Abu Dhabi Innovation Framework
Abu Dhabi Vision
Create a confident, secure society, and Build a sustainable, open and globally competitive economy
Premium education, healthcare, and infrastructure assets
The creation of a sustainable knowledge‐ based economy
A large empowered private sector
An optimal transparent regulatory environment
Maintenance of Abu Dhabi's values, culture and heritage
Pillars
Emirate resource optimisation
Complete international and domestic security
Continuation of strong and diverse international relationships
A significant and ongoing contribution to the federation of the UAE
The development of a knowledge based economy (KBE) is one of the five focus areas for the whole of Government of Abu Dhabi
Elements of greater effort
Definition
Building a sustainable, knowledge‐based economy
Develop and economy where the primary source of value creation is the origination, use, and sharing of knowledge regardless of sector
Managing the demographic mix of the Emirate
Manage the demographic flow so that Emirati character remains a defining factor of Abu Dhabi, with security and social harmony
Further developing the private sector, with optimal transparent regulation
Develop a large, independent private sector operating in open markets alongside a smaller government sector that designs and implements efficient and transparent regulatory frameworks
Building human capital
Develop the capabilities of the population ‐ through education and life long training ‐ to be able to lead the future society and economy
Managing environmental sustainability
Develop a framework in which the environment and its health is taken into account and balanced with the needs of the economy, society, and the needs of urbanisation and growth
There are four major drivers of KBE - innovation is one important factor World Bank Knowledge Economy Index Top 5 countries & UAE
f
1
Denmark
9.6
2
Sweden
9.5
3
Finland
4
5
42
#
Economic Incentive and Institutiona + l Regime
Innovation
+
Education
ICT
9.6
9.8
9.3
9.2
9.8
9.4
9.7
9.4
9.5
9.7
9.8
Netherlands
9.3
9.2
9.5
9.3
9.4
Norway
9.3
9.3
9.1
9.6
9.2
UAE
6.7
9.7
+
7.0
KEI ranking (out of 134)
Source: The World Bank Knowledge Assessment Methodology and Knowledge Economy Index - 2008
6.7
4.8
8.6
8.2
Innovation –Updated Policy Agenda has addressed the need to develop specific innovation policies Policy Areas Mentioned in the Policy Agenda
Innovation Drivers
• Enhancing skills and capabilities of the citizens. • Improving tertiary enrolment. • Enhancing technical and vocational training. • Extend or establish knowledge networks within industry sectors. • Developing links with leading networks of experts in relevant sectors • Developing an innovation strategy including clustering. Providing attractive incentives to support a knowledge-based economy. Continue to ensure access to high-quality ICT infrastructure • Embed a culture of customer-service excellence through the Government Excellence Framework. • Seek to build a culture of innovation and continuous learning in the public service. 6
Innovation Systems for Resource-Rich Economies (NREs): International Lessons for the Abu Dhabi Context Project undertaken for the General Secretariat of the Executive Council, Abu Dhabi
Thomas Andersson, Elias Carayannis, Piero Formica, Sara Johansson de Silva
Natural Resource-based Economies
•
Production process: multidimensional, spanning from extraction, exploration, manufacturing, and services
•
High purchasing of innovative technologies rather than in-house R&D
•
Resource innovation influenced by degree of collaboration with suppliers, customers, competitors, governments …
•
Tendency for innovation to focus on processes and distribution of low-to-medium goods and services rather than high-value products and services
•
Bulk of innovation activities in large extensively internationalized firms
Innovation output: undiversified economy (High‐tech exports as % of GDP)
200 Saudi Arabia
Qatar
Thailand
Malaysia
Botswana
South Africa
Brazil
400 Singapore
Finland
New Zealand
Australia
Norway
Canada
Algeria
Sweden
1200
Chile
600
Hong Kong, China
Kuwait
Saudi Arabia
Qatar
Oman
Bahrain
UAE
60 40 20
Oman
800
Algeria
0 100 80
Bahrain
1000
Kuwait
UAE
S&T outputs
Scientific and journal articles, per million people
0
0
20
Botswana
Thailand
Brazil
Chile
South Africa
Malaysia
60 Australia
Norway
80 Hong Kong, China
Singapore
100 Canada
Bahrain
Algeria
0.0 Oman
Finland
Sweden
200
New Zealand
40 Qatar
0.5
Bahrain
120
Algeria
1.0 Saudi Arabia
2.0
Oman
140 Kuwait
2.5
Qatar
1.5 UAE
160
Saudi Arabia
180
Kuwait
UAE
S&T outputs
Patents Granted by USPTO, per million people
0
Brazil Bahrain
South Africa
Thailand
Botswana
Algeria
100
Malaysia
Qatar
Singapore
Kuwait
Saudi Arabia
200
Oman
300
Chile
400
Hong Kong Abu Dhabi
500
UAE
600
