Innovation in the Middle East – What's Missing?

by Kamal Hassan

Innovation in the Middle East - What's Missing?There’s something missing in the Middle East when it comes to innovation. I will call it The Missing Link between Innovation Strategy and Leadership. I have a theory about what it is, but first let me share some statistics that I think are relevant.

GE just released its 2012 Global Innovation Barometer, which was based on survey results from 3,000 senior business executives in 22 countries, including the UAE and Saudi Arabia. The key findings weren’t all that surprising. For example, 92% agree that innovation is the main lever to create a more competitive economy, and nearly 9 in 10 executives believe innovation is about partnerships, not individual success. These beliefs reflect the changing nature of innovation, from being a mysterious process led by researchers to a way of thinking and adding value embraced by organizations at every level.

One thing that was surprising about the survey results, at least to outside observers, was the level of enthusiasm for innovation in countries like the UAE, Turkey, Algeria and Saudi Arabia. With 90 out of 100 points, the UAE scored higher than any other country when it came to “Innovation Optimism,” or how optimistic the executives were that innovation will result in improved quality of life for citizens.

For anyone involved in the local innovation community, this statistic makes perfect sense. I’ve personally seen the energy at regional innovation conferences. There is a real interest in innovation here, and an earnest belief that innovation will make a difference, not just for companies but for society.

From large-scale projects like Masdar and innovation initiatives at Dubai Port World, to organizations like KAUST and the growing number of SMEs and startups that are launching innovative ideas, the UAE and Saudi are developing a regional culture of creativity, uniqueness and innovation for the individual, business and society.

As the GE survey showed, this culture is rooted in a long-standing respect for higher education and the sciences. Both the UAE and Saudi scored above average on areas related to STEM (science, technology and engineering) education and R&D collaboration between universities and companies.

On the other hand, both countries need improvement, at least according to survey respondents, when it comes to R&D spending, high technology exports and venture capital deals. Both countries also rated slightly above average when it comes to the patents. However, the report stated that the low number of patents filed in the UAE and Saudi does not compare favorably to innovation-driven nations. (According to WIPO, in 2010, the UAE filed 113 patents and Saudi filed 804. Compare this to the UK with more than 42,000 patents filed and the US with more than 415,000 patents filed the same year, and you can see there is room for improvement here.)

None of this comes as a surprise, I think. But what is interesting is the story these numbers tell. Here you have a high level of interest in and discussion about innovation. You have an understanding of the importance that technology and science and the role that it can play in producing innovation. But you have little commitment (as evidenced by the lack of R&D spending and venture capital) and little follow-through, at least when it comes to high technology innovations, and I would argue other types of innovation, as well.

Why do you think this is? I think it underscores what I have seen for some time – organizations here have the will but not the way.  They understand the benefits of innovation, but don’t know how to make it happen. The leadership is there, the strategy is getting better, but the execution falls short. Innovation execution is the missing link.

So, how do we get better at innovation execution? Every organization is unique, so there is no one-size-fits-all answer. But there are some key criteria that need to be in place to enable successful innovation execution. At a minimum you need:

  • A system for capturing and processing ideas from inside and outside the organization. There are a number of approaches you can use to collect ideas from employees, partners, customers, citizens and the market. You’ll also need a way to evaluate all the ideas you get and align them with your strategic goals.
  • Investment in R&D and technology transfer. Companies in the UAE are notorious for having small (or no) R&D budgets. But research and development is a very necessary part of innovation execution. Whether you have internal teams, or use open innovation networks to find solutions, you need a way to try new things and resolve innovation challenges. You also need to actively search out and buy IP (intellectual property) that helps you innovate your offerings – as well as develop and sell IP.
  • Methodologies for transforming an idea into an innovation. The methodology you use will depend on what type of innovation you are developing (e.g., product, service, process, business model, etc.). Using a proven process for innovation project management will help you bring your ideas to fruition and reduce inherent risk.
  • A go-to-market plan for launching the innovation and optimizing the return on investment. With so much competition today, you need a plan for making sure your innovation doesn’t get lost in the fray. This applies to non-profits and governments also (ever rolled out a new system that nobody uses because they don’t know about it or don’t understand the benefits?). You also need a system for tracking customer feedback in the early stages, and a process for implementing changes as needed.

When it comes to innovation, you need three key things: strategy, execution and leadership. In the UAE, we’re getting pretty good at two of these, but we need to work together on innovation execution to realize more tangible benefits.

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Kamal HassanKamal Hassan is President and CEO of Innovation 360 Institute, an innovation management and operation advisory group based in Dubai. Mr. Hassan works with public and private organizations on business model innovation, innovation strategy, innovation project execution and organizational change. He leads international workshops on Business Model Innovation.

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