Among the nations of the Middle East, the Gulf Cooperation Council (GCC) countries have historically relied on revenues from hydrocarbon exports to achieve increasing levels of economic prosperity. In order to sustain their current levels of prosperity, however, GCC countries have recognized that they must diversify their economies and create new jobs for their young and increasingly well-educated populations. Rapidly falling international oil prices in the past year have served to reinforce this need for economic diversification as government revenues across the region have fallen significantly.
During the past decade, GCC countries have been developing national strategies to accelerate their economic diversification agendas. The United Arab Emirates (UAE) is a GCC country with a diversification agenda that emphasizes the development of an internationally competitive and resilient economy. Each of the UAE’s seven Emirates, however, has a distinct economic structure and therefore requires its own approach to diversification. The Emirate of Dubai has for some time emphasized economic diversification focused on tourism, trading, services and finance. In contrast, the Emirate of Abu Dhabi is today relatively less diversified because it contains the majority of the UAE’s hydrocarbon resources and thus has an extremely prosperous economy from oil export revenues. However, Abu Dhabi has undertaken a number of strategic initiatives to diversify the economy away from natural resource dependence and towards the development of a knowledge-based economy that will provide continued economic and social prosperity in the coming decades.
The overarching framework for these initiatives is the Abu Dhabi Economic Vision 2030, which is a framework set forth by the government to diversify its economy into competitive regional and global industries. These industries include aviation, aerospace and defense; pharmaceuticals, biotechnology and life sciences; tourism; healthcare equipment and services; transportation, trade, and logistics; education; media; financial services; telecommunication services; energy; petrochemicals and metals. Based on history of successful economic transitions, Abu Dhabi has recognized that these sectors must become increasingly innovation-oriented and less reliant on the accumulation of labor and capital if they are to achieve long-term growth and competitiveness in international markets . The importance of innovation, however, has become a central focus of the entire UAE and not just Abu Dhabi. As a testament to the UAE’s overarching emphasis on competition by innovation, the country launched in 2014 a National Innovation Strategy (NIS), which organizes the country’s areas of targeted economic advancement into renewable energy, transportation, education, health, technology, water and space. These sectors are inclusive of those defined in the Abu Dhabi Economic Vision and move the UAE further toward a sustainable economic future.
In the UAE and elsewhere, innovation is the result of iterative efforts by multiple stakeholders and is enhanced by their interactions as part of an overarching innovation system or, as is commonly stated, an innovation “ecosystem” where human capital, physical and financial capital and research and development (R&D) thrive within the context of government policies and regulations that are complement market forces in allowing innovation to develop and thrive. For technology-intensive sectors, such as the majority of those being developed in Abu Dhabi, R&D is particularly important to produce the fundamental knowledge and new technologies that are foundational for technology innovation. The Masdar Institute of Science and Technology, or Masdar Institute, is a key vehicle for Abu Dhabi to achieve these foundational elements of innovation required for an economic transformation.
The Masdar Institute was launched by the Abu Dhabi government in 2007 to play a key role in achieving the UAE’s economic diversification goals. Developed in collaboration with the Massachusetts Institute of Technology (MIT), the Institute’s vision is to be a world-class graduate-level research and educational institution that provides leaders in advanced energy and sustainability and positions Abu Dhabi as a knowledge hub for socioeconomic growth. Within the context of this vision, Masdar Institute responds to the growing global need for products, services and solutions relating to renewable energy, water, environment and the fundamental material and information technologies that underpin economic growth. Its graduates become highly sought after specialists in engineering and science, providing the UAE with a high-value cadre of professionals to power its economy, while the research its students and faculty pursue yields valuable intellectual capital in the form of publications, patents, solutions for companies, startup companies and other services of relevance to the local and global economy.
Research, thus, is at the core of Masdar Institute. All students and faculty are required to dedicate a significant portion of their time to research projects with global impact in domains of regional importance. The Institute particularly focuses on research that is use-inspired but fundamental in nature so that leading-edge, new knowledge is continually generated with a line of sight to practical applications. In 2014 Masdar Institute launched Institute Research Centers (iCenters) that serve as the permanent homes to its research activities and support the evolution of its research capabilities and priorities in vertical application domains — energy, water and environment, and sustainable systems at the micro and macro scales. The launch of iInnovation in 2014 has served to channel Masdar Institute’s research projects towards commercial applications, which is also being furthered through a number of programs, workshops, grants and collaborations. Through such initiatives Masdar Institute’s core research activities are linked with translational research and entrepreneurship education to better enhance the reach and impact of the Institute’s research activities on the UAE and its economic ambitions.
Masdar Institute has also established a number of Sponsored Research Centers to provide large scale research programs in focused areas and meet the research needs of industry and government sponsors. The sponsored research centers provide the Institute with a way to achieve impact in focused topical areas of immediate importance to industry and government. Unlike the iCenters, sponsored research centers are not permanent but rather come and go as according to the needs of the sponsor, ensuring that Masdar Institute’s research activities stay relevant and responsive. To date, sponsored centers have been developed at Masdar Institute in the fields of sustainable bioenergy, renewable energy resource assessment and mapping and microelectronics.
These research centers – both iCenters and sponsored research centers – jointly provide increased visibility into the Institute’s areas of research strength to increase stakeholder engagement and attract further collaboration and funding. They link the Institute’s core research activities with translational research and innovation ecosystem development and serve to foster areas of research in core domains that are aligned with the UAE’s evolving research and human capital needs.
By integrating all elements of the innovation ecosystem into the UAE’s knowledge economy transition strategy, the country is aiming to not just become a knowledge economy, but a leading knowledge-economy in some of the world’s most dynamic industrial sectors. That is because innovation is one of the most potent drivers of economic growth – above and beyond R&D alone. In the US – one of the world’s most innovative economies – it has been estimated that innovation drives up to 90% of per-capita income growth. Specifically, innovation in science and technology not only produces jobs, but replaces lower paying jobs with higher-paying and higher-skilled jobs. Innovations are new or drastically improved products, services or systems that completely alter the landscape and result in a cascade of new economic activity across a range of sectors and services. They function as value multipliers, producing significant and lasting benefits for the institutions and nations that host them. Achieving that multiplier effect of innovation is the goal of the UAE and significant progress has been made in the establishing the underlying fundamentals for indigenous innovation as the country continues to evolve into a globally competitive, knowledge-based economy.
These trailblazing efforts by the UAE to develop an innovative knowledge economy with a strong R&D ecosystem will help set the stage for broader R&D expansion across the Middle East. They provide a model that many other governments can adapt and adopt according to their needs. The collaborations across industry, academia and government led by Masdar Institute will help strengthen the R&D foundation across the region while the intellectual and human capital it produces will stimulate innovative ripples across the wider Middle East.
Dr. Steve Griffiths is Vice President for Research at Masdar Institute of Science and Technology in Abu Dhabi.
Printed in TRENDS magazine in October 2015