Australia
New Zealand
Canada
700
Finland
800
Sweden
900
Norway
ICT access - not a problem Internet users per 1000 people 1000
Human capital
(gross tertiary enrollment, %)
Eight Gaps • Economic diversification • The turnover of the expatriate “creative class” • Ties among talented individuals belonging to different organizations • Implementation of a policy for wellbeing, environmental and sustainable economy and society • An environment conducive to the development of opportunity-based entrepreneurship • R&D and technical innovation • Mobilization of human resources and investments to match opportunities for economic and business development • Governance and collaboration to underpin consistency in regard to innovation
The Innovation Gap
Mindset Research Culture
Seed and Venture Capital
Investment Law
15
Measurement, indicator issues, CIS
•
• •
• •
The Community Innovation Surveys (CIS) are a series of harmonised surveys initially executed by national statistical offices throughout the European Union and in Norway and Iceland, but later expanded to many countries beyond Europe. • The CIS consists of a core set questions that are harmonised across all countries and diversified questions specific to different countries. The CIS takes a sample from all business establishments in a country, stratifying the sample by sector, establishment size and possibly region. The sample is selected to be representative in terms of sector and size of the general population of firms in an economy. Definitions are based on the OECD Oslo Manual for measuring innovation activities. For the purpose of the survey, innovation, is defined as new or significantly improved goods or services and/or the processes used to produce or supply all goods or services. .These may be new to the business or new to the market; new to the country or new to international markets.
Set of pilot data survey respondents
Sector Total
Size of Enterprise
Small
Medium
Large
143 (33%)
32
52
59
Services
97 (22%)
26
37
34
Commerce/Trade
67 (15%)
12
21
34
Construction
78 (18%)
9
21
48
Manufacturing
29 (7%)
5
6
18
Transport
20 (5%)
4
5
11
Financial Services
433
88
141
204
Total
Types of innovations
Size of the innovators
Sectors of innovation
Sector of innovation by type of innovation
Who is the customer for innovation?
Most innovation activities happen in the B2B sector
Market orientation
Novelty of innovation and market orientation
Novelty and Market orientation by sector
Innovation performance and ownership Innovative behavoir of Abu Dhabi or UAE subsidiaries and subsidiaries of US, European and Asian firms 70%
60%
% of all firms in one group
50%
Abu Dhabi or UAE subsidiaries Subsidiaries of US, European or Asian firms
40%
30%
20%
10%
0% Product or process innovation
Products new to international markets
Cooperation
But how do Abu Dhabi firms innovate?
AD firms invest in various forms of innovation fostering activities
Source: IKED/CIS Pilot Data Survey , Statistics Center – Abu Dhabi(2009), preliminary
They collaborate with others
Collaboration by sector
Source: IKED/CIS Pilot Data Survey , Statistics Center – Abu Dhabi(2009), preliminary Romania
Bulgaria
Turkey
Italy
Abu Dhabi
Malta
Germany
Luxembourg
United Kingdom
Spain
Portugal
Norway
Ireland
Denmark
Croatia
Slovakia
Estonia
Sweden
Latvia
Czech Republic
Hungary
Austria
Netherlands
Greece
Poland
Belgium
Lithuania
Slovenia
Cyprus
Finland
Percentage of all innovating firms
AD firms can still benefit from more collaboration Share of co-operating firms, only firms with more than 250 employees
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
AD firms also invest in R&D
R&D investment is on par with many advanced economies in Europe
Continous and occasional R&D activitiy in international comparison, firms with more than 250 employees 100% 90%
percentage of all innovative firms
80%
occasional R&D activity continuously R&D activity
70% 60% 50% 40% 30% 20% 10%
Source: IKED/CIS Pilot Data Survey , Statistics Center – Abu Dhabi(2009), preliminary
Bulgaria
Poland
Croatia
Romania
Estonia
Turkey
Lithuania
Hungary
Cyprus
Greece
Slovakia
Portugal
Abu Dhabi
Malta
Czech Republic
Spain
Austria
Slovenia
Germany
Netherlands
Belgium
0%
Summary of main findings • Firms in the Abu Dhabi economy generate a considerable level of innovation via the supply‐chains. • Very small and very large firms are the most innovation active. • Innovation active firms tend to be concentrated in three sectors: oil & gas, manufacturing, and business services. • The oil & gas sector is the most innovative on international scale. • These three sectors are also the most important markets and partners for innovation. • Abu Dhabi firms make varied investments in innovation fostering activities, particularly R&D and the acquisition of new technology.
