Blogs

Innovation initiatives across the Arab world are growing, often through innovation clusters, IT hubs, and national champions. One goal is to create a concentration or “spikiness” of innovation efforts. Such patterns are also prevalent globally and range from more state-centric approaches such as in China’s Guangdong Province to innovation hubs in the United States, which have evolved hand-in-hand with research universities and institutions supporting an entrepreneurial community. National champions play a critical part. In the Republic of Korea, for example, Samsung, LG, and SK Energy have played an important role in innovation hubs and cluster development.

Successful Technoparks in Tunisia and Dubai

Launched in 1999, Tunisia's Elgazala Technopark is a highly diversified innovation ecosystem with a business incubator, an ICT-focused research center, and telecommunications schools and research divisions. Co-located in Elgazala are the National Electronic Certification Agency and other national agencies that serve ICT companies. Also in the Technopark are 100 firms, including 13 multinationals. Synergies and collaboration across firms and universities have been promoted with the help of technology transfer mechanisms from multinationals to national small and medium enterprises. Linkages with the global economy have resulted in more than 30 percent of firms exporting total production; more than 75 percent of technological production in software and IT solutions and services is exported. In 2008, the Tunisian government decided to replicate Elgazala's success and created two new areas, Ariana and Manouba, near Tunis; this approach may be expanded to other sectors as well.

Adopting a similar hub approach, Dubai first created a regional transport and tourism hub and innovation hubs and then transitioned into various knowledge-based industries. Under the Vision 2010 plan, projects include Dubai Internet City and Technology Park, Dubai Industrial City, Dubai Financial City, Dubai Tech, and Dubai Silicon Oasis. The hubs have resulted in a growing share of financial services, manufacturing, transport, storage, and communications in GDP; oil shares in GDP declined from 18 percent in 1995, to less than 2 percent in 2011.

Saudi Arabia's Innovation National Champions

Launched in 2001, the Dhahran Techno-Valley (DTV) is designed to support energy-related technology development by deepening links between King Fahd University of Petroleum and Minerals (KFUPM) —the hub’s academic anchor—and the energy industry. The King Abdullah Bin Abdulaziz Science Park (KASP) also plays a critical role. The DTV Company, a wholly-owned KFUPM subsidiary, operates KASP and promotes linkages between multinational companies and national enterprise champions such as Saudi Aramco and SABIC. KASP focuses on finding innovative solutions to energy priorities. More than 50 patents have been filed in the park to date.

Lessons Learned

Challenges and opportunities facing these initiatives include:

• The need for efficient government action to create needed infrastructure, provide sufficient incentives, improve the legal framework, and encourage investments in research and education.
• Strong collaboration between industry and academic and research institutions to boost local workforce skills and generate new ideas and spinoffs.
• Globalization of hubs through foreign direct investment, high-quality standards, export promotion, and international branding to help link the activities with global value chains and markets.
• Leveraging local competitive advantages in skills, locations, and other capabilities.
• Continuous efforts to raise the sophistication and diversification of activities.

Read Part I

Julia Devlin is nonresident senior fellow in the Global Economy and Development program at Brookings Institution. She formerly worked as consultant at the World Bank Group and as a lecturer in economics at the University of Virginia. Her focus is economic development, private sector development, energy and trade in the Middle East and North Africa. She holds a Ph.D. in Economics.