Why the GCC needs to balance research with multi-billion labs investment

Investments by GCC countries in state-of-the-art labs, university buildings, and research facilities are set to reach more than US$38 billion by 2030.
AI, Artificial intelligence, GCC, Middle East, Tech, Investment, Research, Business, UAE, United Arab Emirates

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Despite GCC governments allocating large shares of their budgets to state-of-the-art facilities, there are still major obstacles behind the lack of research coming out of the GCC.

Investments by GCC countries in state-of-the-art labs, university buildings, and research facilities are set to reach more than $38 billion by 2030, according to new research.

However, the study by consultants Strategy& Middle East said that so far, they have not put similar efforts into high quality research and development.

Consequently, GCC countries require importing knowledge, which is often difficult to adapt to the specific context of Gulf States, or may not even be available, it noted.

The study revealed that R&D spending (including capital expenditures) is much lower in GCC countries compared to their global peers. R&D spending in the UAE, for example, amounts to 0.9 percent of GDP, and just 0.1 percent of GDP in Bahrain.

By contrast, Organisation for Economic Cooperation and Development countries spend, on average, 2.5 peercent of their GDP on R&D.

The study said to be in line with OECD average, Saudi Arabia will have to increase its R&D spending by an additional 1.7 percent of its GDP; 1.6 percent for the UAE; 2 percent for Qatar; 2.2 percent for Kuwait; 2.3 percent for Oman and 2.4 percent for Bahrain.
  
It added that despite GCC governments allocating large shares of their budgets to state-of-the-art facilities, there are still major obstacles behind the lack of research coming out of the GCC including structural limitations within academia, scarce partnerships with international researchers and the private sector and insufficient Intellectual Property (IP) regulations.

Dr Yahya Anouti, principal with Strategy& Middle East, said: “At present, private-sector led and academic research is limited. Local universities have few channels for collaboration with international universities, the private sector, or the government, while the region’s legal system does not effectively protect researchers’ intellectual property and provide them with commercialisation support.

"This reduces the output and quality of their research, and precludes innovation and any meaningful input into social and economic policy. This means that GCC countries pay a high price to import knowledge, an unsustainable solution that does not always answer their specific needs.”

Countries in the Gulf are therefore missing an important growth opportunity, Anouti said.

The study found that an increase of 1 percent in R&D could add 2.2 percent to economic growth.

Dr Shihab Elborai, Partner with Strategy& Middle East, said: “GCC countries have made admirable investments in research facilities, but must now turn their focus to fostering the research ecosystem. By encouraging the output and quality of academic and corporate research, they can enable innovation and the development of new products and solutions, enhance workforce skills, and inform public policy. As a result, these advances will contribute to adaptability and increased productivity.”

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