Let me start by asking this question. Is the UAE economy an innovative economy? There are many reasons that make me believe so. Among these reasons are the statements from expatriate professionals or workers who work in this country and tourists who visit, stating that the UAE is the safest place to live and work in the Middle East, the reports of international organisations such as the World Bank and the World Economic Forum affirming the right direction of the UAE economy and local and international media reporting that the UAE has the highest internet users in the Middle East and that it is one of the best countries in the world for business. Although I’m hesitant about the innovativeness of our economy, such talk and news contradict my belief.
What I found flattering, and what forced me to rethink my position, was to discover that the UAE was classified and listed among the Innovation-Driven Economies by the World Economic Forum ‘Global Competitiveness Report 2011-2012. The report classified the world economies’ level of development into three stages. The first stage is the ‘factors-driven economies’ which includes 37 countries. The second stage is the ‘efficiencies-driven economies’ which includes 28 countries and the third stage is the ‘innovation-driven economies’ which includes 35 countries. Forty two countries were in transition phase from one stage to the other. The UAE proudly succeeded in meeting the criteria for the 12 pillars for competitiveness, which were used to assess each country’s level of competitiveness globally. We were classified with developed countries that have a long history in innovation such as the US, UK, Germany, Switzerland, Sweden, Singapore and Japan. An impressive fact, denoting that we really succeeded in breaking the dominant perception that is widely held in most Arab and Islamic societies that our culture and system impede creative ideas. In the UAE, we have succeeded in creating an adaptive culture where social institutions participate to modify culture and system and allow individuals to perceive new realities.
However, classifying UAE as an Innovation-Driven economy has also led me to be more concerned.
My first concern stems from how people in the UAE would perceive this classification. The second one is about the reality of the innovativeness of the UAE economy.
Regarding the first concern, the answer lies in the fact that people must avoid being overtly euphoric. Don’t think that we have reached our limit in building this country. On the contrary, our position at this stage puts more pressure on us to do more. The report itself asserts this by stating that ‘for those that have reached the innovation stage of development, adapting technologies is no longer sufficient for increasing productivity. Firms in these countries must design and develop cutting-edge products and processes to maintain a competitive edge’. The reason we were able to be among the group of innovative countries is that we were able to break from the dominant thinking and move to a more open-minded, flexible and adaptable system. It is not an easy movement and not every society can achieve it without undergoing a high cost and instability. Fortunately, the UAE achieved it without any disruptive factors. In fact, lots of societies around the world are trying to change. Nevertheless, to achieve this change, lots of disruptive or even destructive factors may be involved.
As for the second concern, I still don’t think that we are an innovation-driven economy as yet. What are we innovating? Do we have innovative entrepreneurs? Where are their creative ideas and inventions? How have our entrepreneurs compared with Howard Hughes (1905-1976), who expanded the Trans World Airline (TWA) as the world’s first truly commercial airline — who wanted the flight to be a triumph of technology, illustrating that safe, long-distance air travel was possible; or Ray Kroc (1902-1984), who envisioned a restaurant that operates like a factory and produces hot food, delivers fast service and consistent quality no matter where the restaurant may be located in the world; or Mark Zuckerberg, who created facebook.com in 2004 from his room in the dorm? Zuckerberg’s idea was to connect people online through a social network at colleges. Today, Facebook has close to one billion users around the world. The answer to my question is no.
Thus to answer the question of innovation in this country, we need to ask ourselves more questions and try to find answers for them. Questions such as: What is the level of our educational institutions? Are they at the same level as MIT, Harvard or KIT? What are their research contributions to society? Actually, science education does not exist in our universities except for the UAE University, which has a college of science and Khalifa University that is offering scientific majors. But at present, no university has R&D labs.
More questions need to be asked: Who are our scholars and scientists? How are they, compared with Peter Drucker (1909-2005), the man who invented management; Albert Einstein (1879-1955), the man who theorised that converting a small amount of mass would release an enormous amount of energy and Isaac Newton (1642-1727), the man who redesigned the human mind by imagining and proving a rational universe? Honestly, during our time, I have not seen one.
Let’s continue to ask more questions: Which of our business organisations are innovating today? Where are their R&D facilities? How are their innovations in comparison to the ones which 3M, Apple, Unilever or GE provided to the world? In reality, our best business organisations are working as agents and distributors for those world leading business organisations. Since they are getting the innovative products ready to sell, why bother to invent one?
By looking more closely at the ‘Global Competitiveness Report’, we see that the World Economic Forum used two pillars to determine the level of the country’s innovativeness: Business Sophistication and Innovation. If the business environment is sophisticated, means that if ‘companies and suppliers from a particular sector are interconnected in geographically proximate groups, called clusters, efficiency is heightened, greater opportunities for innovation in processes and products are created and barriers to entry for new firms are reduced’. This statement can be very well applied to UAE economy.
For the innovation pillar, there are two factors. The first one is ‘adopting existing technologies or making incremental improvements’ to the business processes of the institutions of certain country. This factor fits well for the UAE institutions. The second factor is the ‘sufficient investment in research and development (R&D), especially by the private sector; the presence of high-quality scientific research institutions; extensive collaboration in research between universities and industry; and the protection of intellectual property’. The UAE has a long way to go to achieve satisfactory levels in this capacity.
I’m a very patriotic person. I would like to see my country have the best innovating and performing economy. Therefore, I set very high standards for it. It must achieve these standards for innovation. The types of standards are reflected in the types of questions which I stated in this article. I’m looking for realistic answers for them. If you, as a reader, have realistic answers then please let me know.
Dr Khalid M. Alkhazraji, a UAE academic and former undersecretary of Labour, is chairman of Al Kawthar Investment. You can follow him on Twitter at www.twitter.com/DrAlkhazraji. This article is the first of a six-part series.
