JEDDAH, 22 March 2006 — The World Summit on Innovation and Entrepreneurship (WSIE) is to be held in Muscat from April 1 to April 3 aimed at helping emerging nations achieve global competitiveness through initiative and innovation. Sam Hamdan, whose brainchild the summit is, feels that the message that should come from the event is that entrepreneurship and innovation need to play a key part in the future of the Arab world. The primary focus of the summit is the role that the private sector should play to enable development and stability in the Middle East.

The issue the summit hopes to hammer home is importance of creating a middle class in the region. The Arab world needs to create 80/90 million jobs by 2020, a task Hamdan felt was not possible by governments alone and had to involve the private sector.

Specific actions had to be identified across the social, economic and policy spectrum to enable entrepreneurs and innovators to have access to the know-how and thus leverage the region’s wealth to build its human capacity, relax its policies and enable large local companies to collaborate with the world.

He felt that the other side of that coin was a need for a more relaxed attitude to encouraging foreign companies to invest and set out their stalls in the GCC countries. This would yield positive results, most especially if there were a skills and knowledge transfer to the local populations.

“Companies,” he said, “do not only need to open a marketing office, but to open research and development centers here. They want to feel their intellectual property will be protected and that the patent office will enforce the laws.”

“It is important that the Arab governments relax the business environment for entrepreneurs to flourish in the Arab world,” Hamdan said in an interview recently. “We believe this sector has a role in promoting stability and enabling development in the Middle East.”

Recently, Dubai Ports World (DPW) withdrew from their deal to buy control of six US ports because of pressure from the US Senate. This has been variously seen by the parties involved as protectionism or a national security issue. Reluctance to allow inward investment works both ways.

Hamdan thought this retraction amazing. “The fact is that US Navy ships are being serviced by the UAE ports. About seven percent of the US GDP is owned by Saudi interests. How do we communicate this to the average American at city, state or county level and what would his reaction be to that?”

Expanding this point, Hamdan thought it amazing that Islam was constantly misrepresented around the world. “With all the wealth in the Arab world we are not able to communicate at even the basic level what this religion is all about.”

The key investors in Saudi Arabia had access to global markets. “They are heavy duty investors — so the question that arises with entrepreneurs and emerging leaders is ‘Why can’t we leverage these global investments that we have in UK/US to use them as assets to communicate what we are all about and attract the right people to help us develop our competencies, whatever they are?’”

The summit will take a dispassionate look at the challenges that face development in the area. The Arab world — and the GCC in particular — has excelled at being a consumer of external innovation. Hamdan thought it needed to start looking at ways of becoming a producer; to do that, the knowledge infrastructure needed constructing and people must be given the opportunity to participate in society at all levels.

“How can we expect the Arab world to be competitive,” he asked, “if 50 percent of its population in some key markets is not participating and forming the economic road map? We need to start somewhere.”

He pointed out that Jordan, Tunisia among others were looking ahead to the knowledge economy as a platform for them that would position them for regional and global competitiveness.

The GCC market is in a better position due to their oil wealth to leverage revenues and invest not only in physical infrastructure but also to redirect some of the revenues toward development of human capital.

“We could build the best business parks in the world but why bother, if 90 percent of our population is not involved in producing products and services that are not traded and exported to regional and global markets.”

If nothing is done, then the long term will present social issues for these nations. Part of the success in building the knowledge economy in China, Ireland, Singapore and Malaysia is that all have succeeded at building their physical infrastructure but have also relaxed their policies on foreign direct investment and encouraged companies to come and help their businesses. Knowledge and skills exchange is a standard part of the deal. The most attractive part to the investing companies thought Hamdan, was the human capital.

The culture of the Middle East is to a greater or lesser extent religio-centric. Is this a help or a hindrance to inward investment and the development of a knowledge-based business environment?

Hamdan referred to the example of Malaysia. It has a substantial Muslim population yet has enthusiastically taken to the entrepreneurial and knowledge based culture. “I think it is more of a cultural issue these nations have to overcome rather than a religious issue,” he said.

One of the topics the summit will address is how religion can be used to promote entrepreneurship and innovation in the Arab world. “We need to look at mosques as forces for promoting innovation. It will take time; we have to start somewhere. We have to look objectively at the challenges these nations are facing.”

One of the major issues that face governments and businesses in the Middle East is that many large companies are family-owned and keep their affairs private as far as possible.

“Transparency and the government’s view of this is a key component to looking ahead,” thought Hamdan, “at least if the private sector is to succeed in the Arab world and in being an effective partner in the Arab region. It needs to unify itself and be connected enough to become an economic block that will be as competitive as any other.”

Governments and the private sector have to plan ahead; it is now a matter of urgency. They are under pressure to think about the form of the social and physical infrastructure that will enable ideas to flourish to enable the shift from family-owned businesses which, Hamdan reiterated, are a major factor in the GCC today. “The focus now should be on the middle class which is the DNA for these economies to compete and be a more effective global partner.”