Analyzing Population Change and Its Effects on Saudi Arabian Business

This report analyzes the effects of population change on business and economic development in Saudi Arabia. It highlights the country's reliance on the oil industry and its implications, while also considering the rising population due to increased fertility rates. The report employs a PESTEL analysis to examine political stability, economic factors (including oil revenue), social and cultural influences, technological advancements, environmental challenges like pollution, and the legal system. The study emphasizes the need for diversification beyond the petroleum sector to mitigate risks and suggests leveraging population changes for economic growth. It references key sources to support its findings and provides a comprehensive overview of the current situation and future outlook for business in Saudi Arabia.

Running head: POPULATION CHANGE IN SAUDI ARABIA 1
Population Change and Business in Saudi Arabia
Name
Academic Institution

POPULATION CHANGE AND BUSINESS IN SAUDI ARABIA 2
Population Change and Business in Saudi Arabia
The population of a country plays a huge role when it comes to its success especially in
terms of business and development. Saudi Arabia is a famous country in the Middle East known
for its petroleum manufacturing businesses. Oil contributes to about 80% of Saudi’s revenue and
90% of the total export revenue (Abdullah, 2018). Saudi Arabia is one of the few countries with
a manageable low population of 31.7 million. However, recent research indicates that the
population of Saudi Arabia is proliferating due to the rise in fertility rate. This increase in
population has severe effects on the nation’s economy.
PESTEL Analysis
Figure 1 PESTEL Factors
Source: (Marketing Theories - PESTEL Analysis, 2018)
PESTEL
Economic
Technological Legal
Environmental
Political Social

POPULATION CHANGE AND BUSINESS IN SAUDI ARABIA 3
Saudi Arabia is a politically stable nation that is ruled with a monarchy type of political
system. This fact has earned the country investors trust especially in the oil business. Peaceful
country assures both internal and external investors of success. Economically, Saudi Arabia is
currently the highest oil exporting country globally (Alhussein, 2017). Additionally, petroleum is
among the best business meaning the country earns more than enough profit to support the
country’s needs.
Saudi Arabia is strongly affiliated to Islamic religion and the related culture. According
to Saudi’s traditions women are not allowed to carry out certain duties. This instance derails
progress in that there are women capable of catalyzing developments but are denied a chance.
Saudi Arabia is steadily embracing modern and advanced technology in its operations (Estimo,
2014). Technology and science is the major secret to a country’s success as they make work
easier and reduce costs incurred in business.
The biggest environmental challenge in Saudi Arabia is environmental pollution.
Petroleum industries emit significant amounts of carbon dioxide during oil production. The
emissions lead to deforestation and the spread of respiratory diseases. Finally, the legal system in
Saudi Arabia is quite hash since it replicates the Islamic laws ("PESTLE Analysis of Saudi
Arabia 2016"). The punishments involved include hanging and beheading. These issues can
scare away investors as it complicates the business relations between investors and the
government.
Saudi Arabia should diversify their investments to other fields to avoid challenges when
the petroleum business encounters hitches. Taking the population change challenges as stepping
stones is the only key to economic development.

POPULATION CHANGE AND BUSINESS IN SAUDI ARABIA 4
References
Abdullah, H. (2018). Population Growth and Economic Development in Saudi Arabia.
Alhussein, E. (2017). A new social, economic and political climate emerges in Saudi Arabia.
Retrieved from https://www.thenational.ae/opinion/a-new-social-economic-and-political-
climate-emerges-in-saudi-arabia-1.10073
Estimo, R. (2014). Increasing use of modern technology making its impact on Saudi culture.
Retrieved from http://www.arabnews.com/saudi-arabia/news/649351
Marketing Theories - PESTEL Analysis. (2018). Retrieved from
https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis
PESTLE Analysis of Saudi Arabia 2016. (2018). Retrieved from
https://www.researchandmarkets.com/reports/3785496/pestle-analysis-of-saudi-arabia-
2016