The leading business school in Europe has named the UAE the most innovative country in the Middle East, citing its robust technology infrastructure and high-quality education system. The UAE rose two spots this year to rank as the 24th most innovative country in the world, said Soumitra Dutta, the Roland Berger professor of business and technology at INSEAD and the author of the annual Global Innovation Index (GII) report that was released yesterday.
"There's a lot of creativity in the area. There's a lot of innovation happening in different ways than you might think," Mr Dutta said. "If you look at what Abu Dhabi is doing with Saadiyat Island and Dubai's various knowledge clusters, there might not be any patentable technology innovations per se, but they create value-adding changes in society at large." Mr Dutta said the index used a broader definition of innovation, other than just looking at investments in research and development (R&D) or the amount of patents published.
It dealt with parameters such as patents per million of population, publication of scientific journals, R&D expenditure, GDP output, market sophistication and the political environment. Elsewhere in the region, Kuwait's GII ranking fell three spots to 33rd; Qatar dropped 11 places to 35th and Bahrain lost six places to rank 40th. "GCC countries appear to be very concerned about changing the structures of their economies and diversifying away from oil," Mr Dutta said. "
In effect, that means to move into more knowledge-based sectors. "This becomes absolutely vital because if you don't innovate, don't create knowledge, don't create ideas, there is little hope for you to compete on the global stage." The UAE scored high marks in the index's technology infrastructure, investment in education, and knowledge application rankings, finishing eighth, 15th and third worldwide respectively.
"What you find is that a lot of enabling conditions [for innovation] is pretty strong in the UAE," Mr Dutta said. "That leads me to believe that the production of innovative output is going to continue." But he said the Emirates still had plenty of room to improve, pointing to the lack of press freedom in the country, the "bureaucratic burdens" in setting up a business and regulatory controls. Mr Dutta gave an example of how some Scandinavian countries and Singapore had built a strong infrastructure for creating innovative products and services, by continuously investing in its human capital.
"The overall message is the UAE has put a lot of effort in enabling the conditions required for innovation, now it has to push forward on creating more output," he said. "If you're weak in one or two enabling pillars of innovation, such as regulations or scientific institutions, you will perhaps not be able to get the right return of investments in this area." Several ventures in the UAE aimed at improving the level of entrepreneurship and R&D in the country, such as new programmes by the Mohammed bin Rashid Establishment for Small and Medium Size Enterprises, and Technopark, a free zone based in Jebel Ali, are already under way.
Other schemes to change the regulatory structure of how to start a business, as well as new bankruptcy legislation, are expected this year. Saudi Arabia notably fell 22 rankings to 54th place, due to a shift in the weighting of how a country's creative output factors in this year's index. "Saudi Arabia has a long way to improve," Mr Dutta said. "A lot of its knowledge outputs are pretty weak."