AppleTechnology Transfer toward the Diversification of the Saudi Economy

We are in the midst of a major paradigm shift in technology transfer. What previously was the domain of a few universities and multinationals in the U.S. and Europe is now shared by institutions across the globe. Innovations from underrepresented regions are no longer limited to the indigenous knowledge linked to their biodiversity and natural resources. Given the new global trend in innovation, new models for technology transfer also are emerging, particularly those that target economic development.

Noted economist and industrial policy professor Howard Pack in his 2008 article, “Asian Successes vs. Middle Eastern Failures: The Role of Technology Transfer in Economic Development,” demonstrated that technology transfer plays a central role in economic development.

Specifically, Pack examined the Asian countries that had achieved economic success since the 1960s: China, Korea, Indonesia, Malaysia, Taiwan, Thailand, and Singapore. He controlled for other variables and found that the presence of systems enabling technology transfer was one of the most (if not the most) significant factors in these countries’ economic success. These systems included technology licensing, knowledge transfer, labor mobility, imports/exports, foreign direct investment (FDI), and more. Pack’s assertion was that the Far East’s systems that enhanced technology transfer were what differentiated those countries from the Middle East, allowing them to achieve real success where the MENA region lagged behind.

Pack’s thesis that technology transfer is crucial for economic success is important, and I don’t disagree. Yet he frames it according to a duality between the most developed and the least developed countries—the haves and the have-nots. His message seems to be that countries in the latter group who want to have successful economies should follow the example of the Far East and bring in the technologies created in the developed part of the world rather than develop them themselves.

Pack’s work is extremely important. As a researcher, he was looking retrospectively at macroeconomic data and looking for dependent variables to account for the differentials in Asian and Middle Eastern countries’ economic performance. I would argue that the other variables Prof. Pack was controlling for are no less critical, but harder to quantify, than technology transfer. Specifically, global efforts to grow scientific capacity is a game changer for technology transfer, which renders the haves-have-nots dichotomy immaterial.

KAUST has pioneering scientists and engineers conducting innovative research yielding breakthrough technologies. Additionally, we are surrounded by a developing economy, and it is natural that the domestic private sector has uneven levels of absorptive capacity to transform cutting-edge technologies into innovation-intensive products and services.

KAUST and similar institutions represent a growing trend in higher education, establishing a new breed of differentiated research universities. This trend was recognized by the Times Higher Education’s new 100 Under 50 university rankings, referring to academic institutions established in the last 50 years. This Top 100 list includes institutions from 30 different countries, including many in the Middle and Far East. In contrast, THE’s overall Top 200 list includes institutions from only 26 countries and is dominated by Anglo-American institutions. These newer universities are simultaneously building scientific and absorptive capacity in their own ecosystems while generating cutting-edge research results. The prevailing model of technology transfer doesn’t apply here. What replaces it has to be strategic and integrative.

The peer-reviewed literature on economic development and technology transfer does not offer much in terms of guidance for practitioners in KAUST’s situation, where building from within is both possible and preferred. Therefore, the Technology Transfer and Innovation program (TTI) at KAUST is experimenting with various techniques to achieve success, essentially creating new models that are relevant for our situation and that of other KSA universities. Perhaps most important, KAUST is teaming up with a network of other Saudi universities to share success stories and challenges from the collective experience. Tech transfer at KAUST seeks to build strategic relationships with key in-Kingdom partners and focuses on engaging early and integrating holistically across functional areas and supply chains.

At KAUST, we are planting the seeds that grow our region’s innovation ecosystem. We have found there are niches where we can engage the right companies who share our vision. For example, TTI plays an active role in furthering technology development. By engaging Saudi companies early on in pilot-scale projects, demonstrations, and other efforts to “build things out,” we advance both the technology and market development. When we couple the technical success with demonstrating the market need, the partner is more likely to find the risk-reward proposition acceptable. Instead of waiting for a mature technology embodied in a product to be brought in from abroad, domestic firms can adopt new technologies and create value in the Kingdom.

This is the essential message of the Pack article: Technology transfer is a closely—perhaps the most closely—linked variable to economic growth when comparing performance of East Asian and Middle Eastern economies. However, the impacts of growing domestic scientific capacity and the growth in absorptive capacities in domestic firms are critical.

So if yours is a Saudi company interested in moving into the innovation-driven business model and accelerating on that pathway, we would love to talk to you about how we can work together.

Reblogged with the permission of King Abdullah University of Science and Technology http://www.innovation.kaust.edu.sa

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