Abu Dhabi Innovation Framework

Pillars

Emirate resource

optimisation

Complete international and domestic

security

A significant and ongoing contribution

to the federation of

the UAE

Maintenance of Abu Dhabi's values,

culture and heritage

Premium education, healthcare,

and infrastructure

assets

Continuation of strong and

diverse international relationships

Create a confident, secure society, andBuild a sustainable, open and globally competitive economy

The creation of a

sustainable knowledge‐

based economy

The creation of a

sustainable knowledge‐

based economy

A large empowered

private sector

An optimal transparent regulatory

environment

Abu Dhabi Vision

The development of a knowledge based economy (KBE) is one of the five focus areas for the whole of Government of Abu Dhabi

Elements of greater effortElements of greater effort DefinitionDefinition

Develop and economy where the primary source of value creation is the origination, use, and sharing of knowledge regardless of sector

Develop the capabilities of the population ‐ through education and life long training ‐ to be able to lead the future society and economy

Manage the demographic flow so that Emirati character remains a defining factor of Abu Dhabi, with security and social harmony

Develop a framework in which the environment and its health is taken into account and balanced with the needs of the economy, society, and the needs of urbanisation and growth

Develop a large, independent private sector operating in open markets alongside a smaller government sector that designs and implements efficient and transparent regulatory frameworks

Building a sustainable, knowledge‐based economy

Managing environmental sustainability

Managing the demographic mix of the Emirate

Further developing the private sector, with optimal transparent regulation

Building human capital

World Bank Knowledge Economy IndexTop 5 countries & UAE

World Bank Knowledge Economy IndexTop 5 countries & UAE

Economic Incentive and Institutional Regime

Economic Incentive and Institutional Regime InnovationInnovation EducationEducation ICTICT

6.7

9.3

9.3

9.4

9.5

9.6Denmark

Sweden

Finland

Netherlands

Norway

UAE

f + + +

Source: The World Bank Knowledge Assessment Methodology and Knowledge Economy Index - 2008

9.7

9.2

9.5

9.2

9.3

7.0

9.6

9.8

9.7

9.5

9.1

6.7

9.8

9.4

9.8

9.3

9.6

4.8

9.3

9.7

8.6

9.4

9.2

8.242

1

2

3

4

5

# KEI ranking (out of 134)

There are four major drivers of KBE - innovation is one important factor

Innovation –Updated Policy Agenda has addressed the need to develop specific innovation policies

6

• Enhancing skills and capabilities of the citizens.

• Improving tertiary enrolment.• Enhancing technical and vocational training.

Providing attractive incentives to support a knowledge-based economy.

Continue to ensure access to high-quality ICT infrastructure

• Embed a culture of customer-service excellence through the Government Excellence Framework.

• Seek to build a culture of innovation and continuous learning in the public service.

• Extend or establish knowledge networks within industry sectors.

• Developing links with leading networks of experts in relevant sectors

• Developing an innovation strategy including clustering.

Policy Areas Mentioned in the Policy Agenda Innovation Drivers

Innovation Systems for Resource-Rich Economies (NREs):

International Lessons for the Abu Dhabi Context

Project undertaken for theGeneral Secretariat of the Executive Council, Abu Dhabi

Thomas Andersson, Elias Carayannis, Piero Formica, Sara Johansson de Silva

• Production process: multidimensional, spanning from extraction, exploration, manufacturing, and services

• High purchasing of innovative technologies rather than in-house R&D

• Resource innovation influenced by degree of collaboration with suppliers, customers, competitors, governments …

• Tendency for innovation to focus on processes and distribution of low-to-medium goods and services rather than high-value products and services

• Bulk of innovation activities in large extensively internationalized firms

Natural Resource-based Economies

Innovation output: undiversified economy(High‐tech exports as % of GDP)

