Estimating GDP Growth in Saudi Arabia Under the Government's Vision 2030: a Knowledge-based Economy Approach

A knowledge-based economy is one where the generation and utilization of knowledge contribute significantly to economic growth and wealth creation. Thus, the economy must be characterized by knowledge-based activities and high-tech industries accounting for a significant share of GDP growth. Under the Vision 2030, Saudi Arabia is moving from oil-based economy to knowledge-based economy. Hence, the identification of components of knowledge economy is very important to understand its influence on macroeconomic variables such as gross domestic product (GDP). In this paper, we choose five components for knowledge economy: employment, education, innovation, ICT, and human capital. Using annual data from 1991 to 2017, we estimate the GDP growth and we find that GDP can be estimated by scientific and technical journal articles, mean age of education, mobile telecommunication revenues, unemployment rate, and HD index. We also find that predicted GDP behaves as an observed one with quite difference in values which can be explained by the impact of other economic factors on GDP.