The Middle East has become an active innovation centre as companies pursue new technology outside their traditional areas of strength such as artificial intelligence and machine learning, according to a survey by the Boston Consulting Group.
The study, which was released this month, said 58 per cent of companies in the region are "committed innovators", compared with the global average of 45 per cent.
It also found that 63 per cent of Middle Eastern companies consider innovation to be one of their top three priorities, compared with the global average of 66 per cent, while about 57 per cent of local companies said they intend to boost their investment in innovation.
The consultancy assessed the performance of companies according to four criteria: industry disruption, value creation, peer views and global perception.
It said Middle Eastern economies are “newer, re-energised and motivated players” in the innovation game.
The BCG report said the region is home to some of the most committed innovators and has become a “melting pot for multinational corporations and leading global academic institutions”.
“Middle Eastern governments and private institutions have established global partnerships that serve the innovation agenda,” it said.
Regional executives said they follow global best practice in pursuing innovation. They scored their own companies’ innovation maturity at 71 per cent, compared to 72 per cent for Chinese respondents.
German executives scored their innovation maturity at 64 per cent, compared to 61 per cent for respondents in the US and 59 per cent for executives in Japan and the UK.
BCG interviewed 2,500 executives during the survey, with 63 per cent of the respondents being senior executives while 37 per cent were at the level of senior vice president or vice-president.
The study named Saudi Aramco as the region’s top innovator, due to its efforts to reimagine the internal combustion engine of the future.
One of Aramco’s initiatives includes its work in the field of mobile carbon capture, a technology that can capture up to 25 per cent of the carbon dioxide emitted by vehicles. The oil company intends to raise that threshold to 50 per cent.
Aramco was followed by Dubai’s Emirates airline and Saudi petrochemicals operator Sabic.
BCG said innovators in the Middle East have significant resources at their disposal and are backed by regional transformation programmes such as the UAE Vision 2021 and Saudi Arabia Vision 2030, which focus on the adoption of new technology and innovation amid a push to reduce their reliance on hydrocarbons.
The report said the region’s large young population is accelerating the adoption of new work models and advanced technologies, such as machine learning and AI.
“Another advantage is that Middle Eastern companies are good at marrying global innovations with local knowledge and experience to create new markets and substantial value … and then attracting global interest to the region,” it said.
BCG highlighted the $3 billion acquisition of Careem by Uber last year and the buyout of local e-commerce site Souq by Amazon for $580m in 2017 as examples of the region making headway on the innovation front.