A Third Pathway

Reblog of my post on Cisco EMEAR Regional Thinker Series – Technology Transfer in Saudi Arabia: A Third Pathway

Used with the permission of The EMEAR Network http://newsroom.cisco.com/emearnetwork/.

Western technology transfer offices typically take one of two approaches to commercialization: licensing to an established company, or licensing to a startup. These two paths bring their own benefits and challenges. And both are well defined, extensively studied, and supported through myriad initiatives and resources.

These West-centric approaches are, unsurprisingly, tailored to the needs and capabilities of Western firms. When King Abdullah University of Science and Technology (KAUST) works with domestic firms beyond the Saudi ‘majors,’ we generally find that many have minimal experience and internal capacity to recognize, apply, and assimilate technologies and create new markets. In other words, they lack absorptive capacity. This is widely recognized as a barrier to technology transfer.

Which path, then, to choose? There is another, third pathway—one that more fully addresses the market realities of today’s Saudi Arabia. To understand why technology transfer in Saudi Arabia requires a new approach, one must grasp the economic drivers in the Kingdom today—and the mission set forth by KAUST.

Obstacles to innovation

Saudi Arabia is considered an emerging market. The overdependence on natural resources and the challenge it presents to diversifying the Kingdom’s economic base are well known. When looking at emerging economies, there is often discussion of nations playing “catch-up,” or “leap-frogging” technologically. What does this mean? Less technologically advanced nations can benefit by accessing existing technology from more advanced nations. Since they do not have to develop inventions from scratch, they avoid expensive pitfalls, failures, and false starts. Such low-risk technology development is one way firms can build absorptive capacity.

But Saudi Arabia is primarily a consumer of imported technology products. It has not largely been engaged in catch-up; its strengths seem to lie in managing imports to meet domestic needs. Yet in its ambitions to transition to a knowledge economy, it needs to leapfrog ahead. What is the role of a world-class university like KAUST, and specifically, its technology transfer function, in this context?

Technology transfer with a domestic focus

KAUST is a research university generating globally competitive, cutting-edge technologies. It has a focus on Saudi economic development written in to its mission. Given this mandate, KAUST’s technology transfer office does not simply license inventions to the highest bidder abroad. This would lead to intellectual capital flight. Although the term capital flight usually refers to monetary assets leaving a country, the loss of intangible assets such as intellectual property is no less detrimental in today’s knowledge economy.

A core objective of technology transfer at KAUST is to license technologies within Saudi Arabia. We believe that retaining intellectual capital in-country will lead to increased value creation and knowledge-based opportunities for employment.

By helping industries “catch up” and by limiting intellectual capital flight, KAUST hopes to build Saudi Arabia’s absorptive capacity. These goals are achieved through early engagement and close collaboration with Saudi firms. They comprise assisted technology transfer—the third pathway for technology commercialization.