From Importer to Innovator: Saudi Arabia’s 5 Major Shifts in the Defense Industry

Saudi Arabia’s defense sector is at a pivotal moment, as the Kingdom accelerates efforts to reduce its reliance on oil revenues and build a diversified, resilient economy. Central to this transformation is the military industries sector, which has become a strategic priority under the government’s Vision 2030 agenda. By targeting a localization rate of 50% of the Kingdom’s total military spending by 2030, Saudi Arabia aims to strengthen national security, achieve greater self-sufficiency, and boost the national economy through the development of indigenous capabilities.

The General Authority for Military Industries (GAMI) stands at the forefront of this movement, acting as the regulatory and enabling body for the defense industry. GAMI’s mandate includes overseeing technology transfer, streamlining military procurement, and supporting the growth of local defense production.

In this blog, we explore how Saudi Arabia is rapidly transforming its defense industry from a heavy importer to a global innovator. Covering key institutions, global partnerships, local tech breakthroughs, and the economic impact of the Kingdom’s five major industry shifts.

1. Vision 2030’s Bold Localization Target

At the heart of the transformation is a clear mandate: increase the local share of defense procurement, including defense equipment and services, from just 4% in 2018 to more than 50% by 2030.

Progress in the military sector has been rapid. By the end of 2023, localization had reached 19.35%, with the number of licensed military facilities rising from just five in 2019 to 296 by Q3 2024.

2. Institutional Powerhouses: GAMI & SAMI

Two key institutions are steering the sector’s growth:

• GAMI (General Authority for Military Industries) – Regulates, licenses, and creates the policy framework for localization. GAMI established a licensing mechanism in 2019 for military manufacturing, services, and supply of military products, supporting the expansion of the sector and increasing its direct contribution to the national economy and GDP.
• SAMI (Saudi Arabian Military Industries) – A Public Investment Fund company executing military manufacturing projects and forging strategic partnerships. SAMI aims to localize defense spending, expand its global presence, and enhance national defense capabilities in line with Saudi Vision 2030.

SAMI has already signed 53 agreements worth USD $9.33 billion and aims to become one of the world’s top-25 defense companies by 2030.

3. Strategic Global Partnerships for Technology Transfer

Localization isn’t isolation, it’s about learning from the best. Saudi Arabia is partnering with global giants like Lockheed Martin (THAAD components), Leonardo, Baykar (UAV tech), and Aselsan (defense electronics) through formal cooperation agreements that emphasize technology transfer, co-production, and the localization of manufacturing and services.

These partnerships focus on advancing defense technology and bring:

• Technology transfer agreements
• Joint R&D initiatives
• Skills training for Saudi engineers
• Localization of manufacturing and services to support operational readiness and sustainment

Saudi Arabia is also in talks to join the Global Combat Air Programme (GCAP), collaborating with the UK, Italy, and Japan on next-generation fighter jets through cooperation agreements that prioritize defense technology and joint services development.

4. Homegrown Innovation: UAVs, Radar, and AI

Innovation is now emerging from within, driven by dedicated research centers focused on developing advanced military technologies such as UAVs and radar systems. Notable military products developed domestically include:

• eBARIQ UAV – An advanced drone developed by SAMI-AEC
• Al-Rasid radar system – Indigenous radar tech for enhanced surveillance
• PSATRI drones – Including Saqr, Samoom, and SkyGuard, integrating AI and autonomous navigation

These military products demonstrate the enhancement of national capabilities and are debuting at major defense exhibitions, signaling Saudi Arabia’s capability to compete globally in high-tech defense systems.

5. Economic Impact & Human Capital Growth

The localization drive is projected to deliver:

• USD $3.73 billion direct economic contribution by 2030, with significant involvement from the private sector in driving investment and supporting advanced manufacturing.

Collaboration between public and private sectors is essential for achieving growth and localization targets, fostering innovation, and building a robust supply chain.

Some forecasts go even further USD $26.48 billion GDP impact and 100,000 jobs when factoring in indirect benefits, including new opportunities and skills development for Saudi youth in technical and engineering roles within the defense industry.

Investment in the Defense Industry: Fueling Transformation

By attracting foreign investments and forging partnerships with global defense companies, including Turkish firms and other international leaders, Saudi Arabia is rapidly advancing its capabilities in military equipment and advanced military technologies. The World Defense Show has emerged as a premier platform for local companies and manufacturers to showcase their innovations, connect with international partners, and explore new investment opportunities. This event has helped position Saudi Arabia as a regional hub for advanced military equipment, unmanned aerial vehicles, and autonomous systems, further strengthening the military sector’s role in the national economy.

Leading the Way Forward!

Saudi Arabia’s defense transformation stands as one of the most ambitious industrial evolutions of our time-driven by bold policies, strong institutions, and a commitment to homegrown innovation.

Reaching the Kingdom’s 50% localization goal by 2030 will not only reshape where defense capabilities are sourced, but also revolutionize how they are developed, positioning Saudi Arabia as a global leader in defense innovation.

With over 18 years of experience in the Kingdom, TASC Outsourcing drives transformation by delivering tailored workforce solutions and deep industry expertise. We empower defense organizations with the talent and capabilities they need to localize, innovate, and succeed.

Contact us now! to partner with TASC Outsourcing and be part of shaping Saudi Arabia’s defense future.