S&T outputs

Scientific and journal articles, per million people

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S&T outputs

Patents Granted by USPTO, per million people

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0.0

0.5

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2.5

ICT access - not a problemInternet users per 1000 people

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Human capital (gross tertiary enrollment, %)

• Economic diversification

• The turnover of the expatriate “creative class”

• Ties among talented individuals belonging to different organizations

• Implementation of a policy for wellbeing, environmental and sustainable economy and society

• An environment conducive to the development of opportunity-based entrepreneurship

• R&D and technical innovation

• Mobilization of human resources and investments to match opportunities for economic and business development

• Governance and collaboration to underpin consistency in regard to innovation

Eight Gaps

Seed and Venture Capital

Investment Law

15

The Innovation Gap

MindsetResearch Culture

Measurement, indicator issues, CIS

••

• The Community Innovation Surveys (CIS) are a series of harmonised surveys initially executed by national statistical offices throughout the European Union and in Norway and Iceland, but later expanded to many countries beyond Europe.

• The CIS consists of a core set questions that are harmonised across all countries and diversified questions specific to different countries.

• The CIS takes a sample from all business establishments in a country, stratifying the sample by sector, establishment size and possibly region. The sample is selected to be representative in terms of sector and size of the general population of firms in an economy.

• Definitions are based on the OECD Oslo Manual for measuring innovation activities.

• For the purpose of the survey, innovation, is defined as new or significantly improved goods or services and/or the processes used to produce or supply all goods or services. .These may be new to the business or new to the market; new to the country or new to international markets.

Set of pilot data survey respondents

Sector

Size of Enterprise

Total

Large Medium Small

Services 59 52 32 143 (33%)

Commerce/Trade 34 37 26 97 (22%)

Construction 34 21 12 67 (15%)

Manufacturing 48 21 9 78 (18%)

Transport 18 6 5 29 (7%)

Financial Services11 5 4 20 (5%)

Total 204 141 88 433

Types of innovations

Size of the innovators

Sectors of innovation

Sector of innovation by type of innovation

Who is the customer for innovation?

Most innovation activities happen in the B2B sector

Market orientation

Novelty of innovation and market orientation

Novelty and Market orientation by sector

Innovation performance and ownership

Innovative behavoir of Abu Dhabi or UAE subsidiaries and subsidiaries of US, European and Asian firms

0%

10%

20%

30%

40%

50%

60%

70%

Product or process innovation Products new to international markets Cooperation

% o

f all

firm

s in

one

gro

up

Abu Dhabi or UAE subsidiariesSubsidiaries of US, European or Asian firms

But how do Abu Dhabi firms innovate?

AD firms invest in various forms of innovation fostering activities

Source: IKED/CIS Pilot Data Survey , Statistics Center – Abu Dhabi(2009), preliminary

They collaborate with others

Collaboration by sector

AD firms can still benefit from more collaboration

Share of co-operating firms, only firms with more than 250 employees

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Finl

and

Cyp

rus

Slov

enia

Lith

uani

a

Belg

ium

Pola

nd

Gre

ece

Net

herla

nds

Aust

ria

Hun

gary

Cze

ch R

epub

lic

Latv

ia

Swed

en

Esto

nia

Slov

akia

Cro

atia

Den

mar

k

Irela

nd

Nor

way

Portu

gal

Spai

n

Uni

ted

King

dom

Luxe

mbo

urg

Ger

man

y

Mal

ta

Abu

Dha

bi

Italy

Turk

ey

Bulg

aria

Rom

ania

Perc

enta

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f all

inno

vatin

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ms


AD firms also invest in R&D

Continous and occasional R&D activitiy in international comparison, firms with more than 250 employees

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Belg

ium

Net

herla

nds

Ger

man

y

Slov

enia

Aust

ria

Spai

n

Cze

ch R

epub

lic

Mal

ta

Abu

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Portu

gal

Slov

akia

Gre

ece

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rus

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gary

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uani

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Cro

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perc

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f all

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occasional R&D activitycontinuously R&D activity


R&D investment is on par with many advanced economies in Europe

Summary of main findings• Firms in the Abu Dhabi economy generate a considerable

level of innovation via the supply‐chains.

