International Organisation for Knowledge Economy and Enterprise Development

Activities

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..:: Innovation Systems for Natural Resource Rich Economies
IKED has carried out analysis and research to help put in place better ways to measure progress in the transition of Natural Resource-based Economies (NREs) towards Knowledge-Based Economies (KBE). Among its key projects, IKED has worked with the central authorities of Abu Dhabi on the development of an innovation index tailored to reflecting progress on the specific challenges confronting NREs.

While Abu Dhabi has moved beyond the middle-income economy status and now represents one of the most dynamic capitals and regions of the world, it still owes much of its stance to the export revenue generated by so far ample oil resources. Sustained high oil prices in recent years helped boost Abu Dhabi's budget and trade surpluses and foreign reserves. Despite this, the Emirate's leaders have embraced an ambitious strategy to establish a stronger base for its growth and sustainable development, through a secure, open and dynamic economy, empowerment of the private sector, and an innovation-led knowledge-based economy.

By measuring innovation and its impacts in ways that are relevant for Natural Resource Rich Economies (NREs), and through comparison and benchmarking between such economies, the research team gauged to what extent Abu Dhabi is confronted with gaps in terms of unfulfilled potential for innovation and growth. A groundbreaking pilot innovation survey, based on and adapted from the CIS (Community Innovation Survey) template to fit the Abu Dhabi context specifically, was run in close collaboration with the Statistics Center - Abu Dhabi (SCAD). This survey, similarly to the introduction of an innovation index, represents groundbreaking work not only for Abu Dhabi, but for the Gulf as a whole.

Meanwhile, the local authorities, under the aegis of the General Secretariat of the Executive Council (GSEC), organised the entire project with the view how to maximize its relevance from a policy perspective, engaging all the main stakeholders of Abu Dhabi for a participatory approach, not just top-down structuring and leadership.

IKED's report, presented on the 16th of May 2010 in Abu Dhabi, includes a precise and candid characterisation of the gaps that are currently limiting the potential for innovation in Abu Dhabi. On this account, the following factors are highlighted:

1. Lack of economic diversification
2. High turnover of the expatriate “creative class”
3. Weak ties among talented individuals belonging to different organizations
4. Absence of a policy for wellbeing and an environmentally-sound and sustainable economy and society
5. Weaknesses in conditions for opportunity-based entrepreneurship
6. Lack of research culture and weaknesses in technical innovation
7. Failure to mobilise human resources and investments to match opportunities for economic and business development
8. Need of strengthening in governance and collaboration to underpin consistency in regard to innovation.

Along the way, the study presents in-depth international benchmarking of Abu Dhabi’s innovation performance. Based on an index for measurement of performance relative to comparator economies, IKED concludes on the presence of strengths for Abu Dhabi in anchoring knowledge, but that other deficiencies, e.g., in knowledge diffusion, exploitation, and absorption, downplay performances below potential. It should be emphasised that Abu Dhabi in this respect compares itself with the strongest competitors around. Its policy objectives are ambitious and set for a radical breakthrough in new organisation and competitiveness.

In the next stage of work, prepared in close consultation with the Department of Economic Development (DED) and the Statistics Center-Abu Dhabi, apart from the GSEC, IKED stands ready to deepen the policy analysis of how to design and implement key reforms that can help pave the way for a genuinely knowledge-based economy in Abu Dhabi, as well as to assist SCAD in launching a full-fledged community innovation survey, for Abu Dhabi and also the UAE as a whole.  Following positive expressions of interest from other parts of the world, including the UN Commission for Science and Technology, ways should be tested to deepen policy-benchmarking with other natural-resource based economies.

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