New Sharjah free zone hopes to attract research and development investment

Sharjah's bold plan to become a technology research and development hub will help the region break free of the 'pessimistic' mindset about R&D in the Arab world.

Hussain Al Mahmoudi, the chief executive of AUS Enterprises, which is setting up the new R&D free zone in Sharjah. David Parry / The National

All the research confirms it: R&D is in a sorry state in the Middle East. Arab countries spend an average of just 0.3 per cent of their GDP on research and development (R&D) compared with the worldwide rate of 2.1 per cent, according to the MIT Technology Review.

But the UAE is leading the charge in boosting spending on technological innovation – with plans for at least two new developments focused on it.

Masdar, Abu Dhabi’s sustainable city and renewable energy company, said this month it is building an R&D hub as part of its five-year expansion plan.

And Sharjah is planning an entire free zone dedicated to R&D. The AUS Research, Technology and Innovation (RTI) Park, an initiative of a holding company linked to the American University of Sharjah, hopes to welcome 200 companies in its first phase of development, which is due for completion in 2018.

“This is the right time to start planting the seeds for real R&D,” says Hussain Al Mahmoudi, the chief executive of AUS Enterprises, which is managing the project. “This park will eventually be the place where both the education institutions, the private sector and the government can come together and try to create something.”

Sharjah’s new free zone hopes to attract R&D activity in six areas including technology, transport, environment and energy. Mr Mahmoudi explains how Sharjah hopes to break free of the “pessimistic” mindset about R&D in the wider Arab world.

Statistics point to a very low rate of spending on R&D in the Arab world. Does that mark a challenge or opportunity for your initiative?

The thing with the Arab world is that we are really weak in capturing the figures. If we look at just how much we spent on R&D, I’m sure we will be shocked. I think – and I can only talk about the UAE – that the commitment of the government is very solid in identifying research and development as the next enabler for the UAE economy. We are at a stage where we believe that we need to, as a country, build the right ecosystem to support science and R&D. So I don’t think it’s going to stay only in the West.

Do you have any companies signed up to join the RTI free zone yet?

No we haven’t really reached that stage yet. We are at the phase where we are finalising the master plan. But we are in discussions with global companies that see an interest in being part of this ecosystem. We are also talking with leading local multinationals. It’s a big challenge, there’s no doubt about it. Because the mindset of a lot of people is that R&D has to be done somewhere else, and that we are not equipped or ready for that.

Tell us more about the attitudes to R&D in the wider region.

I think the mindset in the general Arab world is very pessimistic about our capabilities of developing R&D. But the mindset of the UAE government and the people of the UAE is completely different. We know the mandate of the UAE government: to be the No 1 across the world. And this is the direction – to become more competitive, to use technology and research and development as an enabler to compete on a global level. And that’s why you see projects like ours. If we move back in Arab history, we were leading in science; we have heritage. We only need to revive that heritage and bring it back by adopting best practices, and by working with partners from all over the world, and from different sectors, whether academia or private sector, NGOs or government.

The Facebooks and Googles of this world both set up shop in Dubai. How do you hope to attract such international companies to Sharjah?

We don’t have a competition against Dubai. We actually complement each other. So the offices that you see in Dubai, for example from Google or Microsoft, are meant to be there because these are sales, marketing and business development offices. But we are talking about a different aspect of these companies – the research and development, the innovation centres. And for this, companies have specific requirements. A key one is a thriving academic environment – something Sharjah, I believe, can provide. These companies need young students, they need engineering graduates, they need engineering colleges, they need labs – they need the whole environment.

While we are targeting leading brands and global brands, we also want to go and target the next ones that are coming. There are many game-changing companies that exist in the world that are not necessarily the size of Google.

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