UAE boosts its innovation standing by 2 ranks to remain 1st among Arab countries in the 2020 Global Innovation Index

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ABU DHABI: The UAE maintains its global high-standing in this year’s edition of the Global Innovation Index, GII, as it ranked number one in the Arab World for the fifth consecutive year and improved to 34th globally in the 2020 edition of the report.

The country ranked 22nd on the innovation input sub-index, a 2-rank increase from 2019, and surpassing countries such as Iceland, Luxembourg, China, Spain and Russia. The UAE also improved on the innovation output sub-index, ranking 55th, a 3-rank increase from its rank in 2019.

The positive positioning across these indices reflects the significant improvements and high performances in pillars such as Human Capital & Research, Infrastructure, Business Sophistication, and Creative Outputs. For example, these pillars include gains in indicators such as R&D expenditures, ICT access and use indices, knowledge-intensive employment, patent families, high-tech imports, the percentage of research talent in business enterprises, and creative goods exports. Additionally, the UAE has achieved a positive position on the new “Global Brand value” indicator, under the creative outputs pillar, where it ranked 16th globally.

The Global Innovation Index report annually ranks countries based on their capacity to innovate. This year’s version of the report measured the performance of 131 countries and economies representing 99 percent of global GDP, with a focus on understanding “who will finance innovation?” The theme is especially relevant this year as the global depression triggered by COVID-19 has curtailed financing option for entrepreneurs and innovators. And it is precise during such disruptive periods that society is most in need of social and technological innovations to help the economy recover and transition to a more resilient outcome.

The GII is calculated based on detailed measures of innovation inputs and outputs – consisting of 80 indicators that provide insights on the various areas of innovation. These cover seven pillars: (1) institutions, (2) human capital & research, (3) infrastructure, (4) market sophistication, (5) business sophistication, (6) knowledge & technology outputs, and (7) creative outputs. The GII is commonly used by corporate and government officials to compare countries by their level of innovation inputs and outputs.

The GII is also recognised as one of several key indices under the UAE National Agenda’s ‘Competitive Knowledge-based Economy’ pillar, which is overseen by the Ministry of Economy in partnership with several private and public entities including the Ministry of Education, the Federal Competitiveness and Statistics Authority, the Central Bank, the Ministry of Human Resources and Emiratization, the Ministry of Finance, the Securities and Commodities Authority, and the Telecommunications Regulatory Authority, among others.

Abdullah bin Touq Al Marri, Minister of Economy, said, “The UAE‘s continued improved performance in the Global Innovation Index is a result of a long-term vision adopted by the country over the past years, under the guidance of wise leadership, which resulted in concerted efforts at the federal and local level as well as close collaboration of the public, private, and academic sectors. to consolidate the culture of creativity and innovation in the UAE. This will form a basis and engine for building a society that believes in a culture of innovation and entrepreneurship and for the development of a diversified, competitive and sustainable economy based on knowledge and innovation.”

He pointed out, “This result today gives us more confidence to enhance our innovative performance in order to achieve the UAE vision 2021 and to the future development goals outlined by the UAE Centennial 2071, making sure that the UAE becomes a regional and international innovation hub.”

He further added, “Today we have an advanced innovation-incubating environment, achieved by pioneering legislation and institutional development. Our efforts to promote innovation further will continue in the long-term and today, in light of the changes posed by and the impact of the COVID-19 pandemic, the importance of these efforts has increased. Innovation will play a fundamental role in accelerating the wheel of growth and overcoming various economic challenges.” ”The Ministry of Economy is working today, in cooperation with its partners, to implement a flexible package and a general plan of 33 initiatives to support various economic sectors. This is an integrated plan whose objectives are not limited to supporting economic activities and businesses, but through which we will work to build a more flexible and innovative economic model and to launch a long-term development path for the UAE economy.”

He emphasised that the objectives of this flexible package are aligned with the Global Innovation Index 2020 theme – “Who will finance innovation?” – especially via the initiatives designed to enhance the flexibility of national financing mechanisms for SMEs, those that support digital transformation, as well as the initiatives aiming to foster companies operating in advanced technological sectors.

Dr. Ahmed Belhoul Al Falasi, Minister of State for Entrepreneurship and Small and Medium Enterprises and the Minister in charge of Tourism, said, “The UAE’s GII 2020 positive performance reflects the government’s efforts to enhance the innovation ecosystem, improve intellectual property management, and increase investment in innovative projects, among other initiatives carried out in the last year. However, in the coming phase, the Ministry of Economy and its partners will work on launching a new phase of initiatives to increase SME capabilities, enable national entrepreneurship, and encourage start-ups and businesses operating in innovation and technology-related sectors.” ”Our plans also include stimulating the application of innovation in vital sectors such as tourism in efforts to increase the sectors’ competitiveness, develop its services, and enhance its contribution to the UAE’s gross domestic product. All these efforts will provide a strong foundation for the UAE’s future economy.”

