Regulations are what build a digital economy. Saudi Arabia proves why

For any developing country, building out an effective and functioning digital economy is crucial – and central to this is delivering infrastructure projects that make this possible. But less is said about the regulations behind those projects that make them possible,

Robust regulation is an essential component of bridging the digital divide, and it makes infrastructure investment possible. Equitable access, healthy competition, and sustained investment all rely on strong regulations being hashed out at the top levels.

When it comes to the digital economy and all the risks and opportunities it poses, this is particularly important. OECD guidance highlights the importance of transparent connectivity mapping, streamlined permitting processes, infrastructure sharing and spectrum policies with rural coverage obligations. Complementary measures such as performance-based public funding, digital literacy programmes and targeted support for low-income users and small businesses are equally critical for promoting digital inclusion.

Between 2021 and 2023, the digital sector captured 8.3% of global FDI on average – up from 5.5% a decade earlier, but turning this investment into meaningful progress on inclusion and digital economy growth needs more than cash. Countries including Saudi Arabia show us how to move from investment to impact.

The Saudi digital economy now contributes SAR 495 billion ($131 billion), accounting for approximately 15% of GDP, with the Vision 2030 goal of expanding this by a further SAR 50 ($13 billion) by 2030.

Saudi Arabia’s regulatory evolution has been instrumental in this. Through coordinated policy reforms and cross-government programmes, the Kingdom is linking infrastructure investment with inclusive growth, innovation, and competitiveness across industries.

Take, for example, the Communications, Space & Technology Commission’s (CST) National Frequency Spectrum Strategy 2020–2025. It aims to expand the efficient use of radio spectrum to support innovation, emerging wireless technologies and national security. The strategy focuses on enabling digital growth through optimized spectrum management, encouraging investment and supporting new applications such as 5G and the Internet of Things.

CST worked with operators and stakeholders through open consultations to shape transparent frameworks for spectrum sharing and infrastructure co-location, helping extend coverage faster and more efficiently to rural areas. Clear rules and transparent licensing frameworks have given investors the predictability they need to continue driving private-sector growth within the Kingdom’s digital economy.

Saudi Arabia’s approach addresses both supply- and demand-side challenges. Its universal service programmes have financed connectivity projects in remote areas, while national digital strategies enhance coordination among agencies to reduce duplication and deliver results faster.

The result is a median mobile internet speed across the entire country of 129 Mbps – the fourth highest among G20 nations.

Other recent regulatory measures have reinforced market confidence and opened new space for innovation in areas such as fintech, cloud services and digital trade.

Cooperation with local companies like stc group have played a significant role in this transformation, accelerating 5G deployment and digital adoption to support the country’s technological advancement.

Saudi Arabia has also invested in digital skills and literacy initiatives, including the Future Skills Program and the Digital Entrepreneurship Center, which help bridge socio-economic and gender gaps in digital access. These efforts complement regulatory reforms by ensuring that citizens and SMEs can effectively use new technologies and benefit from digital services. Both initiatives partner with the private sector and global organizations to strengthen digital capabilities in cloud technology, software development, and cybersecurity, ensuring that wider connectivity translates into tangible economic participation.

Despite significant progress, challenges persist. Overlapping mandates across telecom, content, privacy and cybersecurity domains can lead to fragmented oversight and inefficiency. Connectivity gaps remain in rural and remote areas, while outdated OTT frameworks may hinder innovation. Inflexible spectrum policies and evolving tax burdens could also discourage investment.

Unless addressed, these issues risk impeding the Kingdom’s digital momentum. At the same time, these challenges open the door for new policy ideas and stronger collaboration between sectors, helping regulators align more closely and respond faster to change.

The Kingdom’s experience offers valuable lessons for other countries seeking to advance digital inclusion. While the challenges and opportunities in each country are varied, the Saudi experience has brought to the service three key concrete ideas for better policymaking:

1. Establish a unified digital governance model to avoid overlapping mandates and improve policy coherence.

2. Prioritize public–private collaboration in deploying rural connectivity solutions, including shared infrastructure and spectrum-leasing frameworks.

3. Embed digital literacy and skills training in national strategies so citizens can fully participate in the digital economy.

4. Align incentives and tax policies to reward investments in connectivity and innovation.

Countries aiming to build on similar progress can develop transparent connectivity maps to reveal service gaps, establish one-stop permitting systems to accelerate infrastructure rollout, and design performance-based incentives that extend service to remote areas. Integrating digital skills into national education agendas and small-business programmes can further strengthen adoption and impact.

Saudi Arabia’s next step is to modernize and align regulatory frameworks to ensure a cohesive, adaptive and inclusive approach. By linking policy execution to measurable outcomes and sharing lessons through international cooperation platforms, Saudi Arabia is making progress in building out a digital economy that now contributes to shaping global standards for inclusive digital development.

By embracing reforms, the Kingdom has fostered fair competition, sustained private-sector investment, and ensured that the benefits of digital transformation reach all citizens and businesses – a blueprint that others can follow.