JEDDAH, 6 June 2008 — Saudi Arabia stands out among the GCC countries to leapfrog to knowledge economy, according to a Malaysian expert.
Professor Mahendhiran S. Nair, head of economic and business modeling unit at the School of Business of Monash University’s Sunway Campus in Malaysia, who participated in the ‘Knowledge Economy Behind the Scenes Forum’ held at the Westin Hotel on Monday, told Arab News: “The Kingdom has great potential to leapfrog to knowledge economy as it has the 7i framework.”
According to him, the 7i framework are: infostructure, intellectual capital, incentives, interaction, institutions, integrity and innovative capital. “However, some of the Organization of the Islamic Countries (OIC) have been facing challenges in their effort to develop the framework,” he said. Information and communication technology (ICT) development in many OIC-member countries have a lot of room for improvement. Shortage of skilled workforce, especially in science and technology, is seen in most of these countries, where incentives for innovation are not competitive vis-a-vis the risk factors, he said.
Also, he added, stakeholders’ interaction has been “Patchy.” What is more, he said, institutions to support innovation and development in OIC countries are not coordinated. “Their integrity levels are not high enough to attract foreign direct investment,” he said, adding that they also have a narrowly focused economic agenda. There is lack of diversification. Also, wealth is not equitably distributed across the population.
What the OIC countries need to do is to start investing heavily in infrastructure and infostructure, he said. They need to have a clear and coherent plan for developing the information and communication highway. The plan should address digital divide (rural/urban, small-large enterprise). They should bridge the digital divide, which should be cost-effective, with new technologies including satellite, and roll out broadband. There should be a greater competition in key ICT sectors. They should have programs to raise ICT awareness and adoption rate in their rural areas. Speaking about developing intellectual capital, he said OIC countries must increase investment in education, create a technology savvy workforce and increase supply of R&D workers. “There should have a curriculum that enhances creativity from an early age and a center of educational excellence.
Integrity can be developed by these countries through transparent processes, and instill good governance by employing e-government initiatives, and adopt best practices, global benchmarks and safety and security.
These countries should offer incentives by allowing access to public funded research, framing policy to enhance resource to support R&D, patenting and commercialization and fiscal and non-fiscal policies to encourage R&D activities among firms. Other incentives should include low tax rates, and target policy to enhance resources, private funding and equity markets. GCC countries should promote interaction by establishing communication between government agencies, between government agencies and private sector, and establish communication with the general public and social groups. They should enhance industrial clusters as part of the regional innovation system. Above all, they should adopt focused management policies by establishing national innovation councils, fostering and promoting ‘think tanks’ and have a legal framework for a knowledge society.
Dr. Timo J. Hamalainen of Sitra, the Finnish Innovation Fund, said; “Finland is at the frontier of knowledge economy.” Finland has a world-class infrastructure and infostructure and so has become a center for world-class research and knowledge economy and knowledge society. “You can gauge this from the fact that a small country like Finland with a five million population produces more than 1,500 PhD’s every year,” Hamalainen said.
According to him, the everyday wellbeing of people is the ultimate goal of social and economic development. “Economic competitiveness and welfare state serve this goal,” he said, adding that superior knowledge, infrastructure and markets produce world-class environment for the wellbeing of citizens and innovative activities of the corporate sector.
In Finalnd, he says, firms develop products and services with superior value-added qualities. “In fact Finland is developing the first economically, socially and ecologically sustainable social model for the coming century,” he added.
Kathryn Raleigh, director at Dublin-based Irish Business and Employers Confederation, said two key factors for developing knowledge economy were education and skills. Infrastructure related to transportation, training, innovation and productivity are important. “What is more important is that governments must open up their economies and build a rapport with private sector, especially industry,” she said. “Above all, all stakeholders must know what the vision is,” she added.