• Very small and very large firms are the most innovation active.

• Innovation active firms tend to be concentrated in three sectors: oil & gas, manufacturing, and business services.

• The oil & gas sector is the most innovative on international scale.

• These three sectors are also the most important markets and partners for innovation.

• Abu Dhabi firms make varied investments in innovation fostering activities, particularly R&D and the acquisition of new technology.

First insights into what is needed...

• Expanding innovation activities beyond the three dominant sectors.

• Increasing the engagement of middle‐size enterprises in innovation activities.

• Broadening and deepening the scope and extent of partnerships and collaborations locally.

• Fostering the demand for innovation beyond the oil & gas industry.

• Increasing the exposure of AD firms to international markets.

Index methodology

• Individual composite indices based on a mean average of normalised/standardised values• The mean and standard deviations are calculated for each metric (s)• For each metric (s), the mean (m) is subtracted and divided by the standard deviation (sd), i.e. C = (s‐m)/sd • Result is a series of index scores with a mean value of zero, i.e. a score above zero equates to an above average performance, and vice‐versa • The mean average is calculated for each metric and weighted together to create the overall composite score

Interwoven knowledge linkages

Source: Mahroum et al. (2008)

Knowledge Access Index is based on the mean average of the standardised values for the

following metrics

••Advanced Producer Service Network Connectivity

•Student outward mobility

•Internet usage (per 100 persons)

•Exports of High‐Tech products as % of GDP

Index of K now ledge Access

-0.50-0.40

-0.30-0.20-0.10

0.000.100.20

0.300.40

Sweden

Norway

Canada

Austra

lia

Finlan

dNew Z

ealan

dAbu

Dha

bi

Pilot survey data results

Source: IKED (2010), forthcoming, preliminary results

The Knowledge Anchoring Index is based on the mean average of the standardised values for

the following metrics:

•FDI/GDP

•Share of Highly Skilled Foreign population/Total population


Index of Know ledge Anchoring

-1.5

-1

-0.5

0

0.5

1

1.5

Canada AbuDhabi

Australia Finland NewZealand

Sweden Norway


The Knowledge Diffusion Index is based on the mean average of the standardised values for the

following metrics:

•Share of persons with at least tertiary education in the LF•Proportion of businesses that have cooperated on innovation (CIS)•Innovation new to firms (CIS)•Imports of high‐tech products (% of total imports)


Index of Knowledge Diffusion

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

Sweden Australia NewZealand

Finland Norway AbuDhabi

Canada


Knowledge Exploitation Index is based on the mean average of the standardised value of

• The proportion of Innovation Active Enterprises


Index of K now ledge Exploitation

-1.5

-1

-0.5

0

0.5

1

1.5

2

Canada Norway Finland Aus tralia Sweden AbuDhabi

NewZealand


Components of Innovation Index

Composite Indices

Knowledge Access

Knowledge Anchoring

Knowledge Diffusion

Knowledge Exploitation

Overall Knowledge Index

Knowledge Index Scores

Components of Innovation Index

Composite Indices

Knowledge Access (-)

Knowledge Anchoring (+)

Knowledge Diffusion (-)

Knowledge Exploitation (-)

Overall Knowledge Index (-)

Knowledge Index Scores

Summary of key findings

• AD is doing well in attracting and retaining (anchoring) innovation actors (skills, foreign firms and investments.

• AD lags other advanced NREs in gaining access to international innovation actors, be it firms, research centers, advanced markets.

• AD lags other NREs in the diffusion of innovation. This means there isn’t sufficient interaction and partnering happening among local innovation actors.

• AD is behind in its ability to exploit acquired knowledge to introduce novel goods and services (in comparison with the other advanced NREs).

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