The prospects of knowledge-based industries are looking rosy in the Gulf Cooperation Council (GCC) but the regional sovereigns need “clear” strategies to attract foreign investments and expand necessary financing structures to develop such industries, according to Gulf Organisation for Industrial Consulting (GOIC).
“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,” Dr Laila Diab Shrair, strategic planning Consultant and Knowledge Economy Expert at GOIC, said.
Addressing the ‘Contemporary Functions of States from a Knowledge Economy Perspective’ seminar in Kuwait, she said “prospects (in knowledge-based industries) are still looking good for GCC countries in several industrial activities.”
Elaborating on the most important productive segments that can pave the way for knowledge-based industries in the GCC , she highlighted the water sector (water treatment), 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.
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, she highlighted.
According to 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.
The existing industries’ business model relies heavily on labour force, capital and raw materials, while knowledge-based industries’ model is based on advanced human capacities and skills developed through education and training, she said.
The expert, however, noted that GCC countries achieved a remarkable improvement by expanding the range of basic education, high school and higher education; nevertheless it often requires a parallel advancement at the level of the quality and quantity of labour force know-how.
“Although trade policies might differ, they are generally strong with specific needs to overcome restrictions and implement intellectual property and foreign investment policies,” she said, adding financial liquidity is abundant in most GCC countries, but these sovereigns need to expand necessary financing structures to develop knowledge-based industries.
Moreover, the GCC countries have a relatively advanced infrastructure allowing for the development of knowledge-based industries, but additional policy amendments are still required, she said.
On how to introduce GCC countries to the world of knowledge-based industries, given that the region lacks a proper production culture; Shrair said “we need to strengthen it by teaching children with updated curricula that include this culture and also overcome financial obstacles impeding researches to access knowledge-based industries.”