GRM 2010 GRM 2011

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Sustainable Prosperity through Innovation: Developing and Implementing an Innovation System in Abu Dhabi
Paper Proposal Text :
The Gulf Cooperation Council (GCC) countries have undergone major economic and social transformation over the last decades. Standards of living have risen substantially across the region as governments continue to invest in infrastructure, social services, healthcare and education. Nonetheless, GCC countries remain heavily dependent on revenue from natural resources, notably oil and gas, and are also characterized by large public sectors. In order to sustain current levels of prosperity, GCC countries must develop and utilize knowledge resources to diversify their economies and create new jobs for their young and increasingly well-educated populations.
During the past several years, GCC countries have been striving to develop national visions to progress their respective economic diversification agendas. The United Arab Emirates (UAE) is a GCC country with a diversification agenda that emphasizes the development of an internationally competitive and resilient economy. Each of the UAE’s seven Emirates, however, has a distinct economic structure and hence different contribution to the nation’s diversification agenda. The Emirate of Abu Dhabi holds the majority of the UAE’s hydrocarbon resources and thus has an extremely prosperous economy that is dependent on oil and gas export. Extraction and export of Abu Dhabi’s hydrocarbon reserves generates significant government revenue and to date these revenues have been invested largely in infrastructure and real estate. However, Abu Dhabi has recently entered into a reform phase with primary emphasis placed on diversifying the economy away from dependency on oil and gas and toward investment in people, innovation and the development of a Knowledge-Based Economy (KBE). In fact, Abu Dhabi has established an economic vision for 2030 that outlines a comprehensive plan for the diversification of the Emirate’s economy and a significant increase in the non-oil sector’s contribution to the Emirate’s Gross Domestic Product (GDP) by the year 2030.
Development of the strategy for Abu Dhabi’s innovation-based economic diversification and growth requires consideration of the way that knowledge is developed and flows between people and between institutions in the Emirate. It is therefore important to examine the different components of Abu Dhabi’s knowledge chain and the innovation system. For Abu Dhabi and natural other resource economies (NRE), the processes and outputs of innovation are rather different from those of most countries. Abu Dhabi’s economic activity has historically been weakly connected with research and development (R&D) and technology-based entrepreneurship and instead characterized by a very large public sector and capital intensive industry. These characteristics give natural preference to large-scale economic activities, such as construction and manufacturing, with government playing the dominant role through procurement and establishment of state owned enterprises (SOEs). Small private companies become naturally disadvantaged due to lack of scale and bargaining power. Against this background, Abu Dhabi is developing an innovation system model that emphasizes greater responsiveness to demand along with linkages between large and small companies. This model is part of the Emirate’s Science, Technology, and Innovation (STI) strategy that will be implemented in series of 5-year plans, the first of which is soon to be launched. This overarching STI plan focuses on specific initiatives within the themes of enterprise development, research and development, and human capital.
This paper examines the current state of STI in Abu Dhabi and the STI initiatives being developed to help Abu Dhabi achieve its economic vision for 2030. The findings indicate that Abu Dhabi’s approach to STI is generally well structured, accounting for the local economic and social context. However, the strategy is yet to be implemented and so Abu Dhabi needs move forward, starting with implementation of those elements that support a coordinated, coherent, “whole-of-government” approach that puts innovation and industry and the center of the economic agenda. Specifically, the implementation of a top-level government advisory body to guide and oversee innovation activity in the Emirate and a central innovation portfolio management body to manage innovation are recommended priorities for Abu Dhabi.