Innovation vital to economic diversification

The resource-rich GCC economies have made significant investments in human capital over the last years, but have yet to reap the full innovation benefits from these actions. Weaknesses in knowledge and technology output such as lack of patents,  have impacted their performance, according to GII lead researcher and and Project Manager at INSEAD eLab, Daniela Benavente.

Potential to improve

Qatar, the United Arab Emirates, Saudi Arabia, Bahrain, Oman, and Kuwait rated 10 percent below the trend line and were among a host of resource-rich, high-income “innovation underperformers” when comparing GII performance against GDP per capita. Middle-income earners in this group include Iran, Syria, Algeria and Yemen. These economies all have the potential for improving their innovation systems on the basis of their income levels, said Benavente. "It's a trend in many resource rich countries., maybe there is some crowding out of innovative investments, or maybe its related to strong GDP." 

Economies start by getting inputs in place before really taking off, Benavente said, noting GCC countries rated very well in these areas. "You start by getting small pockets of excellence then there is a multiplier affect to pull the rest of the economy ."