Coherent linkages: How to foster innovation-based economies in the Gulf Cooperation Council

Executive summary

Developed countries around the world with strong innovation cultures have succeeded by linking people, capital, and research to introduce novelty and create economic value. These countries have an effective integrated network of stakeholders that foster an environment that can transform ideas into successful outcomes. The web of stakeholders acts as a vibrant innovation ecosystem. This system, rather than specific institutions focused on a single discipline, spurs widespread economic activity, drives efficiency and productivity, and increases overall standards of living. Countries with strong innovation capabilities have resilient economies that can withstand periodic economic shocks to individual sectors.

In recent years, the countries of the Gulf Cooperation Council1 (GCC) have embarked on a series of reforms and initiatives targeted at immediate challenges within their innovation systems. These challenges include the need to cultivate human capital and to promote research and development (R&D). These countries are also developing traditional sectors (such as oil and gas, petrochemicals, basic industries, and water desalination) and nascent ones (including aerospace, healthcare, and renewable energy). The GCC has made significant progress in a relatively short time.

To ensure further progress in these efforts, the GCC countries must now institute a national model that establishes coherent linkages in their innovation systems. This involves forging strong ties among all stakeholders in the innovation ecosystem (which encompasses policies, operations, and all stakeholders). This is vital for the GCC states, which have rich natural resource endowments, large governments, and a need to diversify their economic base. Policymakers in the GCC are well aware that the resource endowment is finite. They know that they need to invest the current windfall wisely in developing knowledgebased economies.

The crucial mechanism required is an innovation-promotion entity. This body establishes and develops the necessary linkages, coordinates policy, convenes stakeholders, and drives the national agenda.

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GCC countries recognize the need for innovation as the main catalyst for achieving sustainable economic growth through economic diversification. As they advance in this direction, they must carefully follow the steps of successful economies such as Taiwan, South Korea, and Singapore. These economies have progressed in their efforts over the course of many decades. Although the GCC may require a similar time frame, it has two major advantages. First, it can use its substantial resource endowment to finance carefully selected initiatives. Second, it can learn from the experiences of innovation leaders and replicate some of the ways they have engaged stakeholders.

Governments have an important role to play as the conveners of stakeholders and coordinators of efforts across all socioeconomic sectors, public and private. The GCC countries need to develop strong links among their policies, stakeholders, and operations. To translate policy mandates to the innovation landscape, the GCC nations will need to ensure that their promotion entities follow detailed design activities that engage and link the stakeholders. These links are the sinews of inventiveness, ensuring that a healthy and lively innovation ecosystem emerges.