Saudi’s innovation boom: How Saudi is shaking up the innovation game

Saudi’s Innovation Boom: How Saudi is shaking up the innovation game - Tenity Insights from Davos 2025

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Innovation is happening everywhere, but some places are moving faster than others. One of the most exciting markets right now? Saudi Arabia.

With a young, highly educated population, government-backed initiatives, and a thriving startup ecosystem, Saudi Arabia is making bold moves to position itself as a global innovation hub. But how is it really happening? And what does it mean for startups, corporates, and investors?

In this episode of Innovation.Connected, our CEO & General Partner Andreas Iten sits down with Dr. Huda Alfardus, CVC Fund - Founding & Investment Committee Member of the Saudi National Bank, and ecosystem builder, at Davos 2025 to break it all down.

Let’s dive into some of the biggest insights from the episode.

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Startups vs. Corporates: Who’s really driving innovation?

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One of the biggest debates in the innovation world: Are startups or corporates the real drivers of change? Dr. Huda believes innovation is a chain reaction that starts with fresh ideas and leads to investment.

“When you have something new, a value add that’s innovation. When you create an applied version of it, that’s entrepreneurship. And when you scale it? That’s investment.”

Andreas agrees, but he takes a more critical stance on whether corporates can truly innovate:

“Big corporates can’t innovate. They have other strengths—resilience, stability, compliance. But when it comes to adopting new things and taking real risks, startups always move faster.”

This is why the startup-corporate partnership model is becoming more relevant than ever. While corporates provide scale and stability, startups bring agility and fresh thinking—and together, they can make real innovation happen.

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Corporate Venture building: smart strategy or innovation theater?

A key theme in the episode is corporate venture building—where large companies launch their own startups instead of partnering with external founders.

Saudi Arabia is betting big on this model. Many large corporations are launching venture arms to incubate new businesses from within. But is this always the right move?

Dr. Huda shares her perspective:

“If corporates want to innovate without slowing down, they can spin out subsidiaries. These startups stay independent but leverage corporate resources to scale faster.”

However, Andreas warns that corporate venture building often fails because companies skip critical steps in validating ideas:

“The real validation—the problem statement, customer research, market fit—gets skipped. Companies pour millions into something without knowing if it’s needed. That’s why so many corporate ventures crash.”

Instead of launching their own startups, corporates can accelerate innovation by acquiring or partnering with high-performing startups—without forcing them into corporate bureaucracy.

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Saudi’s innovation ecosystem: A market startups can’t ignore

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Saudi Arabia is no longer just an oil-driven economy. With Vision 2030, the country is making huge strides in technology, fintech, and entrepreneurship.

Here’s why Saudi is becoming a top destination for startups and investors:

✅ Government-backed innovation – Programs like MISA (Ministry of Investment Saudi Arabia) help foreign startups expand into the region.
✅ Corporate support – Saudi banks, insurance companies, and large enterprises are actively investing in startups and adopting new technology.
✅ Regulatory sandboxes – The government is creating flexible regulations that allow startups to test and launch new ideas.
✅ High-growth market – With a population of over 35 million, mostly young and digital-first, Saudi offers huge opportunities for B2C and B2B startups.

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Dr. Huda puts it best:

“Saudi isn’t just opening its doors to startups—it’s giving them the tools to scale. Entrepreneurs who come here will find an ecosystem designed to help them win.”

Andreas adds that many European startups still don’t see the opportunity:

“A lot of founders think Saudi is just for fundraising. That’s wrong. The real value is in the market opportunities—if you’re serious about scaling, you need to be here.”

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Women in innovation: breaking the myths

One of the most surprising takeaways from the episode? Saudi has one of the highest rates of women in leadership across the region.

Dr. Huda challenges outdated perceptions:

“Globally, Saudi has a higher participation rate of women in senior management. I’ve been in meetings worldwide where I was the only woman in the room—but in Saudi, women are always at the table.”

This shift is creating new opportunities for female founders, investors, and corporate leaders—making Saudi an even more attractive place for talent worldwide.

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Final Thoughts: why Saudi is the next big innovation Hub

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Saudi Arabia’s innovation boom isn’t slowing down. Whether you’re a startup founder, investor, or corporate leader, this is a market you can’t afford to ignore.

🔹 For startups – Saudi offers a high-growth market, investment opportunities, and government-backed support.
🔹 For corporates – Innovation works best when corporates and startups collaborate—not in isolation.
🔹 For investors – With a fast-growing tech ecosystem, Saudi is one of the most promising emerging markets for high returns.

As Andreas says:

“We’ve already set up our base in Saudi because we believe in the market. The opportunity is here—it’s just a matter of who moves first.”

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For more insights into fintech investment trends, corporate venture capital,and startup growth strategies, subscribe to Innovation. Connected –World Economic Forum Davos 2025 Edition.

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