This paper is an investigation of the economic trends of diversification vs. specialization of Saudi
urban system over the last eighteen years of analysis (1992 to 2010). This research paper set out to
answer three simple questions: (a) between 1992 and 2010, have the Saudi urban economies tended
to diversify or to specialize?; (b) have the Saudi urban economies with more diversified economic
structure tended to grow faster than those with a more specialized structure?; and (c) over the same
period, which economic sectors become more diversified or specialized across the Saudi urban
system?
The urban system analyzed herein account for approximately 70 percent of the population of the
nation and about 58 percent of the workforce of the national total workforce. The findings reveal
that, given all the efforts of Saudi governments at all levels to spatially diversify the economic
activities through improving the distribution of economic activities across urban places, the majority
of Saudi urban places did not change their relative economic structure or their level of diversity
during the period of analysis. The majority of Saudi urban places did not change their relative
economic structure or their level of diversity between 1992 and 2010. This is verified by two
results: (a) The stability of the diversity/specialized index over this period of analysis for all urban
places except for a few urban areas; and(b) The fact that more than 63% of all urban areas remain in
the same cluster (i.e. HI ≤ 0.3) over the period of analysis.