The Future Of Innovation: Infrastructure And Competitiveness

Mr Hazim K. El-Naser

the future of innovation and entrepreneurship…infrastructure and competitiveness

The future of innovation is driven by the technology’s ability to create new forms of value, and where competitiveness is a major performance engine towards achieving socioeconomic success within the social, economic, policy and political schemes. In fact, technological innovation and competitiveness go hand by hand in the creation of internationally tradable products that are competitive in terms of cost and quality with those of more advanced nations.

In a national context, competitiveness is related to the innovative capacity that a country has. The process of innovation is now considered to be the driving force for competitiveness in order to maintain national sustainability, reduce poverty and increase the standards of living.

Technological innovation is driven by how much countries or firms spend on Research and Development, which involves constant improvements to cost, process, efficiency, quality and quantity of products.

The responsibility of innovation does not only lie on the private sector and firms, whereas the Governments have a very important role to play in building, improving and shaping the market economy, and in finding new means and environment for healthy governed competition. Governments should provide the following main functions: (i) provide macroeconomic stability; (ii) set up the necessary legal system and regulatory framework including competition and entry and exit laws; and (iii) address market failures i.e. having the right policies.

Improving all those aspects requires true and effective partnership between governments and their private sector in sharing this responsibility specifically through areas such as (i) education, (ii) technology and innovation, and (iii) physical infrastructure

A simple question – yet complicated and critical – that every body in our region inquires about is why Arab countries are still lacking in technological innovation and are less competitive in the world’s global market. The answer is not easy, however, some thoughts can be shared in order to identify major proposals and approaches that are of great importance to our future economies and for the sustainability of the generations to come.

As mentioned earlier the key to innovation and competitiveness is research and development (R&D). Unfortunately, despite the strong economies in some of the Arab countries, R&D expenditure is the lowest in comparison to similar economies. The only modest spending in R&D can be noticed in the academia arena, and here mostly for promotional purposes. Most of such research is theoretical and not linked to industrial and societal needs. Such R&D is mainly supported by international agencies and local governments. When it comes to the R&D for the benefit of the private sector, it is usually very minimal and lacks any sorts of financial allocations. Some private sector entities and industries allocate some financing for R&D but it is mostly for the sake of promotion, compliance with national laws or to get some benefits of tax exemption as stipulated in certain tax laws in some countries.

Mobilization of private sector resources within the Arab world to boost innovation and infrastructure development is essential to achieve long-term goals of competitiveness. However, in order to motivate the private sector, the establishment of a reordered regulatory framework and the introduction of competitive markets and commercial practices into the related sectors are essential steps to enhance the innovative role of the private sector.

The ultimate objective for the Arab countries is to enhance their living standards and to catch up with the developed world at the income and technological frontier through innovation and entrepreneurship. Increases in labour productivity, well-functioning market economy, institutional development and necessary government actions are the key to achieving sustained long-run growth in living standards.

Article © 2009 Mr Hazim K. El-Naser. All rights reserved.

about the author...

Mr Hazim K. El-Naser

Mr Hazim K. El-Naser

affiliation:   Orient For Engineering Consultancy And Design

position:  Member of the Jordan's House of Representatives; Former Minister of Water and Irrigation and Minister of Agriculture

country:  Jordan

area of interest:  Infrastructure and Competitiveness

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other books and writings by

Mr Hazim K. El-Naser

"Management of Scarce Water Resources": A Middle Eastern Experience

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