First insights into what is needed... • Expanding innovation activities beyond the three dominant sectors. • Increasing the engagement of middle‐size enterprises in innovation activities. • Broadening and deepening the scope and extent of partnerships and collaborations locally. • Fostering the demand for innovation beyond the oil & gas industry. • Increasing the exposure of AD firms to international markets.
Index methodology
• Individual composite indices based on a mean average of normalised/standardised values • The mean and standard deviations are calculated for each metric (s) • For each metric (s), the mean (m) is subtracted and divided by the standard deviation (sd), i.e. C = (s‐m)/sd • Result is a series of index scores with a mean value of zero, i.e. a score above zero equates to an above average performance, and vice‐versa • The mean average is calculated for each metric and weighted together to create the overall composite score
Interwoven knowledge linkages
Source: Mahroum et al. (2008)
Knowledge Access Index is based on the mean average of the standardised values for the following metrics • Advanced Producer Service Network Connectivity
•Student outward mobility •Internet usage (per 100 persons) •Exports of High‐Tech products as % of GDP
Pilot survey data results In d ex o f K n o w led g e Access 0.40 0.30 0.20 0.10
-0.40 -0.50
Source: IKED (2010), forthcoming, preliminary results
bi
d bu A
Ze ew
D
al
ha
an
d an nl N
-0.30
Fi
A
us t ra
lia
a ad an C
ed
or w N
S
w
-0.20
en
-0.10
ay
0.00
The Knowledge Anchoring Index is based on the mean average of the standardised values for the following metrics: •FDI/GDP •Share of Highly Skilled Foreign population/Total population
Pilot survey data results
Index of K now ledge Anchoring 1.5 1 0.5 0 Canada -0.5
A bu Dhabi
A us tralia
-1 -1.5
Source: IKED (2010), forthcoming, preliminary results
Finland
New Zealand
S weden
Norway
The Knowledge Diffusion Index is based on the mean average of the standardised values for the following metrics: •Share of persons with at least tertiary education in the LF •Proportion of businesses that have cooperated on innovation (CIS) •Innovation new to firms (CIS) •Imports of high‐tech products (% of total imports)
Pilot survey data results
Index of Know ledge Diffusion 0.6 0.4 0.2 0 -0.2
Sweden
Australia
New Zealand
-0.4 -0.6 -0.8
Source: IKED (2010), forthcoming, preliminary results
Finland
Norway
Abu Dhabi
Canada
Knowledge Exploitation Index is based on the mean average of the standardised value of • The proportion of Innovation Active Enterprises
Pilot survey data results
In d ex o f K n o w led g e E xp lo itatio n 2 1.5 1 0.5 0 -0.5
Canada
Norway
F inland
-1 -1.5
Source: IKED (2010), forthcoming, preliminary results
A us tralia
S weden
A bu Dhabi
New Zealand
Components of Innovation Index
Composite Indices Knowledge Access Knowledge Anchoring Knowledge Diffusion Knowledge Exploitation Overall Knowledge Index Knowledge Index Scores
Components of Innovation Index
Composite Indices Knowledge Access
(-)
Knowledge Anchoring
(+)
Knowledge Diffusion
(-)
Knowledge Exploitation
(-)
Overall Knowledge Index
(-)
Knowledge Index Scores
Summary of key findings • AD is doing well in attracting and retaining (anchoring) innovation actors (skills, foreign firms and investments. • AD lags other advanced NREs in gaining access to international innovation actors, be it firms, research centers, advanced markets. • AD lags other NREs in the diffusion of innovation. This means there isn’t sufficient interaction and partnering happening among local innovation actors. • AD is behind in its ability to exploit acquired knowledge to introduce novel goods and services (in comparison with the other advanced NREs).
