Nurturing a Knowledge Economy in Qatar

Knowledge, as it is applied in entrepreneurship, research, and product design, is one of the key sources of sustained growth in the global economy. The advancement of a knowledge economy is a central feature of developed and developing countries alike. Innovation, along with rising investment in “intangible” assets, such as research and development (R&D) and information and communication technologies, has become ever more important as a driver of growth. Zamila Bunglawala explores whether Qatar – a country highly dependent on its oil and gas revenues – can innovate, diversify, and ultimately reach its aim of creating a knowledge economy.

Recommendations for the Qatari government and public institutions:

• Looking to the Small Business Innovation
  Research program in the United States as a
  model, the Qatari government should help
  to generate demand for research that is then
  transformed into viable businesses through
  public procurement initiatives. The Small
  Business Innovation Research program allocates
  2.5 percent of the total research budgets
  of all federal agencies with budgets over $100
  million to contracts or grants for small businesses.
  The Qatari government could set a similar
  target of funds from research budgets to be
  allocated to small businesses.
   
• Prizes should be granted for business ventures
  and innovations. The National Business
  Plan “Al Fikra” competition offers a useful
  model for incentivizing entrepreneurial
  ideas. The competition allows undergraduate
  and graduate students, as well as professionals,
  to present business plans to a consortium
  of higher education institutions and business
  development groups, who then help convert the
  best ideas into viable businesses by providing
  advice and funding.35 Public institutions, such
  as the Ministry of Business and Trade, Enterprise
  Qatar, and the Ministry of Higher Education
  should now take similar action. In so doing,
  risk-taking behavior will be encouraged
  and entrepreneurs rewarded early on in the innovation
  process, encouraging them to continue
  taking risks. Additionally, national prizes would
  add to the prestige associated with innovation
  and business development and therefore grant
  greater cultural acceptance. The National Business
  Plan competition, launched in 2011, is the
  first of its kind to seek to reward innovative ideas,
  rather than only final products. Such projects
  should be emulated.
   
• Enterprise Qatar should provide financial
  incentives for Qatar’s equity funds and venture
  capital entities to invest in and provide
  financial support for SMEs. This will increase
  small and fledgling businesses’ access to funding,
  through private or public-private equity
  funds, enabling entrepreneurs to advance their
  projects and ideas.

Recommendations to Qatari schools and universities:

• Schools and universities in Qatar can help
  foster a culture of business development and
  risk-taking by ensuring that these skills are
  taught as an integral part of the educational
  curriculum. This, in turn, will encourage more
  students to become involved in business and
  eventually contribute to the transfer of knowledge.
  By adding such classes, a new generation
  of Qataris will be more likely to venture into the
  private sector, thus contributing to the development of a knowledge economy.
   
• Universities should expand the incubation
  role currently offered by QSTP for technology
  innovation, through which students
  can gain access to the support of Enterprise
  Qatar, Silatech, as well as QSTP. In this way,
  a stronger link can be forged between education
  and business creation. Business incubation
  by universities will help subsidize risk-taking,
  thereby reducing risk aversion. It will also help
  foster an environment in which universities
  and students are willing to adopt new ways of
  learning through a combination of research,
  education, and business creation. Universities
  should therefore provide institutional support
  to young people with viable business ideas by
  absorbing the initial start-up costs and risks as
  well as providing infrastructure support. By
  doing so, institutions of higher education can
  enable real projects to be designed and implemented
  by students, within universities, in their
  early stages.
   
• Qatar’s education system, from the primary
  school to university level, needs to support
  and meet the requirements of its economy
  to ensure immediate and long-term stability
  and growth. A comprehensive reform program
  of how schools and universities in Qatar can
  meet the government’s objectives for a knowledge
  economy, as outlined in the National
  Development Strategy and Qatar National Vision
  2030, should be undertaken. Courses emphasizing
  cognitive problem-solving, creative
  thinking, and vocational and technical skills
  should be emphasized.

Recommendations for the private sector in Qatar:

• Qatar’s private sector can aid in the development
  of the knowledge economy by
  improving access to finance. The QCCI and
  QBA should lobby financial institutions in Qatar
  to increase bank lending for local enterprises
  from the current 0.5 percent to the current
  non-GCC level of 13 percent, and the World
  Bank target rate of 21 percent for SMEs.
   
• The QCCI and QBA, working in conjunction
  with Enterprise Qatar and similar organizations,
  should draw up a new regulatory
  framework to increase transparency and
  banking competitiveness in financial lending
  to SMEs. In this way, subsidized bank lending
  can be effectively monitored and evaluated
  to ensure that it facilitates the establishment of
  new businesses and new growth for existing
  ones.

Recommendations for international organizations:

• Drawing from the Tunis Declaration, the
  World Bank, through its Education for
  Knowledge Economy program, can provide
  Qatar with direct support, guidance, and
  expertise to advise on improving the Qatari
  education system. The Bank and similar organizations
  can also help ensure that networks
  of innovation and knowledge economy experts
  are made known and available to Qatar. This
  support will help Qatar further advance its
  knowledge economy by increasing the skills
  levels of the workforce, guiding local businesses,
  and ensuring positive movement toward
  meeting the World Bank target of 21 percent
  bank lending for SMEs.