MAHROUM Sami,
ALSALEH Yasser, KANHERE Meera
The Innovation Capabilities of Nations: Five Key Performance Measures
القدرات الابتكارية للدول: خمسة مقاييس للأداء
INSEAD Innovation Policy Report commissioned by the Emirates Competitiveness Council (ECC) and the
Competitiveness Office of Abu Dhabi (COAD) in the Department of Economic
Development Abu Dhabi.
[Report available in
English or in
Arabic]
Innovation is rarely pursued for its own sake; rather it has the ultimate
objective of creating new socioeconomic value. The ability to innovate can thus
be observed in systemic activities pursued to create new socio-economic value.
In this report, we adopt a framework that measures innovation capability via a
set of five key indicators: the abilities to access, anchor, diffuse, create and
exploit knowledge. Economies can draw on any combination of these to create new
socio-economic value. The report finds that the UAE has a mixed record on these
five innovation capability pillars . On the one hand, it shows a significant
ability to access knowledge from around the world. This can be attributed to its
adoption of advanced information and communication technologies (ICT), and the
presence of a strong cosmopolitan talent pool and a host of international
enterprises. Likewise, the UAE appears to enjoy a strong knowledge anchoring
ability assisted by a relatively investment-friendly environment and ease of
doing business. With the rapid development of its human capital, it also attains
an excellent level in the diffusion of new knowledge, skills and techniques in
the economy. On the other, where the UAE still has room for improvement is in
its ability to create new knowledge and, to a lesser extent, in its ability to
commercially exploit innovations. Aware of the need for further improvement
along these two dimensions, the government has launched several initiatives to
support entrepreneurs and build the environment required to encourage start-ups,
such as the Khalifa Fund for Enterprise Development in Abu Dhabi, the Mohammed
Bin Rashid Establishment For Young Business Leaders in Dubai as well as numerous
initiatives to foster R&D and innovation. This report compares eight select
GFCC member countries along the five innovation capability pillars in terms of
their capacity, performance and efficacy. This is important because an economy
can boast strong innovation capabilities but may not be fully exploiting them.
The countries concerned, namely Australia, Brazil, Egypt, Russia, Saudi Arabia,
South Korea, the UAE and the USA, offer a variety of models that perform
differently due to multiple factors, some of which are not limited to their
innovation capacity such as location, the nature and availability of resources,
size of population and global integration. The UAE, along with Australia, South
Korea and the USA, leads the other featured GFCC countries in terms of its
capacity to access new knowledge from around the world. Despite this high access
capacity, the performance of resource-rich economies such as the UAE and
Australia remains somewhat modest due to the high share of natural resource
commodities in their international trade. In terms of the capability to anchor
knowledge, the USA, Australia and the UAE emerge as the most attractive
destinations for foreign talent and foreign investments, both in terms of their
potential capacity and actual performance. It is worth mentioning that the UAE
is particularly efficacious in this respect. While industrial economies such as
those of the USA, South Korea and Australia lead the rest of the pack in their
ability to diffuse knowledge to different parts of their economies, the
resource-rich countries, with the exception of the UAE and Saudi Arabia, still
have room for improvement in this regard. In terms of the capability to create
new knowledge domestically, the USA remains the leader in output, with other
industrialised countries such as Australia and South Korea close behind. The USA
is also clearly ahead in terms of exploiting knowledge, with the UAE, Australia
and South Korea catching up.
