How fast can GCC economies integrate true innovation into growth?

The digital revolution creates opportunities for cities and nations to unleash new sources of innovation-led growth. R&D has gained additional momentum since the pandemic as the recipe to battle grand challenges and achieve long-term prosperity.

Geopolitical tensions, climate change agendas, and shifts in global trade are challenging key regional engines of growth. Economies in the GCC are acting on this imperative and putting forth bold plans to drive innovation agendas through setting ambitious targets, committing investments, creating dedicated innovation-focused governance, and activating detailed plans across priority sectors.

Transition to an innovation-led growth

Saudi Arabia is a prime example, now having recently unveiled a new program in research, development, and innovation that aims to add SR60 billion ($16 billion) to the GDP by 2040. The ensuing initiative is expected to create ‘high-value’ jobs in science and technology and further strengthen the Kingdom’s position as the Arab world’s biggest economy across health and wellness; sustainable environment and supply of essential needs; energy and industrial leadership; and economies of the future.

These will enhance the country’s global competitiveness and leadership, in line with the directions of Saudi Vision 2030, and strengthen its position as the largest economy in the region.

The UAE’s National Innovation Strategy provides a roadmap and comprehensive governance to steer a considerable R&D investment ( plus 1 percent of GDP) on seven priority sectors around renewable energy, transport, education, health, technology, water, and space. The strategy seeks to develop an environment that promotes and enables innovation by developing the right regulatory framework, providing comprehensive enabling services while enhancing the technology infrastructure, and ensuring the availability of investments and incentives.

Specifically, in Dubai, the recent launch of its R&D program is built around four priority clusters for health and well-being, environmental technology, smartly built infrastructure, and space and augmented human-machine intelligence with set aims to govern funding and investments, increase Dubai’s R&D expenditure and maximize the private sector’s engagement.

Path to Success

The bold plans and targets set forth at the national level imply significant growth that deems the private sector role an imperative for success. There needs to be decisive action from the government to put the ecosystem on the right path, including:

  • Taking a whole-of-ecosystem approach while including diverse organizations and actors (academia, national labs, startups, venture capital, and private equity, corporate anchors, and more).
  • Acknowledging the risk outlook and demonstrating a willingness to accept inherent uncertainties.
  • Acting agilely with a portfolio view by actively adjusting innovation pursuits.
  • Explicit focus on deep tech as the next frontier as data and AI are becoming table stakes with dedicated policy tools.
  • Fully embed climate and sustainability (C&S) into the top priorities of the national agenda, with concrete applications. As more than 50 percent of companies confirm that C&S is a Top 3 CEO priority (according to BCG’s 2022 Most Innovative Companies report), the actions and investments suggest a strong potential to improve in this area.

It is no coincidence innovation is and will remain a key driver for socio-economic growth as innovators create significantly more value (e.g., on average each year, 3.8 percent of total shareholder return difference between market and innovation leaders). Taking on national or global challenges and building sovereign capabilities to remain resilient during downtimes has also been imperative.

With the rather long-time frame for fruition, the higher risk of failure, and the agility needed to execute, nations must swiftly adapt their policy tools and drive an internal cultural shift to account for the new reality that will distinguish the leaders and laggers of the next decade.

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About the Author: John Ravenporton

John Ravenporton is a writer for many popular online publications. John is now our chief editor at DailyTechFeed. John specializes in Crypto, Software, Computer and Tech related articles.