainable economic growth. A national workforce equipped with relevant qualifications and skills for energy participation in the country’s industrial diversification, after an initial capital disbursement on training and education, will pay the investment by promoting greater long -term productivity.
The first two examples of countries that have benefited from the location of the workforce are the United States and Japan. For the sake of brevity we can focus exclusively on the first. In the US, many manufacturing works were subcontracted in countries with lower general expenses, with the expected result of a significant decrease in production costs. However, this apparent advantage soon refused due to delays in the supply chain, problems with quality control and lack of innovation. Consequently, the policy was quickly reversed, and several conspicuous benefits occurred properly. By reforming manufacturing and hiring local talent jobs, companies begging to see improvements in the efficiency of the supply chain, faster innovation cycles and higher quality products. The studies suggest that the restarted has resulted in notable productivity profits. Local factors can influence attempts from other countries to follow their example, but it is likely that, when looking for a similar policy, we will reach comparable figures.
However, there is a particularly significant factor to take into account as Saudi Arabia manages its transition from a mainly foreign workforce to a predominantly local: namely, the need to maintain the lack of orders). The importance of this consideration can be presented by reflection on Chinese experience. In 2010, when the population of working age (between 15 and 64) reached its maximum point as a percentage of the total population, China underwent a recovery of correspondence in productivity and economic growth, but from then on, as the population of working age began to age, the item of it began to age. Therefore, it will be important that those who supervise the location of the workforce of the kingdom to direct their attention additionally to the proportion of citizens of employment to others, whether too young or too old for the tactics of participation for the old aspicicans as so as so as so as as so old as as as as, as as aspases, the tactics ignore an incipient demographic disadvantage. Finally, once Riad has gathered the success of the transition to a developed nation, a mixed economy attended by a local workforce that represents a high proportion of the general population, it is likely that the task of maintaining and promoting hinge productivity. Here, we can take stock of Germany’s example. Its ‘Industry 4.0’ initiative has resulted in the implementation, by companies such as Volkswagen and BMW, or smart factories where machines communicate with each other, optimize production, reduce inactivity time and improve product quality. As Saudi emerges as a serious player on the international stage, he will seek to emulate his new competitors, taking note of the best practices (either German or otherwise), adapting the issue to the local environment and, therefore, turning what economists.
