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Regional Systems of Innovation and Economic Structure in the Arab Region

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Abstract

This paper employs both the descriptive and comparative approaches and uses the definition of systems of innovation used in the literature to examine the existence, characteristics and implications of the regional systems of innovation in the Arab region. We examine three hypotheses: that the regional systems of innovation exist but characterized by serious weaknesses in the Arab region compared with other world regions, that the structure of the economy has significant effect in the performance of innovation systems in the Arab region, and that the poor Arab systems of innovation has serious implications in the Arab region. We explain two common characteristics of Arab regional systems of innovation concerning poor subsystems of education, science and technology (S&T), research and development (R&D) and information and communication technology (ICT) institutions in the Arab region and concentration of R&D activities within public and university sectors and small contribution of the private sector in R&D activities. We find that the major implications are the poor performance of the Arab region in terms of S&T indicators, competitiveness indicators, technology achievement index and poor integration in the knowledge economy index. Therefore, it is essential for the Arab region to enhance the institutions of higher education, S&T, R&D and ICT to build the Arab regional systems of innovation and to achieve economic development in the Arab region.

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Notes

  1. The Arab region is composed of 22 countries, including Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libyan Arab Jamahiriya, Mauritania, Morocco, Oman Occupied Palestine Territories, Qatar, Saudi Arabia, Somalia, Sudan, Syrian Arab Republic, Tunisia, United Arab Emirates and Yemen.

  2. For instance, the OECD (1999) indicates two sources of diversity in national innovation systems: a first source of diversity is country size and level of development. Large and highly developed countries offer markets with advanced customers and opportunities to reap economies of scale while maintaining diversity in R&D activities. A second source relates to the respective roles of the main actors in innovation processes (firms, public and private research organizations, and government and other public institutions) and the forms, quality and intensity of their interactions (OECD 1999, p. 22).

  3. Information and communication technology (ICT) is measured by the percentage of population using the Internet, fixed telephone and mobile.

  4. Linstone (1988) discusses the evolution of the multiple perspective approach and its range of applications over the past decade. The traditional technical perspective of systems analysis is augmented with organizational and personal perspectives. The three types of perspectives have inherently different characteristics and properties. The applications show that each perspective yields insights on a system that are not attainable with the others. The organizational and personal perspectives also focus more attention on problems of implementation. The concept is serving as an effective and practical vehicle to overcome the limitations of systems analysis in dealing with complex real-world situations. See Linstone (1988).

  5. See Rogers (1995).

  6. See the ‘Regional Innovation Scoreboard (RIS)—Methodology report’, (2010) of Hollanders et al. (2010). See also the Regional Innovation Scoreboard: http://www.proinno-europe.eu/page/regional-innovation-scoreboard, accessed 6 January 2013.

  7. See McLeod (2001).

  8. See Doloreux and Parto (2005). See also Doloreux and Parto (2004)

  9. See D’Agostino (2001).

  10. See Padilla, Vang, and Chaminade (2008).

  11. See Vang and Chaminade (2007).

  12. See Lundvall et al. (2009).

  13. See Astrid et al. (2009).

  14. Fergany (1999) uses the term Arab region instead of Arab countries and argues that ‘in spite of recent efforts to define alternatives: “Middle East”, “Middle East and North Africa (MENA)” or “Arab countries, Iran and Turkey”, an “Arab region” is a coherent and meaningful historical entity. It is also so in the perspective of science, especially social sciences. ……. “Arab Homeland”, used in Arabic, is laden with cultural and functional connotations. The common language, an essential medium for knowledge generation and utilization, is a potent reason. A distinguished history of achievement in science at the zenith of Arab civilisation is another’.

