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Compared to other Gulf Cooperation Council (GCC) countries, the UAE is still a special place to visit, work and live. Among the most visited cities in the world, Dubai comes at No. 7, beating major world cities such as Hong Kong, Istanbul and Shanghai. And according to the Aon Hewitt report, the UAE is the safest place to work in the Middle East. Large number of tourists comes from the GCC and most of the GCC’s business people see the UAE as a catalyst to their business.

The World Economic Forum’s “Global Competitiveness Report 2011-2012” classified the UAE as one of the Innovation-Driven Economies. Except for Oman, the report classified the rest of the GCC economies as transitional economies moving from the first to the second stage. Oman was classified in the transition phase from the second to the third stage. The first stage which is “factors-driven” was assessed using factors such as institutions, infrastructure, macroeconomic environment, and health and primary education. The second stage which is “efficiency-driven” was assessed using factors such as higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness and market size. The third stage is innovation-driven economy which was assessed using business sophistication and innovation factors.

The other GCC countries did not come even close to the UAE. Economic development in Saudi Arabia started about 60 years ago, in Kuwait 50 years ago and in Qatar and the UAE, 40 years. All GCC countries share similar factors such as availability of natural resources, a shortage of local labours, similar demographic structure, adequate financial resources and similar language and religious beliefs. So why are they lagging behind? Is it because they are trapped in a dominant paradigm that dictates the way of doing business? Or is it because of their government system such as in Kuwait or religious factor such as in Saudi Arabia? Or is it because of their economic and social policies? Or because the UAE is different?

Dr. Fayez Al Shahri, a Saudi writer, wrote an article titled ‘The Chemistry of the Emirati Personality’ in the daily newspaper, Al Riyadh in which he said that the Emirati personality is open, clear and welcoming, quiet and well-spoken and easy to live with and do business with. He continues, that with this type of a personality, the Emiratis were able to influence other nationalities that live with them with the same chemistry.

Another writer from Kuwait, Abdullah Al Basis writes, “We are in Kuwait, when we ask our government for reform we tell them we want to be like the Emirates. We want to have the social development of the Emirates, the health care of the Emirates, the education curriculum of the Emirates, and the salary of the Emirates. We want to have the e-government system and the traffic system like the Emirates. We want you to build us museums like those in Abu Dhabi and metro like the one in Dubai.” The level of the economic development of the GCC countries is very essential for the UAE. First, because the UAE is part of the GCC.It is the second largest economy in the GCC and in the Arab world. The GCC countries are pursuing economic integration. The gap that may exist from the difference in economic development levels could undermine the economic integration process and create economic and social inequalities. Second, in order for the UAE to remain competitive and innovative, it must be surrounded by a regional competitive and innovative environment. The businesses, customers and suppliers’ clusters and interconnections within the GCC are difficult to achieve if we don’t have a continuous developing and welcoming environment.

Finally and most importantly, in order for business and innovation to flourish it require a social structure. Aside from supporting institutions, this social structure must first come in the form of open-mindedness, a welcoming and hospitable environment, harmony and tolerance, which in turn lead to build trust and relationships, have a livable community and collaborative governance. These are the ingredients of regional innovation.

The most challenging issue is to achieve this kind of social structure while having a culturally diverse society where around 203 nationalities inhabit it as is the case in the UAE. So far, the UAE people have worked hard towards achieving this.

Did we achieve it? I think we still have a long way to go. I believe we will achieve it by working together side-by-side with the other GCC countries.

Dr Khalid M. Al Khazraji is a UAE academic and former undersecretary of Labour. He is the chairman of Al Kawthar Investment. You can follow him on Twitter at This article is the second of a six-part series.