Realizing the Vision: Research, development and innovation mandates in the GCC has been saved
Realizing the Vision: Research, development and innovation mandates in the GCC
ME PoV Fall 2019 issue
Today, every country in the Gulf Cooperation Council (GCC) has developed a national vision or strategy that looks into a post-oil future and imagines a thriving knowledge-based economy with globally competitive skills and capabilities in a few priority sectors. A recurring theme across all these national vision documents is a focus on improving the research, development and innovation (RDI) ecosystem. To appropriately support the development of their RDI ecosystems, GCC countries must create a national agenda around which these activities can flourish. This must involve first identifying and focusing on priority sectors with high value-added growth potential. Once these sectors have been identified, policy-makers, academia and the private sector must answer the question: how can RDI most effectively be exploited to generate optimal benefits for society and the economy?
Moving towards a knowledge-based economy and creating a culture of innovation requires an effective RDI ecosystem with prominent roles for universities, industry, government, and civil society. It requires an appreciation of the role that RDI plays in national growth. It requires a rich vein of basic research that transforms into applied research, and that in turn leads to the development and commercialization of new technologies and business advancements.
This research, and its commercialization, enables countries to both develop a knowledge-based economy and create competitive advantages within particular economic sectors. One effective way of doing this is creating a national reserach and development (R&D) mandate.
National RDI Mandate
A national RDI mandate defines an ambitious, tangible, long-term target for the country and steers public policy and institutions to work towards and deliver the target. The most famous example of a national R&D mandate is President John F. Kennedy’s Apollo program, which aimed to put a man on the moon. The mandate focused the energies of the state, academia, and the private sector towards delivering a visible, tangible, and ambitious national goal and generated excitement and advances across disciplines and industries.
RDI mandates strengthen innovation ecosystems and make them more competitive. While the mandate depends on national priorities, its goal is simple: enable rapid advances across science and technology and make the nation a global leader in a specific area. Mandates create a specific national objective, establish coordination among government entities, increase collaboration with industry and define relevant budgetary and financial allocations.
Nations have also enacted RDI mandates to establish themselves as leaders in new science and technology sectors of global interest and within the past few years have begun to compete for leadership in artificial intelligence (AI) R&D. An executive order was signed in the United States mandating federal agencies to increase their research and development focus on relevant use cases for artificial intelligence and promoting sustained investment in AI RDI with industry, academic and international partners.1
What makes a strong national RDI mandate?
- A specific, tangible and ambitious goal
- Coordination and collaboration across academic disciplines and industries
- Embedding the mandate across applicable government departments
- National publicity
- Widespread coordination among public and private sector stakeholders
- Call to action for participation
Opportunities for an RDI mandate in the GCC
In many GCC countries, a range of challenges inhibits the strength and growth of the RDI ecosystem. These challenges revolve around three main themes: funding, collaboration, and culture and support systems. By enacting an RDI mandate, GCC countries have the opportunity to tackle these challenges while simultaneously supporting economic output.
The availability and reliability of funding is a primary challenge. A major reason why researchers struggle to secure funding is that both public and private sector entities within the GCC fail to provide the appropriate financial commitments. Between 2007 and 2016, GCC countries spent less than 1 percent of their GDP on R&D expenditure, which pales in comparison to leading global nations (see Chart 1 below).
While the RDI mandate will initially focus on increasing government expenditure in R&D, structures and mechanisms will need to be set up to incentivize and attract spending through other sources such as the private sector. A coordinated effort by the government will help galvanize investment in an identified priority sector. This increased funding will help create the foundations (equipment, training, facilities) that allow researchers to make breakthroughs and enable the creation of better products and services to drive growth in the economy. As the sector becomes more innovative, it is also likely to generate increasing returns as improved economies of scale will enable greater utilization of resources and specialization of skills.
In addition to funding, insufficient collaboration across national RDI systems, particularly between university researchers and private sector entities, is a significant challenge within GCC countries. Many researchers are unable to align their projects with market needs due to minimal interaction with the private sector.
As evidence of this, a survey conducted by the World Economic Forum shows that businesses in the GCC felt there was far less collaboration between universities and businesses in R&D than is typically seen in more mature R&D ecosystems.
RDI in GCC country strategies
United Arab Emirates: “Scientists of today are the makers of tomorrow and the essence of this nation; fostering them is a key tool to turn creativity and innovation into reality and the best investment towards creating a brighter future for us and the world around us,” said His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai.
Saudi Arabia: The KSA government has committed to invest six billion Riyals by 2020 to enhance the capacity and capability of Saudi publicly-funded universities to conduct high quality and high impact R&D. “We believe in human capital and human resource investment as essential whether at a Master’s degree or a PhD level, and we aim to improve and develop university infrastructure,” said Dr. Hisham Alhadlaq, the director general of the Ministry of Education’s Research and Development Office.
