As a result of their abundant oil and gas sector earnings, the six states of the Gulf Cooperation Council have sustained rapid economic growth over the course of several decades now. Having largely managed to weather the global financial crisis, the GCC states have risen to rank amongst the top-tier of the global wealthy. While economists debate the causal link between natural resource endowment and positive growth, and have in fact argued that rentier nations are prone to suffer negative economic consequences, in the GCC oil and gas endowments have undeniably resulted in prosperity and development. However, their overwhelming dependence on natural resource earnings has certainly exerted a toll on the structure of the six state’s economies. The veracity of the “resource curse” thesis continues to be a subject of scholarly debate. Across the states of the GCC, nonetheless, the ease and availability of inordinate financial windfalls from hydrocarbon rents do indeed appear to have undermined the potential for both political development and scientific progress.
Across the region, economies remain noticeably undiversified, and the hydrocarbon sector dominates over all other sectors. Oil and gas revenues account for about 50 percent of GDP and 95 percent of exports in Kuwait, and more than 50 percent of GDP and roughly 85 percent of exports in Qatar. The petroleum sector accounts for roughly 80 percent of budget revenues in Saudi Arabia. For decades, there has been discussion on the need to move away from such dependency on the oil and gas sector, and to develop a healthier, more balanced economy. The case of Bahrain, with its dwindling oil revenues and inability to successfully transition to a post-oil economy, highlights the region-wide concern regarding long-term sustainability of the current economic development model.
Despite boasting per capita incomes to rival the most developed countries of the world, the Gulf has not kept pace with rapidly evolving technological and scientific achievements taking place elsewhere. The GCC lags behind other similarly wealthy parts of the world in educational advancement, in knowledge production, and in research output. Research capacity indicators, such as the 2006 Global Competitiveness Index, have shown competitive disadvantages for the GCC countries. Specifically mentioned are the inferiority of scientific research institutions, the lack of industry-university collaborations, the limited availability of scientists and engineers, and inadequate spending on research and development. Generally, the Gulf states have been written off as lacking in innovation and human capacity. In order to advance beyond the resource-driven economy, broad-scale developments are needed in education, human capacity, research, innovation and enterprise development. While GCC investment in these sectors was previously considered inadequate, the past decade has seen a surge in interest in boosting these sectors.
The GCC states are increasingly speaking of their aspiration to develop knowledge-based economies, with the understanding that the region will soon have to move to a post-oil stage, and has to also participate as a greater contributor to global intellectual achievement. The establishment of “education” or “knowledge” cities across the region demonstrates state-driven initiatives to create future knowledge-based industries. How are these publically-funded efforts impacting on Gulf societies, and are they visibly paying off in technological development as well as economic achievement? What is motivating the states of the GCC to develop knowledge-based economies beyond the articulated need to economically diversify? Are there socio-political dimensions that need to be considered? What are particular political, economic and social characteristics of the adopting states, which either preclude or enable policies for innovation?
Currently there is limited scholarship available on the subject of innovation in the Gulf. A few studies have been undertaken to examine some of the innovative efforts undertaken by the various GCC states. But a deep, multi-disciplinary academic exploration on the subject is absent. To fill this gap, CIRS is undertaking a multi-year research initiative entitled “Innovation in the Gulf”. Our goal is to explore questions related to the topic of innovation in the Gulf region through funding empirically-grounded, theoretically informed research proposals.
Areas of Inquiry:
The following include a small sample of potential areas of analysis to be covered through this research initiative:
- Can non-democratic societies develop effective growth in technology and innovation promotion? Empirical evidence tends to suggest a positive correlation between democracy and technological development, with the assumption that political rights are conducive to growth in more advanced sectors of the economy. In the absence of meaningful political rights, can the GCC state still aim to promote innovation, technology, knowledge production, and knowledge dissemination?
- Broadly, what are the roles, consequences, and nature of state policies within each individual GCC state and among them in relation to fostering, or as the case might be impeding, innovation in science and technology?
- What are the nature and consequences of the phenomenon of “specialized” cities across the Gulf region? Such cities can be found across the globe, examples of which include Kerala’s Smart City and South Yorkshire in England. What is unique and innovative about the GCC’s specialized cities projects? What can initiatives such as Qatar’s Education City and the UAE’s Masdar City tell us about the phenomenon, and are such efforts useful means of promoting research, knowledge-generation, and innovation?
- What models or theoretical paradigms can help to explain the adoption of specific policies, choices, and programs by the various Gulf states in regards to innovation?
- What are the domestic, regional, and international factors that cause the GCC states to adopt new policies and programs in relation to innovation? What are the dynamics at play that propel some of the internal determinants for innovation to be more effective than others? How does public opinion impact the adoption of policies on innovation, knowledge production, and education? What impact do regional factors have? Have GCC states taken on these efforts in order to emulate neighboring states, in order to achieve a comparative advantage or avoid being disadvantaged?
- What are the impacts of such phenomena as religion, cultural resources, and traditional activities in terms of state policies on innovation adoption and diffusion? Resistance to innovation is sometimes encountered by segments of society because it calls into question existing business arrangements, or challenges the social and cultural milieu.
- What are the particular challenges faced by the GCC when building a skilled and flexible labor force while the region continues to be heavily dependent on external supply of labor? Skilled expatriate labor dominates certain sectors, and the transient nature of this skilled work-force means that there is limited long-term benefit to the GCC states.
- Explore the impact of local education reform and policies, as well as national liberalization initiatives, on kick-starting scientific and technological innovation across the region. Areas of analysis include the impact of globalization, internationalization, and trans-nationalization on educational endeavors and knowledge production in the Gulf region.
Article by Zahra Babar, Assistant Director of Research at CIRS