GOIC takes part in the “Contemporary Functions of States from a Knowledge Economy Perspective” Conference

The Gulf Organization for Industrial Consulting (GOIC) participated in the “Contemporary Functions of States from a Knowledge Economy Perspective” Conference held under the patronage of His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, Emir of the State of Kuwait. The conference aims to discuss means to develop governmental functions through authorities and institutions to boost productivity and efficiency, improve the knowledge investment environment and develop the knowledge structure. 

GOIC was represented by Dr. Laila Diab Shrair, Strategic Planning Consultant and Knowledge Economy Expert at GOIC. She delivered a presentation during the dialogue session on “the role of innovative environment in supporting knowledge systems” in which she shed light on knowledge-based industries and their advantages over other existing industries. According to Dr. Shrair, understanding the difference requires a comprehension of the manufacturing sector and the knowledge-based sector business models, in addition to the identification of existing clusters of knowledge-based industries. Dr. Shrair said: “The existing industries’ business model relies heavily on labour force, capital and raw materials. In contrast, knowledge-based industries’ business model is based on advanced human capacities and skills developed through education and training. It also relies on culture, expertise and multi-disciplinary scientific knowledge.” She added: “Knowledge-based industries are mainly based on preparing information, integrated efforts to transform information into other activities and the creation and spreading of new forms of knowledge and products.”

On the structure of knowledge-based industries, the Consultant stated: “We can talk about the first level of a pyramid, the base, which constitutes the economic foundations to include the five main elements of knowledge industries: a. human resources: GCC countries achieved a remarkable improvement by expanding the range of basic education, high school and higher education, however it often requires a parallel advancement at the level of the quality and quantity of labour force know-how; b. policies aiming at developing knowledge-based industries: GCC countries adopted excellent macroeconomic policies. Although trade policies might differ, they are generally strong with specific needs to overcome restrictions and implement intellectual property and foreign investment policies; c. capital and financing: finanical liquidity is abundant in most GCC countries, but these countries need to expand necessary financing structures to develop knowledge-based industries; d. innovation systems: they are the collective assets and operations creating and promoting innovation in trade applications. GCC countries are currently deploying modest efforts and they need more efforts at this level; e. infrastructure to develop knowledge-based industries: GCC countries have a relatively advanced infrastructure allowing for the development of knowledge-based industries, but additional policy amendments are still required.

The second level in the middle of the pyramid is shaped by support industries and related industries that include information services and consultation and marketing services.

As to the third level at the top of the pyramid, it includes clusters of knowledge-based industries sought after by GCC countries. 

Following a question on how to introduce GCC countries to the world of knowledge-based industries, knowing that they are welfare-states lacking a proper production culture, Dr. Shrair replied: “Knowledge-based economies and industries sometimes have a so-called “missing pillar”, a social pillar relating to social and cultural standards and values of a certain society. In fact, people’s productivity culture is still weak and we need to strengthen it by teaching children updated curricula that include this culture. It is also to be spread via media outlets that have a direct influence on people’s ideas and values. In addition to that, we need to focus on a set of values that highlights the importance of productivity and improves the social status of scientists. Furthermore, we have to overcome financial obstacles impeding researches and the work of researchers to access knowledge-based industries.”

Answering a question on the reasons discouraging foreign investors to invest in the Gulf and the repercussions on the transfer of knowledge and technology and the settlement of knowledge-based industries, she said: “GCC countries are deploying relentless efforts to develop their economic legislations to attract foreign investors. Nevertheless, these countries face a number of difficulties and challenges in doing so because of a lack of clear strategies to draw these investments in some of the GCC countries. Anyway, prospects are still looking good for GCC countries in several industrial activities.”

Dr. Shrair continued to talk about the most important productive industries in the GCC that can pave the way for knowledge-based industries. These industries are: the water sector (water treatment), an industry that is flourishing in Saudi Arabia, nanotechnology in concrete materials, bio-refineries in the chemical and petrochemical sectors, nanoparticle-reinforced solar technologies, sensors for environmental and chemical applications, nanostructure polymeric glasses for the automotive and construction industries, biopolymer-based functional food delivery systems and personal care products in the GCC. Moreover, there are metals that heavily rely on technology, plastic, chemical, composite and smart materials and nuclear energy. In this regard, the UAE has had multiple initiatives and Saudi Arabia is preparing agreements with international partners. 

Dr. Shrair concluded by stressing the important role of GOIC in the area of GCC knowledge-based industries. In 2005, GOIC prepared a study in collaboration with SRI on the readiness of GCC countries to move to knowledge-based industries by diagnosing the countries’ statuses, strengths and weaknesses. In January 2012, GOIC organised the 13th Gulf Industrialists’ Conference on knowledge-based industries and new technologies. The conference raised awareness for the importance of knowledge-based industries, their requirements and how to access them. After the conference was concluded, member states successively asked GOIC to prepare knowledge-based industry studies. In addition to that, GOIC carries out an annual diagnosis of the current situation of knowledge industries in GCC countries and their readiness to move to knowledge-based industries in accordance with global benchmarks and indicators. The annual report that the Organization puts together is then submitted to the member states. In September 2015, GOIC carried out a study on the knowledge-based industries in Bahrain in collaboration with the World Bank. The outcomes and industrial opportunities were then presented in November 2015 during “Invest in Bahrain” Forum. The Organization is also preparing a study in the same area for the State of Kuwait.