  15. According to the World Bank classification (2005), the Arab resources oil-based economies includes only six countries: UAE, Qatar, Kuwait, Bahrain, Saudi Arabia and Oman. Arab mixed oil economies includes Algeria and Libya. Arab diversified economies include six countries: Egypt, Tunisia, Morocco, Syria, Lebanon and Jordan. Oil primary export economies include Djibouti, Sudan, Mauritania and Yemen and Comoros. Other countries include Iraq, Occupied Palestine Territories and Somalia. On that basis the share of oil, mixed oil, diversified, primary exports and other countries account for 27, 9, 27, 23 and 14 %, respectively.

  16. Fergany (1998) recognizes the diversity amongst Arab countries, in particular, the heterogeneity of Arab employment conditions and argues that ‘The Arab region comprises quite a heterogeneous group of countries, both in terms of socioeconomic structure and the nature of unemployment. On one hand, the six oil-rich Gulf Cooperation Council (GCC) countries are major labour importers. Having been, to varying degrees, generous welfare states, these countries have been undergoing economic strains as a result of the declining fortunes of the international oil market. …. But about 90 % of the Arab population resides in countries outside the GCC. This is also a very heterogeneous lot. On the human development index, in 1998, they include some at the top of the “medium” level countries as well as some near the bottom of the “low” tier’ Fergany (1998). Ali (2004) uses the ERF (1998) classification of Arab countries and finds that ‘The Arab countries have very diverse characteristics in such areas as the structures of economies, level of development, geographical location and type of governance and institutions. To highlight the economic diversity of the region, ERF (1998) grouped the countries of the region into four broad categories: mixed oil economies (MOE: Algeria, Iraq and Libya); oil economies (OE), which include the countries of the Gulf Cooperation Council of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE; diversified economies (DE: Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia) and primary export economies (PEE: Comoros, Djibouti, Mauritania, Somalia, Sudan and Yemen)” Ali (2003, p. 10; 2004, p.11). All high-income countries are clustered in the Gulf region and located in Asia, while all low income are located in Africa, whereas the medium-income countries are distributed between Asia and Africa.

  17. See, for example, Nour (2002a). Figures 3–4 show that although the level of economic growth and unemployment rates varied enormously across the Arab countries, however, now the Arab states are facing the challenges of declining trend of economic growth rates and increasing unemployment rates (see Elbadawi (2002) and Makadisi et al. (2003) for recent analysis of slowing economic growth in the Arab world). Moreover, the presence of high poverty rate adds to the challenging situation in the medium- and low-income groups in the Arab countries. For instance, the results of Ali (2001) and Ali and Elbadawi (2000) indicate the high incidence of poverty in the Arab states, estimating about 22 % of the Arab population were living below a real poverty line measured in term of purchasing power parity price (PPP) of $56 per person per month.

  18. See, for example, Muysken and Nour 2006). Nour (2002b) shows insignificant impacts of ICT in the Arab countries. For earlier analysis of S&T in the Arab region, see for example, Qasem (1998), Zahlan (1999a, b) and Fergany (1999).

  19. These sources of diversity are indicated in the OECD (1999).

  20. See UNDP (2011).

  21. ‘Harbison Myers Index is the sum of secondary enrolment and tertiary enrolment times 5, both as percentage of an age group. Technical enrolment index is tertiary total enrolment (times 1,000) plus tertiary enrolment in technical subjects (times 5,000), both as percentage of population. Engineering skills index is the same as the previous index, with tertiary enrolments in engineering instead of enrolment in technical subjects’ (Lall 1999).

  22. See UNDP-AHDR (2003).

  23. See United Nations Development Programme (UNDP) (2003).

  24. See UNDP (United Nations Development Programme) (2004).

  25. See Muysken and Nour (2006).

  26. See data from ESCWA

  27. The concept of full-time equivalent researcher is adopted by UNESCO statistics on Research and Development (R&D) personnel.

