Rethinking Growth and Diversification in Saudi Arabia

Guest blog by Amro Hariri, LEG ’25

Over the past ten weeks, the Leading Economic Growth program has fundamentally reshaped how I understand and think about economic development. I entered the course with a broad intuition about the Kingdom’s diversification challenges. As an outcome of this course, I believe I am now better equipped to help the Kingdom’s diversification efforts with a sharper diagnostic lens, a richer toolkit, and a clearer sense of applying a mental model to lead economic growth efforts and initiatives in Saudi Arabia.

One of the most valuable concepts I learned is Problem-Driven Iterative Adaptation (PDIA). Rather than accepting big, pre-packaged solutions, PDIA pushed me to slow down, define the problem more rigorously, and break it into its root causes using tools like the fishbone diagram. The Triple A Framework (Authorization, Acceptance, and Ability) helped me understand not only what to do, but whether it can realistically be done. 

The process taught me that growth is rarely delivered through grand announcements, its built through repeated learning loops, small experiments, and continuous information exchange. For someone working in NEOM’s strategy space, this shift in mindset has been invaluable as I have started using these concepts and thinking in my projects and engagements.

The course deepened my understanding of the scrabble theory and economic complexity; the idea that prosperity comes from accumulating productive capabilities “letters” to produce ever longer and more complex words “products”. Concepts such as the Economic Complexity Index and Product Space are real manifestations on how to measure the capabilities and complexity of a country’s economy. As a result, one can identify where the gaps are in the Product Space that need attention to make strategic bets, apply parsimonious policy or simply apply light touches and let the market do it magic. By understanding these concepts, I have a new perspective on how to analyze and understand the Saudi economy. As an outcome of my economic growth challenge, I was able to conclude that Saudi is impacted by a limited industrial base, and why imports of complex goods remain and have historically been high. 

I now see diversification not as a matter of simply choosing strategic sectors, but on first identifying existing capabilities and looking for the closest trees that monkeys can jump towards. Now in cases, such as Saudi Arabia, where there are limited trees there needs to be a concentrated effort to make strategic bets and build the relevant public goods to enable new industries and sectors to emerge through training, investments, coordination, industrial policy and knowhow accumulation. 

Applying growth diagnostics, especially Professor Ricardo Hausmann’s idea around binding constraints, was a turning point. The framework helped me pinpoint the Kingdom’s core limitation in weak industrial capabilities, reflected in price signals, abundance of foreign goods, and firms relying on low-cost expatriate labor (“camels”) to survive.  

The “hippos in the desert” analogy, where firms import complex goods because the local ecosystem cannot supply them, captured the Saudi manufacturing challenge visibly.

Another critical lesson was the relationship between inclusive growth and productivity. The Brookings study and OECD framework showed me a profound way of looking at growth, prosperity and inclusion, and how such concepts reinforce each other to measure national productivity across regions, sectors, and social groups. For Saudi Arabia, the emerging regional imbalances is an important economic issue that affects long-term competitiveness on a national scale.

A transformative insight for my own work was the idea of high-bandwidth organization, institutions that actively collect, process, and respond to information from firms. I realized NEOM is uniquely positioned to function as an “information revelation machine” whereby attracting global firms, uncovering their needs, and shaping the public goods required to build new capabilities for the Kingdom. This thinking has already started influencing how I approach strategy development internally and my communication with colleagues and business partners.  

The final module introduced the idea of Greenplexity, and we were lucky to be the cohort when the official launch occurred for a deeper bond! This concept of how countries can use decarbonization as a pathway to build new productive capabilities is a much-needed incentive to motivate countries to really invest and grow these green technologies for the future. For Saudi Arabia, this aligns directly with the opportunity to build industrial capacity in renewable energy inputs, green hydrogen technology, and advanced materials. The quote “don’t ask what you can do to decarbonize but ask what you can do to help the world decarbonize” is a clear message for the abundance of opportunities to seize to have a positive impact on the world!

I now recognize that Saudi Arabia’s challenge is not simply sectoral diversification, it is capability accumulation. The frameworks from this course will guide how I: 

• Diagnose binding constraints in industrial development 

• Structure high-bandwidth interactions between government and firms 

• Advocate for iterative, repeated, learning , evidence-based strategies 

• Help shape NEOM as a national pilot program and platform for new capability building in future industries in the green economy 

• Support policies that bridge social inclusiveness and expand opportunities and leverage international knowhow 

This course has led me to identify that Saudi has remained in low-complexity industrial and manufacturing space, evidence by the significant size of our imports of capital goods. Thus, the next areas I think I would be interested to learn more about are: 

• What were the specific steps and state interventions taken by countries such as China to move from the low complexity to the higher complexity product space? And how much of this economic development is a result of culture and leadership? 

• How to encourage firms to adopt technologies that can help improve their productivity and raise their quality standards so that their product can compete globally? 

As a closing note, I would like to express my sincerest appreciation to the whole team who have been guiding us on such an enriching learning journey through these past 10 weeks. It was a demanding course and required major commitments in time, effort and energy. Yet, it was worth it and more. I aim to take this profound new knowledge and continue to evolve and build on it to help my country on its Vision 2030 journey. As Saudi was known for its oil, perhaps our new future is for us to be the new energy capital of the world to help it decarbonize. Thank you.

This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. 63 Participants  successfully completed this 10-week online course in December 2025. These are their learning  journey  stories.