Can the Digital Economy Outperform the Oil Economy in Terms of Achieving Human Development?

Abstract

The digital economy is reshaping the global economic landscape, with advancements in artificial intelligence, robotics, and virtual reality revolutionizing industries and transforming how people work and live. While the digital economy has promise in terms of improving human capital development, for example, through increased access to education and healthcare services, it also presents challenges, such as job displacement and income inequality. This study aims to evaluate the impact of the digital economy on human development indicators in the Kingdom of Saudi Arabia, seeking to understand how it influences education, health, and income levels. This paper provides valuable insights for policymakers seeking to enhance the Kingdom’s position in the global human development race by examining the relationship between the digital economy and human development using econometric models. This paper analyzes data from the World Bank and the United Nations Development Program to measure the impact of the digital economy on sustainable human development indicators. The findings show that while the digital economy has negligible or negative influence on other human development indicators, it has a limited beneficial impact on education in the long run. In addition, attaining sustainable human development—which is consistent with Vision 2030—requires expanding the economy beyond the oil sector and fostering scientific and technological progress.