Transforming the United Arab Emirates into a knowledge‐based economy. The role of science, technology and innovation
| DOI | https://doi.org/10.1108/20425941311323109 |
| Pages | 84-102 |
| Published date | 01 February 2013 |
| Date | 01 February 2013 |
| Author | Allam Ahmed,Ibrahim M. Abdalla Alfaki |
| Subject Matter | Public policy & environmental management |
Transforming the
United Arab Emirates into a
knowledge-based economy
The role of science, technology and innovation
Allam Ahmed
Middle Eastern Knowledge Economy Institute (MEKEI), University of Brighton,
Brighton, UK and School of Business, Economics and Management,
University of Sussex, Brighton, UK, and
Ibrahim M. Abdalla Alfaki
Faculty of Business and Economics, United Arab Emirates University,
Al-Ain, UAE
Abstract
Purpose – This paper aims at exploring the role of science, technology and innovation (STI) in
transforming the United Arab Emirates (UAE) into a knowledge economy (KE) by initially assessing
the country’s achievements implementing the KE pillars. It further evaluates the country’s STI
capacity and competence in exercising adoption and diffusion of knowledge.
Design/methodology/approach – A situational analysis and a comparative approach were
exploited to describe the UAE’s position in terms of transition to a KE, highlighting weaknesses,
strengths and opportunities. Related discussions were supported by data made available from several
international sources. The country’s worldwide performance was particularly matched against that of
the other members of the Gulf Cooperation Council (GCC) together with two more Asian
transformation economies and also a few examples from other Arab and Muslim countries.
Findings – Apparently, the UAE has made important progress in the implementation of the KE
pillars and transitioning to the innovation-driven stage, particularly at the macro-economic
environment and quality of infrastructure levels, notably the ICTsecto r.However, the county is facing
several challenges that require concerted efforts and rigorous follow-up. For instance, the UAE is
lagging behind most transformation economies and some GCC countries when it comes to investment
in education and R&D activities. This hurdle impeded the country’s ability to absorb, adapt and create
new technology and knowledge. As a result, the country’s economy is experiencing a negative trade
balance in foreign technology transfer. The comparative and situational analysis methodology
adopted in the context concluded several lessons and policy remarks.
Originality/value – Using the most updated data, this exercise stems from the country’s need to
examine the current status, a necessary step for realization of new prospects and adoption and
application of future policies and programs.
Keywords Knowledge economy, STI, GCC countries, R&D, Assessment, United Arab Emirates
Paper type Research paper
1. Background and objectives
United Arab Emirates (UAE), a member state of the Gulf Cooperation Council (GCC),
has enjoyed an impressive economic growth over the last few years, with sustainable
rise in growth domestic product (GDP) per capita ranging from 18.5 thousands US
dollars in 1990 to 30.4 thousands in 2008, apparently coinciding with high oil revenues
and high growth in the labour force from 694.2 thousands in 1990 to 3.3 million in 2008
dominated by foreign workers (for more details see UAE Ministry of Economy annual
reports). UAE ranks within the top 40 countries in the latest HDI (third in the MENA
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WorldJour nal of Science, Technology
and Sustainable Development
Vol. 10 No. 2, 2013
pp. 84-102
rEmeraldGroup PublishingLimited
2042-5945
DOI 10.1108/20425941311323109
84
WJSTSD
10,2
region, after Saudi Arabia and Iran), such a good performance is argued by several
scholars as a good indicator for a strong economy and a well balanced.
Table I presents the performance of UAE against the rest of the world and Arab/
Muslim countries using different international indicators and measurements. These
various global indicators will help in understanding the position of UAE according to a
set of measures that are recognized internationa lly.
Using various international repor ts and databases, the above table compares the
UAE’s performance (world ranking) with the rest of the world with regard to the most
widely accepted indexes such as human development index (HDI)[1]; gross national
income (GNI)[2]; knowledge economy index (KEI)[3]; global innovation index (GII)[4];
global competitiveness index (GCI)[5]; and environmental performance index (EPI)[6].
Moreover realizing the wide knowledge gap between countries in the GCC region
and the developed world in the west and Asia and that stability and sustainability, not
only high growth and high returns, are vital for the development of the economy,
almost all members of the GCC are attempting diversification route that underscores
knowledge as the driving force in economic activities.
In addition to noticeable initiatives towards creating sustainable employment
opportunities for UAE nationals, the coun try has recently embarked on genuine
diversifications moves intended to reduce dependency on hydrocarbons and to ac hieve
the transition to a knowledge economy (KE). The process involved raising awareness
about the fundamental concepts of KE across the private and the public sectors in line
with the UAE vision 2021 and the federal strategy 2011-2013. By moving to innovation
and KE stage, the UAE can reap huge benefits in terms of economic growth, global
market reach and less dependence on a single commodity sector, currently, according
to the International Monetary Fund (IMF) data for 2007, oil exp orts represent
25.7 per cent of the country’s GDP, the least compared to other GCC countries. Further
envisaged KE benefits embrace socio-political stability and prosperity and enhanced
productivity as a result of injecting new skills into the labour force. It is notewor thy
that the current diversification trend in the UAE is dictating different pace across
the different emirates forming the union. The Emirate of Dubai, for example, has
succeeded in diversifying 90 per cent of its economy away from hydrocarbons,
while Abu Dhabi Emirate’s economy is still 66 per cent hydrocarbon-based
(see Wilson, 2010).
Countries HDI 2011 GNI 2011 KEI 2012 GII 2011 GCI 2012 EPI 2012
World top 0.943 – 9.43 63.82 5.74 76.69
World bottom 0.343 – 0.96 19.79 2.87 25.32
World average 0.682 10,082 5.12 – – –
Arab average 0.641 8,554 4.74 – – –
United Arab Emirates 0.846 59,993 6.94 41.99 4.89 50.91
Notes: HDI (Value – 187 countries); GNI (Constant 2005 PPP $ – 187 countries); KEI (Value – 146
countries); GII (Value – 125 countries); GCI (Score – 142 countries); EPI (Score – 132 countries)
Sources: Adopted from Human Development Report (2011), KEI (2011), INSEAD (2011), WISR (2006
and 2007), ITU World Telecommunication Indicators Database; Yale Centre for Environmental Law
and Policy (various years), Human Development Report (2006), World Economic Outlook Database
(2007) and World Economic Forum (WEF) (2006-2011)
Table I .
UAE performance
versus the world (latest
reports/data)
85
Transforming
the UAE
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