GCC could become innovation hub:WEF

GCC could become innovation hub:WEF

Khaleej Times - 03/08/2007

(MENAFN - Khaleej Times) DUBAI � The GCC countries are global innovation hubs in a world economy characterised by strong demand for energy and increasing globalisation.
Regional stability also gives the GCC countries the opportunity to focus on enhancing their human capital at all levels, investing heavily in education while proceeding carefully with political and institutional reforms to support their growing economies and societies.
This, the third scenario put forward by the World Economic Forum (WEF) entitled The Fertile Gulf, is the most optimistic of the three outlined in its World Scenario Series: The Gulf Cooperation Council (GCC) countries and the World: Scenarios to 2025". A summary of Oasis, a positive but not excessively optimistic scenario for the GCC countries, appeared in Khaleej Times on 26 June 2007, and a summary of the less optimistic scenario, Sandstorm, was published on 15 July 2007.
Under the Fertile Gulf scenario, the global economy benefits from increasing globalisation and trade in a harmonious global environment and reaches growth rates of over 4 per cent. This contrasts with Oasis in which global growth averages around 3-3.5 per cent and Sandstorm in which there is a global recession in 2010-2012, followed by slower growth.
The Fertile Gulf also sees strong global demand for oil of almost 2 per cent per annum, driven particularly by China and India, capacity constraints and delays affecting some large OPEC projects that drive up prices from 2009-2012. Saudi Arabia's excess capacity falls under 2mbd as production rises above 12mbd, causing sustained price rises. Prices are well over $110 in 2025.
The Fertile Gulf is written as a business magazine interview and recounts the experiences of a successful young entrepreneur from the GCC region. This entrepreneur has taken advantage of the changes between 2007 and 2025 to develop a range of global enterprises, including the launch of Shariah-compliant store cards, a globally popular mint drink, a media company, and the Gulf's largest employment and financial services company for foreign workers, who win better pay and working conditions across the region.

2007-2012

The entrepreneur's success is attributed to the dedicated financial support governments have given entrepreneurs and research initiatives, a determination to use oil wealth on education and to implement economic and political reforms that have jump-started development towards economic diversification.
The WEF report says that by creating more business friendly regulatory and institutional environments and establishing funds for the development of new business ideas, "the GCC countries effectively begin to emulate the 'Silicon Valley' model".
The scenario also factors in the collapse of the Doha Round in 2008 and the subsequent exceptional summit in 2009 of the G20 countries, which also includes Saudi Arabia and observers from the GCC countries. The summit is held in Jeddah. In turn, this summit precipitated the 2009 Islamic Congress that influenced negotiations regarding the nuclear stand off with Iran and the progress of cease-fire negotiations between Israel and Palestine.

2013-2020

Over this period, oil markets are still bullish but less volatile and do not distract GCC countries from private, non-energy sector development. As a result, national unemployment falls and there are a greater number of highly skilled jobs across a variety of sectors.
There is also a series of international bilateral agreements to financially support research projects in exchange for intellectual property (IP) rights, leading to an innovation explosion in the GCC countries. "Incremental improvements in institutions to manage the burgeoning entrepreneurship combined with a more influential business community further support regional development," the report states.

2021-2025

This period sees a number of political reforms, which proceed at a different pace across the GCC. Western democratic ideals are not transplanted and instead governments generate their own models of participatory governance. And following a dramatic change in the attitude towards education in the GCC, Arab graduates are keenly sought after for positions in finance, engineering and medical sciences in Europe, Asia and North America. "The GCC countries emerge as an innovation hub, where the constraint of demographics is turned into a world-class asset," says the WEF report.
Why scenario planning?
The report explains that the scenarios are designed to encourage discussion and debate on the future of the GCC countries and allow policy and decision makers to outline the best path for future success. WEF also emphasises that "these scenarios may not, and indeed cannot, predict the future." They are useful nonetheless, says WEF, because "they do take into consideration a wide range of knowledge in order to sketch the boundaries of what is plausible; they also present storylines, logical connections and analysis which can be used to help reflect on what is possible."