Qatar National Vision: “Our goal is to be a regional driving force for innovation—an innovation destination,” said Hayfa Al-Abdulla, Innovation Director at Qatar Science & Technology Park.
Oman: “In order to harmonize the sultanate’s efforts across all sectors and achieve integration, innovation has become an essential pillar for Oman Vision 2040,” said Dr. Hilal al Hinai, secretary general of The Research Council (TRC).
New Kuwait: “Driven by New Kuwait 2035, the next-generation value economy is about being inspired to innovate using intelligent technologies,” said Ahmed Al-Faifi, Senior Vice President and Managing Director of SAP Middle East North.
Enacting a clear RDI mandate with a focus on a specific economic priority sector will enable this type of collaboration in multiple ways. Actors within RDI working in parallel will better recognize the importance and necessity of collaborating to generate innovative ideas and solve challenging problems. As RDI improves and matures within the sector, companies will increasingly recognize the strength of R&D in the sector and become more interested in partnering with university researchers for their own R&D activities. As the private sector becomes more involved in RDI and recognizes the value of utilizing GCC resources, research in GCC countries is likely to become increasingly demand-led and financed by industry.
An RDI mandate will also enable greater cross-governmental collaboration, as government entities must align their goals and priorities in order to work towards achieving a shared, tangible target. Government entities may also recognize the benefits of reviewing current incentives and protection measures to encourage the private sector to become more responsive to market needs and more efficient through innovative propositions and business models.
RDI around the world
In 2009, Singapore set a national ambition to improve energy intensity by 35 percent by 2030 as part of its Sustainable Singapore Blueprint. In 2011, the Chairman of the Singapore Economic Development Board announced that the National Research Foundation would allocate S$195 million (US$142.7 million) for five years for the clear-energy sector.2 This fund helped:
China has used, and is using,RDI mandates to transform and establish itself as a globally leading innovation-based economy. China initiated the 863 Program in March 1986 with the goal of narrowing the country’s technology gap through the development and adoption of advanced technologies in a variety of sectors in order to reduce foreign dependence.4
By 2000 many new technologies had directly or indirectly assisted in China’s development, with over 200 billion Yuan of economic return (US$28.9 billion) gained from program investments.5
In 2015, the country announced the Made in China 2025 initiative, aiming to position China as the global leader in high-technology industries.6
Culture and support systems
Finally, a major challenge in the RDI ecosystem is the lack of an innovation culture within GCC countries. Hofstede’s Values, a framework that describes elements of a given society’s culture, shows that GCC countries have low individualism, high uncertainty avoidance, and high power distance (i.e. hierarchical structure) scores, which are three key elements of innovation.
These cultural expectations within GCC countries significantly affect the quality of RDI support systems. At many GCC universities, performance measures for researchers focus primarily on the quantity of publications and citations created, while largely disregarding and de-emphasizing the development of research through licensing, commercialization, or spin-offs. Additionally, trainings for the development of innovative ideas and programs for supporting new businesses are limited. As a result, there are far fewer start-ups within GCC populations compared to leading nations.
An RDI mandate could leverage the country’s national strategy to drive innovation and start-up creation in key industries. GCC nationals, particularly the younger generation, are highly motivated to contribute to the economic and social progress of their respective countries. An RDI mandate could help stimulate these individuals and focus their skill sets in more productive, innovative ways. While GCC universities could play a significant role in these efforts, it would require a shift in focus from publications to commercialization and a greater focus on building entrepreneurial skills within those universities in close collaboration with the private sector.
As GCC countries look toward the future, the need for economic diversification is clear. Adopting an RDI mandate is one approach to help grow priority sectors and create a knowledge-based economy. Not only will an RDI mandate tackle critical challenges regarding funding, collaboration and support systems, it will also energize the nation to work together towards a common vision of growth and global competitiveness.
GCC countries have the resources to invest in such a mandate: universities are equipped with high-quality faculty and infrastructure, the political and institutional structures of the country enable long-term planning and stability, and the region has the wealth to invest in such an endeavor. Imagine what could be achieved if the intellectual, political, social, and economic capital available in a country could be targeted towards one goal.
by Aydin Akca, Partner, Consulting, Bilal Mansour, Senior Manager, Consulting, and Laura Jepson, Manager, Consulting, Deloitte Middle East
- thehill.com/policy/technology/429465-trump-signs-executive-order-boosting-artificial-intelligence, dx.doi.org/10.2139/ssrn.2961060