Innovation concept development in the UAE

Innovation concept development is an important pillar of the UAE’s Vision 2021. The objectives of the UAE’s Vision 2021 initiative, which was launched in 2010, were to:

  • develop human capital within the country,
  • decrease dependency on oil,
  • enhance the country’s global competitiveness and,
  • drive an innovation concept development culture in the organisation (UAE Government, 2019).

Furthermore, the UAE government has made it a priority to improve its Global Innovation Index ranking. Consequently, the UAE improved from 41st position to the 35th position in 2019.

Importance of the innovation concept development in the UAE’s Vision 2021

The requirement of the innovation concept development within the country in accordance with the ‘Vision 2021’ initiative has encouraged the UAE government to launch various instigated programs. Starting from 2014, the country came up with the ‘National Innovation Strategy’, and 2015 was declared as the ‘Year of Innovation’. The 2015 declaration was done to support the National Innovation Strategy which in turn supports the UAE ‘Vision 2021’. The UAE government also positioned itself as a worldwide leader in expansion and invention. It was found that innovation concepts can be encouraged in organizations by endorsing the philosophy of innovation in different administrative operations. This can be achieved with a well-established practice that augments government official work. Ministry of Finance in the UAE is dedicated to creating an environment apposite for innovation within the UAE and in assisting the UAE’s dream (Ministry of Finance, 2015).

The country has come to regard innovation concept being essential in:

  • improving the quality of people’s lives,
  • increasing their economic diversification,
  • enhancing their knowledge economy,
  • improving competitiveness,
  • creating high skilled jobs and,
  • promoting entrepreneurship.

Innovation has become a fundamental tool towards staying competitive in the market and being economically successful. The UAE government has shown that development of innovation concepts are required to gain access to international market and platform (The Government of Abu Dhabi, 2008), and companies such as The Municipality of Abu Dhabi City (ADNOC) and the Department of Economic (MUBADALA) have come up with innovative development in oil and other developmental business economic activities.

An innovation enabling environment

Creating an innovation enabling environment has become the key to the success of innovative endeavours. In the UAE, the country created an innovation enabling environment in endeavours such as:

  • innovation regulatory framework,
  • technology infrastructure,
  • enabling services,
  • investment and incentives (INSEAD, 2012).

Their innovation regulatory framework aimed to promote innovation through rapid enactment of relevant legislations needed for developments like procurement of intellectual rights and an effective registration process. The country also aims to enable services by setting up various educational and R&D institutions (INSEAD, 2012). These actions are expected to incentivize innovation and entrepreneur incubators. This will help lead the country in innovation work in line with its Vision 2021 mission.

The UAE government believes that innovation can be mainly harnessed through technology. Hence, the country aims to ensure bringing the best technology infrastructure that will enable effective channels of communication and promote innovations (INSEAD, 2012). The government is also seeking to invest in generating innovative ideas in coming up with new products and services.

Innovation champions

There are three innovative champions:

  1. innovative individuals,
  2. innovative companies and institutions and,
  3. innovative government (INSEAD, 2012; UAE Government, 2015).

The innovative individuals are the human capital that has become the cornerstone of innovative concepts. The government in the UAE aims to develop individuals and entrepreneurs that will help bring innovations into the country. They also aim to engage the best global talented scientists and innovators in the development process.

For innovative companies and institutional champions, the UAE aims to promote innovation and development from small to large scale businesses. Many small and medium scale enterprises (SMEs) have become effective in bringing innovations to the country.

As for the innovative government, many efforts are taken up in providing citizens in private sectors and public sectors with efficient services to initiate innovation and development. The government of the UAE in recent years has been making efforts to encourage its entities to allocate 1% of their budgets towards innovation concept development  (INSEAD, 2012; UAE Government, 2015).

Development of innovative concepts in priority sectors

The UAE government points out certain sectors as the priority sectors that are considered to lead innovation. These sectors include:

  • the renewable and clean energy sector,
  • transportation sector,
  • technology sector,
  • education sector,
  • healthcare sector,
  • water resource sector and,
  • Astro science  (INSEAD, 2012; UAE Government, 2015).

Energy

Since there has been a growing demand for energy, it has become a necessity for many countries across the world to innovate to bring renewable and clean energy. In order to initiate such changes, the UAE has been engaging in setting up various projects that will help the country to lead global innovative concepts. These projects include:

  • Masdar,
  • Mohammed bin Rashid Al Maktoum Solar Park and,
  • the Emirates Nuclear Energy Corporation (INSEAD, 2012).