  28. See data from ESCWA

  29. The institutions constituting the systems of R&D and hence innovation vary across the Arab countries, e.g. public research institutes may be important for R&D in one country, while research universities may perform a similar function in another. For instance, while all research activities are concentrated in the public sector in both Lebanon and Yemen, the university institutions perform all research activities in Qatar. In both Bahrain and UAE, research activities are shared but mostly concentrated in the public institutions (75 and 60 %), followed by the university institutions (25–40 %), respectively. Kuwait shows different structure due to the role of private sector, the research activities are shared but mostly concentrated in the public followed by the private institutions 73 and 27 %, respectively. On the other hand, Saudi Arabia shows another difference as the research activities are shared but concentrated in the university followed by public and private institutions 39, 57 and 4 %, respectively. Egypt indicates another difference as the research activities are shared but concentrated in the public, followed by university and private institutions, 75, 16 and 4 %, respectively, while Jordan shows another difference as the research activities are shared but concentrated in the public institutions, followed by similar contribution from university and private institutions, 75, 12.5 and 12.5 %. respectively.

  30. See UNDP (2004).

  31. See UNDP (United Nations Development Programme) (2004)

  32. See for instance, Nour (2002b).

  33. See for instance, Nour (2002a).

  34. See UNDP (2004).

  35. For instance, ‘Zahlan (1999a), explains the very limited cooperation as indicated by the number of joint publications and co-authorship amongst scientists in both the Arab Gulf and Mediterranean countries. Particularly, there is no significant cooperation amongst the Gulf countries scientists; for instance, figures indicate that scientific cooperation amongst Gulf countries accounts for less than 2 percent of their worldwide cooperation. Zahlan (1999a) finds that in 1990, co-authorship within the Gulf countries was only 1.4 per cent of all co-authored papers; this increased to 3 per cent in 1995. The limited regional cooperation also holds for the Mediterranean countries. For instance, Zahlan (1999a) finds that “in 1995, of total publications of scientists in Algeria, Morocco and Tunisia, very surprisingly only 11 % of the co-authored publication involved scientists from two Maghreb countries and only one (of the 11) did not involve an OECD partner. In addition there is limited scientific cooperation and co-authorship of scientists between both Arab Gulf and Mediterranean countries and between them and other Arab countries. The Gulf countries cooperation with Arab scientists tends to be limited to fewer number of Arab countries, e.g., Egypt is the major partner, according to Zahlan (1999a), joint co-authorship with non Gulf Arab countries merely reflects the fact that Gulf countries universities employ professors from other Arab universities. The limited cooperation with other Arab scientists also holds for the Mediterranean countries, for instance, Zahlan (1999a) finds that the cooperation between Maghreb countries and other Arab scientists accounts only for 3 % and 3.5 % of total joint published papers in 1990 and 1995 respectively. (Zahlan 1999a, p. 15)’ (Nour (2005).

  36. See UNDP-AHDR (2003), pp. 5–6, 109–113.

  37. The results in this section are consistent with the findings of Lall (1999) and Belkacem (2002). For instance, Belkacem (2002) indicates that ‘despite the huge efforts made by many Arab countries in stabilizing and adjusting their economies as part of their economic reform programmes, their performance is unfortunately below their potential and are not taking full advantage of the opportunities that the global economy has offered to them. This is reflected in the weak record of Arab growth as compared to growth in LDCs. Low GDP growth rates coupled with high population growth rates meant stagnant per capita GDP growth rates. At the same time, Arab countries have attracted very little of net private capital which surged to LDCs in recent years. Arab exports growth which averaged only 1.5 % per annum during 1990–1995 is far below LDC’s performance where growth reached 10 % during the same period. Added to this slow growth of exports, most of it is made of traditional exports. These facts reflect that Arab countries are far from being prepared to face globalization challenges. Given their resource endowments, Arab countries are underachievers and are falling behind in an increasingly competitive world’ (c.f. Belkacem (2002)).

