Everything in Neom will be linked via the internet of things
Everything in Neom will be linked via the internet of things

Neom - city of robots

20 March 2018

“This is the blank page you need to write humanity’s next chapter.” That’s how the promoters of Neom envisage the new $500bn, 26,500sq km megacity in Saudi Arabia which, if all goes according to plan, would be big enough to fit in 37 Singapores.

The name ‘Neom’ unites ‘neo’, the Latin word for new, with ‘m’, representing ‘mostaqbal’, the Arabic word for future.  For crown prince Mohammed bin Salman, the project holds the key to Saudi Arabia’s future in an age when it can no longer rely on oil revenues (which currently account for 92% of its GDP).

Saudi Arabia has built megacities before and they haven’t always gone to plan. Founded 10 years ago, with a projected population of 2m, the port and metropolis of King Abdullah Economic City still houses fewer than 10,000 people. The 73 buildings in the King Abdullah Financial District, just north of the capital Riyadh, have not yet tempted financial institutions to move in. It doesn’t help that, despite the sweeping reforms introduced by Mohammed bin Salman, Saudi Arabia remains a difficult country to do business in – it is 94th in the World Bank rankings, just above El Salvador. The kingdom scores even worse when it comes to trading across borders.

Neom might just succeed though. As Steffen Hertog, associate professor at the London School of Economics, told The Atlantic: “While other cities were held back by unclear jurisdictions and lack of cooperation with relevant authorities, that is unlikely to be an obstacle for Neom.” That backing might also help the city fulfil its founder’s vision as a place that is both more liberal – women will not have to wear the abaya in public, for example – and technologically advanced than other parts of Saudi Arabia.

The project has been endorsed by the IMF, which believes it will stimulate trade. Neom’s location – in the northwest of the kingdom, between the Red Sea and the Hejaz mountains, spilling over into the borders of Jordan and Egypt – is designed to help it become a transnational high-tech economic hub. The Saudi government projects that, by 2030, Neom’s economy will be worth $100bn, a sixth of the country’s GDP and roughly equivalent to the wealth of Las Vegas.

The line about the “next chapter of humanity” sounds grandiose, but plans are afoot for the city to showcase the latest of everything from sea farming, self-driving cars and aircraft, automated public services and virtual currency. Neom will also, the government has pledged, be completely powered by renewable energy.

There will be robots – lots of them, as you might expect from a kingdom that bestowed citizenship rights in a robot, Sophia, last October, the first country in the world to do so. In Neom, robots will probably outnumber residents.

Bots will certainly, Mohammed Bin Salman’s speeches suggest, play a large part in this new metropolis. When announcing the plan, he declared: “We want the main robot and the first robot in Neom to be Neom, robot number one. Everything will have a link with artificial intelligence, with the internet of things – everything.” As Adam Clarke Estes wrote on Gizomodo: “This is basically the plot of [the Eander Binder story] I Robot, a book which did not turn out well for humans.”

While new technologies always fascinate leaders with futuristic visions, the Saudi government might do well to focus more on people and less on robots. Only 1.2% of the kingdom’s young people can expect to qualify for the equivalent of a master’s degree in their lifetime, according to an OECD study. Half of the population is under 25 – and one in four of that group are unemployed.

Neom will not necessarily resolve that – the crown prince told Bloomberg: “It is not Neom’s duty to create jobs for Saudis. Its duty is to be a world hub for everyone.” It remains to be seen what other action the government might take to alleviate unemployment, especially among the young.

The megacity is being funded, at least in part, by a new Saudi sovereign wealth fund, the Public Investment Fund (PIF). Other sources of finance will be necessary. As Hertog noted: “Because Saudi Arabia is much more financially constrained than it used to be, it may not to be able to make large upfront investments before private money comes.”

The state’s budget deficit is falling but, on the crown prince’s recent visit to the UK, it still stood at $52bn. The sale of 5% of Aramco, the national oil company, was supposed to fill some of that gap but is running behind schedule as officials struggle to meet expectations of a $2trillion valuation.

The good news is that Egypt has backed Neom, agreeing a joint $10bn development plan with Saudi Arabia. “Positive and promising” talks have begun over a similar deal with Jordan. Private investors will probably require more detail before committing to the project.

Building a new city in 13 years is ambitious. Building a new city that will test an array of emerging technologies will be even harder. There is also the disappointing precedent set by Masdar, Abu Dhabi’s City of the Future, a multi-billion dollar metropolis that is home to just 1,300 residents, not the 45,000 it was planned for.

Even if Neom does not become a $100bn urban economy by 2030, that will not necessarily mean it has failed. Mohammed bin Salman may be setting audacious (some might say unrealistic) goals to maintain the momentum of reform. Caution rarely excites, motivates or galvanises – thinking big might achieve the impossible.

Neom could be the crown prince’s equivalent to president John F. Kennedy’s commitment to put an American on the moon by end of the 1960s. As a goal, building a megacity from scratch, on a landscape almost as barren as the moon will certainly, to take a cue from Kennedy’s speech, measure the best of Saudi Arabia’s energies and skills. And if the $500bn gamble succeeds, even partially, it could provide a hopeful model for the future of Saudi Arabia – and the Middle East.

 Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
Cheshire
£400 - £600 per day
Procurement People
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE