The university’s fund comes as part of ongoing efforts to develop the country’s innovation economy, but it faces an uphill struggle.
The King Abdullah University of Science and Technology in Thuwal, Saudi Arabia, has announced the launch of a new fund that will look to add impetus into the local tech ecosystem, targeting seed stage deeptech firms.
At a basic level, the KAUST Innovation Fund will look to invest $200K in venture capital in seed level businesses, and $2 million in early-stage businesses. Looking to become strategic partners with the chosen few, the fund is seeking firms that promise a large potential market, possess a superior project or technology and have laid out a clear business plan. Even if any given businesses fulfil these requirements, extra brownie points will go to businesses that align with KAUST's primary areas of research, as well as those who can provide solutions to local problems and generate job creation.
The fund comes as part of efforts by KAUST to develop the country's innovation economy, as the country looks to diversify its overall economy away from reliance on oil exports in line with Vision 2030. Yet for all the efforts across the board, the country’s innovation economy still faces an uphill task. In 2021, the Global Innovation Index ranked Saudi Arabia 66th out of 132 nations. The index uses seven pillars to rank each country: Institutions, Human Capital & Research, Infrastructure, Market Sophistication, Business Sophistication, Creative Outputs and Knowledge & Technology Outputs. While Saudi Arabia performed above the regional average in Human Capital & Research, Infrastructure and Market Sophistication, it performed below the high-income group average in all pillars.
In breaking down Saudi Arabia’s strengths and weaknesses from the study, the index ranks the country highly in ‘state of cluster development and depth’ (8th); ‘ease of protecting minority investors’ (3rd) and ‘market capitalisation, % GDP’ (6th). Rather damningly however, Saudi Arabia ranked poorly in the ‘political and operational stability’ (119th) and 'business environment' (129th).
There’s an argument to be made, however, that these results should come as no surprise, despite the best of intentions and the greatest of resources. For an innovation economy to take off, there needs to be an innovation ecosystem, one that can pull all the various strings together. At the back end of 2021, KAUST launched its first ever online course, one developed by the university innovation department. Sidelining the traditions of academia in favour of teaching and preaching entrepreneurship, the course targeted 10,000 subscribers its first year, and instead received 70,000 in the first month. With this new fund, KAUST hopes to trigger growth on several fronts, with expansion of the innovation and technology investment and VC communities high on the list of priorities.