Measuring the Impact of the Digital Economy on Economic Growth in Saudi Arabia (2004–2023)

Abstract

 This study aimed to examine the impact of the digital economy on economic growth in Saudi Arabia over the period 2004–2023 using the ARDL approach. It analyzed the role of digital infrastructure (internet users), investments in digital education and training, and digital financial services (revenues from the telecommunications and information technology sector) in supporting growth. The results revealed a positive and statistically significant relationship between internet users, telecommunications sector revenues, and IT expenditure with economic growth, particularly in the long run. In contrast, spending on digital education and training did not show a significant long-term effect, although it exhibited a slight positive impact in the short run, which may be attributed to the mismatch between educational outputs and labor market needs. The error correction term confirmed the existence of a stable long-run equilibrium relationship among the variables. The study highlights the importance of sustained investment in the components of the digital economy to achieve the objectives of Saudi Vision 2030. It also emphasizes the need to redesign digital education and training policies to better align with labor market requirements, strengthen collaboration between government, educational institutions, and the private sector, and support innovative and flexible learning platforms that enhance the digital skills necessary for economic growth.