Stanford Business

FEBRUARY 2007


Startup Cities


Fahd Al-Rasheed, MBA ’05

Western nations are not alone in trying to reduce their dependence on oil. Saudi Arabia, the world’s largest exporter of petroleum, has undertaken a mammoth initiative—the development of six privately funded “economic cities”—to diversify its economy away from oil, says Fahd Al-Rasheed, MBA ’05, deputy governor for economic cities in the Saudi Arabian General Investment Authority.

Saudi Arabia’s population growth has outstripped real growth in GDP. “We are aiming to establish 10 global industries by capitalizing on the kingdom’s competitive advantages as the energy capital of the world and a hub between East and West. The idea is to become a knowledge-based economy by 2020,” Al-Rasheed says. “If we succeed, we will be able to create more than 3 million new jobs and double the kingdom’s GDP in real terms.”

Al-Rasheed oversees private-sector developers implementing the projects, an investment of about $100 billion. The first, King Abdullah Economic City, slated to be a major seaport on the Red Sea and a financial center, already has gone public in what Al-Rasheed describes as “the largest IPO ever in the Middle East.” (More than 10 million people subscribed.) A second city will concentrate on logistics and transportation, another on scientific research and education.

“The sheer size of this challenge has kept me up many nights, but it is also what makes me excited about going to work every day,” Al-Rasheed says, adding, “My GSB education was instrumental in this journey in that it has enhanced my ability to learn new things quickly—I remember the days in which I had to go over 100 pages of cases/papers—and taught me that it was OK to admit I don’t know. In addition, the School’s interpersonal focus has allowed me to navigate the many leadership challenges along the way.”