In addition to an Information and Communication Technology infrastructure, a skilled labor force and a supportive environment are necessary to the balanced development of a knowledge-based economy. Without sufficient human capital and policies in place to promote the use of adopted technologies, their full potential may not be realized. This paper uses a cross-country perspective and various economic indicators to assess the development of Gulf Cooperation Council countries in the dimensions of a knowledge economy.

Knowledge-Based Economies and Basing Economies on Knowledge

Skills a Missing Link in GCC Countries

Krishna B. Kumar, Desiree van Welsum

ResearchPublished Jun 4, 2013

While an Information and Communication Technology (ICT) infrastructure is a crucial ingredient of a knowledge-based economy (KBE), a skilled labor force and a supportive institutional and business environment are equally important in that they facilitate an economy to use knowledge in a way that is appropriate to its level of development to increase productivity. Skills, education, and training are given their own importance in many countries, but these factors are not given as much attention as technology in discussions of the knowledge economy. However, without sufficient human capital and the appropriate policies in place to take advantage of adopted technologies, their potential is unlikely to be realized. This paper adopts a cross-country perspective and uses indicators and sub-indicators developed by various economic organizations to assess the Gulf Cooperation Council (GCC) countries in terms of their development in the various dimensions of a knowledge economy. This assessment finds that, while the GCC countries have performed well in providing a physical ICT infrastructure, they need to focus more on human capital and the business environment to foster the balanced development of their knowledge economies.

Key Takeaways

While Gulf Cooperation Council (GCC) countries have made great strides in establishing an Information and Communication Technology (ICT) infrastructure, most are still below the trend line of ICT development, as captured by the ICT Development Index, given their per capita gross national income.

  • Inadequate skills, among other factors, are lowering their composite development rankings.
  • Business regulations limiting the share of foreign ownership in GCC countries have lessened the pace and degree of telecommunication market liberalization.
  • Some GCC countries lack extensive, reliable fixed networks to cover the majority of the country.
  • There is investment bias toward the energy and real estate sectors.

Progress in education has not kept pace with improvements to ICT infrastructure in the GCC countries.

  • Nationals in most of the GCC have guarantees of public employment, leaving a large part of the private-sector work, including in technical fields, to expatriates.
  • There are low levels of digital literacy among the native population.

Recommendations

  • Ensure progress in education and technical skills as much as in Information and Communication Technology (ICT) infrastructure.
  • Further liberalize the fixed, mobile, and Internet and broadband markets and roll out high-speed broadband networks.
  • Implement policies aimed at improving ICT skills and digital literacy and raising ICT awareness.
  • Enhance national innovation by improving the regulatory environment.

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Kumar, Krishna B. and Desiree van Welsum, Knowledge-Based Economies and Basing Economies on Knowledge: Skills a Missing Link in GCC Countries. Santa Monica, CA: RAND Corporation, 2013. https://www.rand.org/pubs/research_reports/RR188.html.
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