Ul . The UAE's Progress Towards a Knowledge and Innovation-Driven Economy Given its technology infrastructure and knowledge economy enablers, the UAE is well positioned to compete in knowledge-intensive economic activities. A knowledge economy is characterized by an ecosystem of interconnected elements and networks that allows a country to generate, adopt, adapt, diffuse, and ultimately commercialize knowledge-intensive products and services. The World Bank Institute describes four fundamental pillars of a knowledge economy (see Inset 3), summarized as: economy as it supplies the necessary skills and talent. The objective of educational policy is to create a society of skilled and creative people, with opportunities for quality education, employment or self-employment, and the chance to participate fully in the country's development. In order to truly develop its human capacity and create a workforce with the skills and talent that will drive a knowledge economy, the UAE needs to ensure quality education at every level from pre-school to adult learning. Currently there are reforms underway to improve the quality of teachers, curriculum, and assessment at primary and secondary education levels to improve the country's educational outcomes. In higher education, curricula are being upgraded to improve competencies that ensures creativity and innovation. Pillar 1: Economic Incentive and Institutional Regime Pillar 2: Education and Human Resources Pillar 3: The Innovation System Pillar 4: Information and Communication Technology (ICT) Making effective use of knowledge in an economy requires the development of appropriate policies, institutions, investments, and coordination across these four pillars. The following highlights the UAE's performance in each of these key areas. In addition, the UAE is partnering with some of the world's leading educational institutions to fortify the country's education sector (see Appendix 1). This substantial investment to bring world-class education and strong research capabilities into the country is an important step in developing a workforce with the right skills to generate growth and in increasing the country's research output. In order to keep pace with global developments there is still a need to develop a critical mass of specialized research institutions and highly-skilled knowledge professionals, including scientists and engineers. By strengthening its capacity as a centre for education in the region, the UAE can leverage its position as a knowledge hub and serve as a talent pool, while competing globally. Economic Incentive and Institutional Regime An economic and institutional framework that allows for knowledge generation and its commercialization are fundamental to the proper functioning of a knowledge economy. Key elements include macroeconomic and political stability, fair competition, and regulatory policies that are conducive to entrepreneurship. More specific to knowledge economies is the recognition and protection offered to the creators of intellectual property, through proper patenting, copyrighting and trade-marking policies. The UAE government has, over the past few years, been working to strengthen its already strong business- enabling environment and institutional framework towards improving the country's competitiveness. In 2010, the UAE was ranked as one of the world's top five business reformers by the widely referenced World Bank Group's Doing Business Report. It was also ranked 40th out of 183 countries for overall ease of doing business in the 2010 report. Upgrading the Innovation System An effective innovation system consists of firms, science and research centres, universities, and other organizations that can tap into and contribute to global knowledge, adapt it to local needs, and create new products and services. Knowledge economies make better use of their assets and capabilities in contexts where there are strong links and synergies between research institutions and industry-often in cluster environments. The close proximity of research and industry allows for knowledge spillover effects and the increased local competition gives the products an edge to compete on the global stage. Education and Human Resources Education is the cornerstone of the knowledge There are efforts underway to strengthen the UAE's innovation drive. Key to fostering innovation will be 12 Inset 3 Knowledge Economy Pillars The World Bank Institute defines the following four pillars as fundamental to a well-functioning knowledge economy the establishment of stronger ties between education, industry, trade, services, enterprises and entrepreneurs. Strengthening the motivation for innovation among individuals and firms is also critical to fostering a culture of innovation and entrepreneurship. Currently in the Small & Medium Enterprises (SME) sector there are business support programmes including efforts by the Sheikh Khalifa Fund, the Mohammed Bin Rashid Establishment and Ruaad to encourage entrepreneurship by smaller-sized businesses. Going forward, a challenge will be to provide incentives to large multinational companies to anchor their Research & Development (R&D) functions in the UAE to encourage valuable knowledge transfer. Pillar 1: Economic and Institutional Regime The country's economic and institutional regime must provide incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship. Indicators are: • Tariff and non-tariff barriers • Regulatory quality • Rule of law Information and Communication Technology A dynamic information and telecommunication infrastructure is critical to enable a knowledge economy. Information and Communication Technologies (ICTs) facilitate effective communication, dissemination and processing of knowledge, and have a particularly important role in the dissemination of scientific and technical information. An effective ICT network also has important applications for social and civic development, in the areas of education, healthcare and e-governance. Pillar 2: Education and Human Resources The country's population requires education and skills to enable them to create, share and utilize knowledge effectively. Indicators are: • Adult literacy rate . Secondary enrollment rate • Tertiary enrollment rate The UAE has already developed an impressive ICT sector with a demonstrated commitment to providing its people and businesses with access to the latest technologies. The UAE is rated as the leader in the MENA region for ICT and a solid performer internationally. According to the World Economic Forum's Global Information Technology Report 2009- 10, the UAE ranked 23rd globally making it among the world's most networked economies. Pillar 3: Innovation System The country's innovation system-firms, research centres, universities, think tanks, consultants, and other organizations-must be capable of tapping the growing stock of global knowledge, assimilating and adapting it to local needs, and creating new technology. Indicators are: • Royalty and license fees payments and receipts • Patent applications granted by the US Patent and Trademark Office • Scientific and technical journal articles Pillar 4: Information & Communication Infrastructure The UAE is also determined to use ICTs as a vehicle for the promotion of culture and national identity. There are initiatives underway for the development of Arabic content such as applications for learning, development of Arabic media and digitization of scientific content. The Mohammed bin Rashid Al Maktoum Foundation has an initiative to translate and digitize masterpieces in science and culture at the rate of one book per day. A dynamic information infrastructure is needed to facilitate effective communication, dissemination, and processing of information. Indicators are: Telephones per 1,000 people Computers per 1,000 people • Internet users per 1,000 people Source Adapted from World Bank Institute, Knowledge Assessment Method- ology and Knowledge Economy Index, KAM: www.worldbank.org/kam 7 IV. The Way Forward Accomplishing the UAE's vision of building a competitive knowledge-based economy will require the engagement of government, businesses and individuals: Government. For governments, this means The knowledge economy holds significant promise putting in place the appropriate policies and for the UAE to have sustained high growth and institutions and establishing a knowledge prosperity over the long-term. With a focus on the economy infrastructure. This includes country's vision and the active engagement of different implementing knowledge economy-focused stakeholders, the UAE is well positioned to leap forward educational policies, strengthening regulatory from vision to actualization, to develop regional frameworks for ensuring knowledge generation, leadership in key areas and to compete globally as an adoption, protection and dissemination; and innovation-driven knowledge economy. for ensuring robust and attractive business and investment environments. Private Sector: As the engine for economic growth, the role of the private sector is critical. Companies need to deepen their competitive advantages and strengthen their capacity to innovate by forging stronger networks with universities and research institutions and increasing their investment in R&D. They also need to improve their export competitiveness based on knowledge-intensive products and services. . Individuals: For individuals, being successful in a knowledge economy will mean developing capabilities and skills to participate in creating the country's knowledge economy. This includes having the skills to respond to global conditions in the areas of science and technology and arts and humanities, being multilingual , and being entrepreneurial . About the author: Shaheena Mohamed is a Senior Project Manager at the General Secretariat of the Emirates Competitiveness Council , based in Dubai, UAE. She is former staff member of the International Financial Corporation/World Bank Group where she worked on economic development advisory services in the MENA region. Shaheena holds a Master of International Affairs Degree from Columbia University, New York. 8
Purchase answer to see full attachment