Emirates' score on innovation depends on vantage point

Executives in the UAE believe that the country ranks higher than China, Japan and South Korea in terms of innovation, but to outsiders the country is behind Ireland, Brazil and Poland.

According to a wide-reaching survey commissioned by General Electric, the UAE-based business leaders believe the country should score about 6.7 out of 10 for business innovation. That was higher than they ranked executives in Japan (6.1), South Korea (6.5) and China (6.4).

But when asked how innovative they thought the UAE was on a world stage, executives surveyed elsewhere ranked the country much lower at 5.6 out of 10 - lower than Russia (5.7), Poland (5.8) and Ireland (5.9).

The survey, conducted during the fourth quarter of last year, asked 3,000 public- and private-sector executives - 200 of whom were based in the UAE - their views on 25 global business centres.

Overall, overseas executives perceived the UAE as a challenging environment for innovation, with only 27 per cent of those questioned reporting that they saw the country as "strongly conducive" to innovation - putting it in 20th place out of the 25.

However, the proportion of UAE business executives reporting the same thing about the country in which they worked jumped to 58 per cent.

The United States scored highest on both rankings, with 8.4 out of 10 from its own business executives and 8.3 out of 10 globally. It was followed by Germany, which was ranked 8.1 out of 10 by its own executives and 8.2 out of 10 globally.

"People think of innovation as inventing new products, and, yes, the UAE has not invented the iPad or the iPod," said Nabil Habayeb, GE's president and chief executive for the Middle East, North Africa and Turkey.

"But this is not a survey counting the number of patents registered in the country. It's about the whole business environment and how it is perceived.

"This is a very young country with a small population and it's a hydrocarbon-based economy that has been benefiting from the wealth of the hydrocarbon economy, so it was self-sustained and there was no need for innovation. But 10 years ago the country realised this so they have transformed to something else. If you ask people about the business model the UAE has adopted versus the invention of the iPad, I think they would change their rankings," he added.

"It's not just about invention but about changing the business model. Take a look at Emirates Airline and what it has created for Dubai as an airport."

Sixty-two per cent of the local respondents said that it was important for their firms to develop products and services customised to local circumstances and conditions - nine points above the global average.

GE, whose Middle East operation is involved in oil and gas, aircraft manufacture and leasing, power and water and health care, invests in innovation centres around the world aimed at creating new products and services.

Four years ago, GE established a joint venture with Mubadala, the strategic investment company owned by the Abu Dhabi Government, to create a regional training centre for the next generation of business leaders. The division has grown its turnover in the Middle East five fold over the last decade to US$9.2 billion (Dh33.7bn).

"Oil and gas creates the wealth, which used to be invested in creating a good infrastructure such as clean water, power, transport, education, health care. Now after the Arab Spring all of these are just as important because people are demanding that they need all of these things," Mr Habayeb said." The elements have not changed. The drivers are just the same but the needs are more important now and getting even more important and that is one of the reasons we need innovation."

lbarnard@thenational.ae