  38. For definition and details about TAI, see UNDP (2001). According to UNDP (2001), the technology achievement index (TAI) focuses on four dimensions of technological capacity that are important for reaping the benefits of the network age. TAI includes (1) creation of technology as measured by the number of patents granted per capita and receipt of royalty and licence fees from abroad, (2) diffusion of recent innovations as measured by diffusion of Internet and export of high and medium technology products as a share of all exports, (3) diffusion of old innovations as measured by diffusion of telephone and electricity and (4) human skills as measured by mean years of schooling and gross enrolment ratio of tertiary students enrolled in science, mathematics and engineering UNDP (2001).

  39. See UNCTAD International Investment Report (2002). Moreover, the report indicates that within the Arab region, only Bahrain is classified amongst the high-performance country in terms of attracting FDI. While, the group of UAE, Syria, Oman, Lebanon, Qatar, Kuwait, Egypt and Saudi Arabia and the group of Libya, Morocco and Yemen are classified as low and very low attracting countries, respectively.

  40. See UNDP-AHDR (2003).

  41. Comparator countries include Argentina, Brazil, China, Chile, Czech, Greece, Ireland, Malaysia, Mexico, Portugal, Singapore, South Africa, South Korea and Turkey.

  42. Because of the significance of high-technology exports, many studies used high-technology exports to define the degree of competitiveness in the technological market.

  43. See Arab Planning Institute (2012).

  44. Rasiah (2002) defines basic technology infrastructure (BII) as weighted proxies representing basic education (enrolment in primary schools), health (physicians per thousand people) and communications (main telephone lines per thousand people), and also defines high-technology infrastructure (HII) as weighted proxies represents R&D investment in Gross National Investment and R&D scientists and engineers per million people. Rasiah (2002) argues that BII is an essential but not a sufficient condition for economies to achieve technological capabilities; the incidence of economies generating innovation is higher when they also have the high-technology support institutions; the lower BII, the lower the capacity and resources for high-technology development.

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Acknowledgments

The author would like to thank Prof. Bengt-Åke Lundvall, Dr. Carlos Sato and the participants for their useful comments on this paper. The author would like to gratefully thank Dr. Elias G. Carayannis, Editor-in-Chief of this journal, and anonymous referee(s) for good comments on earlier draft of this paper. All the usual disclaimers apply.

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  1. Faculty of Economics and Administration, King Abdulaziz University, Jeddah, Saudi Arabia

    Samia Satti Osman Mohamed Nour

  2. UNU-MERIT, School of Business and Economics, University of Maastricht, Maastricht, The Netherlands

    Samia Satti Osman Mohamed Nour

  3. Economics Department, Faculty of Economic and Social Studies, Khartoum University, Khartoum, Sudan

    Samia Satti Osman Mohamed Nour

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Correspondence to Samia Satti Osman Mohamed Nour.

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The research work presented in this paper is based on a research paper prepared for the DRUID DRUID Winter 2005, Ph.D. Conference, DRUID Academy, Aalborg, Denmark, January 27-29, 2005. The revised version of this paper was prepared for the 10th GLOBELICS International Conference 2012: "Innovation and Development: Opportunities and Challenges in Globalisation" Zhejiang University (ZJU) and Tongji University (Tongji), 9-11 November, 2012, Hangzhou, China. The revised version of the paper was prepared for the Eleventh Globelics International Conference 2013: “Entrepreneurship, Innovation and Economic Development in an Era of Increased Globalisation”, Middle East Technical University, Ankra, Turkey, September 11–13, 2013. The earlier version of this paper was published with the title “Arab Regional Systems of Innovation: Characteristics and Implications,” UNU-MERIT Working Paper 2011-058, Maastricht, the Netherlands, October 2011. The revised version was published with the title "Regional systems of innovation in the Arab region," UNU-MERIT Working Paper 2013-012, Maastricht, the Netherlands, January 2013. All the usual disclaimers apply.

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Nour, S.S.O.M. Regional Systems of Innovation and Economic Structure in the Arab Region. J Knowl Econ 5, 481–520 (2014). https://doi.org/10.1007/s13132-014-0196-5

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