Transportation

Transportation is the most effective way of boosting the economic growth of a country. The UAE is one of the frontrunners in the well-developed transportation sector. Some of the world’s most successful airlines like Emirates and the Etihad belong to the UAE. These airlines have been working as the pioneer in the development of innovative concepts in their sector. The UAE also calls for eco-friendly air and sea transportation across the country and on the international platform.

Technology

The UAE aims to bring a range of innovative technology. Since technology has come to occupy the most significant in today’s world. To bring innovation, the UAE has taken some technological initiatives such as the launch of ‘The Smart Government’, and ‘The Smart City’. The MUBADALA owns the Global Foundries which the world’s second-largest semiconductor manufacturing plant. Research centres have been developed to initiate technological and educational innovations such as:

  • the ‘The Institute Center for Microsystems (iMicro),
  • ‘The Institute Centre for Smart and Sustainable Systems (iSmart),
  • Khalifa Semiconductor Research Centre (KSRC) at Khalifa University   (INSEAD, 2012).

Healthcare

The UAE has also been launching a myriad of initiatives in order to promote innovative concepts in the healthcare sector. The country has an anti-cancer drug manufacturing plant. It also held the first biotechnology innovative incubators at Abu Dhabi University. Furthermore, the country aims to initiate with the ‘Abu Dhabi Vision 2030’ development and innovation in pharmaceuticals, biotechnology, and life sciences, through the Abu Dhabi Telemedicine Centre offers.

Water

The UAE also takes the issue of water sustainability issue as a stringent issue. The country has been launching an international prize of $1 Million for those who can find sustainable solutions for water shortages across the world (INSEAD, 2012). The innovative endeavour is expected to desalinate and purify water. The Masdar Institute Centre for Water and Environment (iWater) of the UAE aims to create knowledge and technologies that will help address water issues (INSEAD, 2012).

Space research

The UAE government has been keen in establishing advanced space research centres through various innovative development such as the ‘Emirates Institution for Advanced Science and Technology (EIAST) and Al Yah Satellite Communications Company (Yahsat). The country aims to promote space innovations by enhancing their research and technology (INSEAD, 2012).

Challenges in the achievement of the UAE’s corporate vision for innovative concepts

Innovation is required for survival (PwC, 2011). With the changing demands of customers and upcoming technologies, there is an intense need for strategic change in terms of innovation and modernization. In the year 2006-2008, the National Science Foundation found that out of 1.5 million profit-making organizations, only 9% were active innovators. These organisations strive to mend and re-invent merchandises, operations and brands. This entails a lot of people within the company along with many outsiders with more arduous operations, assemblies and practices to confirm that all the organization’s goals are being met. Pointing about mergers and acquisitions, Bena & Li(2014) elucidated that businesses with numerous patents are more expected to be acquirers. On the other hand businesses with huge expenditures on R&D are more expected to be acquired. This brings innovation in the organization, and this also remains as the major challenges of many organizations. The UAE has also continuously emphasized that the country and the neighbouring countries political and instability have been a major challenge in bringing innovative concepts (IBP Inc., 2016).

References

  • ADNOC. (2016). Abu Dhabi National Oil Company (ADNOC).
  • BENA, J., & LI, K. (2014). Corporate Innovations and Mergers and Acquisitions. The Journal of Finance, 69(5), 1923–1960. https://doi.org/10.1111/jofi.12059
  • Department of Economic. (2014). Home – Department of Economic Development.
  • IBP Inc. (2016). United Arab Emirates Internet and E-Commerce Investment and Business Guide – Strategic and Practical Information: Regulations and Opportunities. Washington D.C.: Lulu.com.
  • INSEAD. (2012). The Innovation Capabilities of Nations: Five Key Performance Measures. Abu Dhabi.
  • Ministry of Finance. (2015). United Arab Emirates Ministry of finance.
  • MUBADALA. (2016). Mubadala Development Company | Abu Dhabi, United Arab Emirates.
  • PwC. (2011). Demystifying innovation Take down the barriers to new growth. New York.
  • The Government of Abu Dhabi. (2008). The Abu Dhabi Economic Vision 2030. New Zealand.
  • The Municipality of Abu Dhabi City. (2014). The Municipality of Abu Dhabi City.
  • UAE Government. (2015). UAE National Innovation Strategy. United Arab Emirates Ministry of Cabinet Affairs: The Prime Minister’s Office.
  • UAE Government. (2019). Innovation. Retrieved November 8, 2019, from UAE Government website: https://www.government.ae/en/about-the-uae/the-uae-government/government-of-future/innovation-in-the-uae

Priya Chetty

Partner at Project Guru
Priya is a master in business administration with majors in marketing and finance. She is fluent with data modelling, time series analysis, various regression models, forecasting and interpretation of the data. She has assisted data scientists, corporates, scholars in the field of finance, banking, economics and marketing.
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