Complex Made Simple

GOIC diagnoses industrial investment opportunities that attract private sector

The Gulf Organization for Industrial Consulting (GOIC) took part in the forum on technological capacity building in the field of modern technologies in the Arab countries. The forum was organised by the Arab Organization for Industrial Development and Mining, Amman Chamber of Industry and the ESCWA Technology Centre under the patronage of His Royal Highness Prince El Hassan bin Talal at the headquarters of the Chamber in Amman, Jordan on the 15th and 16th of December 2014.

Dr. Laila Diab Shrair, Strategic Planning Consultant at GOIC Secretary General Office delivered a paper entitled “The Importance of Innovation in Transforming Applied Research into Competitive Industrial Products”. The paper was presented during a session that was dedicated to discuss and diagnose investment opportunities capable of attracting industrial private sector to transform applied research into industrial products or pilot projects.

Dr. Shrair stressed the importance of innovation and research centres to the development of industrial institutions and to industrial development, as they contribute in empowering industrial institutions to meet the new requirements in the midst of changing global environment. The latter requires competitive advantage, as innovation and creativity in the fields of production are the catalysts of industrial competitiveness.

They also help adopting adequate mechanisms according to practical frameworks to develop and promote innovation capacities of industrial institutions. Dr. Shrair also opined that innovation helps guaranteeing the future of these institutions and improving their performance and competitiveness on the market through continuous innovation linked with research and development. In fact, innovation and creativity are the key factor behind the development of products and production processes. They contribute in the shift toward knowledge-based industries, as knowledge is one of the key aspects of today’s productivity.

GOIC Strategic Planning Consultant then gave a series of examples on strategies and intervention policies in the field of knowledge-based industries from Korea, Singapore, Taiwan, Malaysia and Finland. According to Dr. Shrair, examining the status of research centres and scientific research environment reveals the increasing interest of governments in scientific research throughout the last five years in GCC countries. These countries stress the importance of scientific research to economic diversification and development in their national visions, development strategies and sector strategies.

Dr. Shrair said: “Spending on scientific research and development in the majority of GCC countries is modest, with the exception of the State of Qatar that has allocated 2.8 per cent of its GDP in 2009 to scientific research and development. In this regard, developed countries allot around 2.5 per cent of their GDP to research and development activities for which the private sector pays around 80 per cent of their total cost. Nevertheless, only 0.2 per cent of the GDP is spent on research and development in GCC countries according to UNESCO’s 2010 report (knowing that some of its figures are approximate) with a quasi absence of the private sector. Spending on scientific research in GCC countries is low compared with the 3.5 per cent of the GDP spent in Finland, 3.11 per cent in Japan, 3.7 per cent in Sweden and 4.7 per cent in Israel.”

Dr. Shrair reiterated that GOIC’s role in the area of investment opportunities attracting private sector in GCC countries is to support industrial development projects in these countries. To do so, GOIC develops industrial and economic databases, prepares an annual report on the readiness of GCC countries to move to knowledge-based industries, implements several knowledge industry projects in member states like Bahrain and Kuwait in collaboration with the World Bank and introduces numerous industrial investment opportunities in targeted public and private sectors.

The consultant offered a number of priority opportunities that can be adopted by big, medium and small companies of the private sector such as: ultrafine particles in the steel industry, water sector, addition of nano-particles to concrete in the construction industry, bio-stimulation in the petrochemical and chemical industries, solar energy techniques enhanced with nano-particles, sensors for environmental and chemical applications, nano-particle-based smart glass in the automotive and construction industries, biopolymer-based food delivery systems, personal care products for GCC countries, medical care diagnosis point, carbon nano-tubes for energy storage technologies.

At the end of her presentation, Dr. Shrair stated that GCC countries need to improve their performance according to the Competitive Industrial Performance Index (CIP) to identify new industrial scenarios. The CIP is based on quantitative indicators and data allowing policy makers to work according to a new manufacturing scenario that is based on manufacturing for change, fast technological progress, small economic gap and the core of competitiveness based on innovation, products and high quality resources. The ultimate objective is to achieve fast and deep technological change. In fact, globalisation has affected production systems of every industry with the emergence of new competitors. Thus, a completely new context has emerged to sustain industrial development and it is particularly challenging for countries that did not realise their industrial potential yet.

In conclusion, Dr. Shrair highlighted a number of recommendations notably that governments and industrial investors should remember that knowledge-based industry strategies are based on competitive advantage in the countries. Therefore, these industries are extensive and benefit from proven competencies. In addition to that, widespread political reforms are needed to guarantee a vital business environment that reduces bureaucratic barriers, facilitates access to financing and reinforces legal and regulatory frameworks. Moreover, education reform is the first step toward finding a solution to the pressing need for human capital. In addition, governments’ role should be promoted to provide knowledge networks and public private partnerships need to be encouraged to enhance initiatives targeting knowledge-based industries market. In this regard, supporting SMEs needs to be a priority to encourage them to move toward knowledge-based industries and more specialisation.