Dr. Thani bin Ahmed Al-Zeyoudi, Minister of State for Foreign Trade and the Minister responsible for retaining and attracting talent, said, “Foreign trade and investment are pivotal factors in fostering global innovation as the trade of creative goods and high-tech products, investment growth in value-added projects, and the cross-border implementation of research and development projects all contribute to the knowledge base of the economy, consistently generating new and innovative ideas. The Ministry of Economy, along with its partners, has long been working on improving all three of these elements within the UAE. ” ”Looking forward, we will continue building on these efforts during the next phase, especially within the framework of implementing the flexible 33-initiative package, which includes initiatives designed to accelerate the implementation of the positive list of the foreign direct investment law in order to increase quality investment attraction, to encourage investment in the digital and fourth industrial revolution sectors, and to facilitate and increase trade via innovative platforms.”

On another note, he added that efforts continue in developing, retaining and attracting talented and creative human capital in various scientific, literary and humanitarian fields as they represent the wealth needed to advance towards an innovative future. He further indicated the importance of the UAE’s “Golden Residency” system in achieving this essential goal.

Hussain bin Ibrahim Al Hammadi, Minister of Education, stated, “The Ministry of Education has implemented many initiatives and reforms to improve the education and research climate in the UAE over the years. This has led to significant improvements in critical education indicators such as school life expectancy, graduates in science and engineering, R&D expenditures, and the prevalence of research talent in business enterprises, all of which have increased significantly in a short span.”

He clarified that now more than ever in light of the current pandemic the Ministry of Education is working on fostering innovation among UAE’s youth — preparing them for a vastly different post-COVID future — by leveraging new technologies and cooperating with international universities and research institutions to enable Emirati entrepreneurship and future skills development.

He further added that “human capital development will help the UAE in becoming an education and knowledge hub, making it more resilient to future shocks and helping to drive the future growth of the UAE.”

Nasser bin Thani Al Hamli, Minister of Human Resources and Emiratization, stressed, “Strengthening labour market resilience is among the priorities of the Ministry based on its commitment to contribute to the efforts made to enhance the competitiveness of the state. By implementing policies and initiatives, in cooperation with its partners in the federal and local government sectors as well as the private sector, aimed at training and employing national cadres and reducing the cost of transferring competencies and global expertise between institutions and companies, the Ministry thus aims at optimising the investment of manpower in the labour market in a way that both meets market needs and contributes to achieving national goals.”

He added, “The Ministry is focusing its efforts, in cooperation with its partners, to deal with the challenges of the COVID-19 pandemic, seeking to meet job requirements for which demand has grown as a result of this pandemic, as well as future jobs, by developing national skills and preparing them to fill these vacancies and by preserving and attracting global talent, especially knowledge-worker competencies. This would raise the productivity of the labour market so that it would remain an active contributor to the country’s competitiveness in the various fields related to innovation.”

Obaid Humaid Al Tayer, Minister of State for Financial Affairs, elaborated, “The Ministry of Finance is keen to provide all possible support to achieve the vision of the UAE government in becoming among the most innovative governments in the world by 2021. In this context, the Ministry continues to work closely with various government and private stakeholders to launch initiatives, strategies and programmes aimed at advancing innovation and creativity across all fields.

To this extent, he said, the Ministry launched the Mohammed bin Rashid Innovation Fund which aims to provide the necessary financing solutions for innovators, entrepreneurs and companies, and to provide specialised services to develop and accelerate their work in a way that continuously contributes to achieving the UAE’s innovation goals and direction as well as its contribution to economic growth. The fund also contributed to providing the required support for innovators to face the repercussions of the COVID-19 pandemic and to continue achieving growth and financial stability.

Abdulla Nasser Lootah, Director-General of the Federal Competitiveness and Statistics Authority said, “The Federal Competitiveness Statistics Authority continues its efforts in enhancing the UAE’s data governance mechanisms and infrastructure, as well as collecting timely and accurate data, aiming to provide stakeholders with the most accurate indicators that reflect the UAE’s competitiveness, especially with respect to its innovation ecosystem.”

He added, “The GII is a critical report for the UAE as part of its National Agenda goal to become a global leader in innovation.” Hamad Obaid Al Mansoor, Director General of the Telecommunications Regulatory Authority, said, “The importance of the ICT (information and communications technology) sector has been significantly highlighted in the wake of the COVID-19 crisis, which has pushed for digital channels for life continuity. We, in the UAE, have succeeded, thanks to the insightful vision of our wise leadership, in achieving a smooth and rapid transition towards a digital model based on remote work, distance learning, and the provision of government and non-government services through non-traditional channels, leveraging the already existing advanced ICT infrastructure, and the cumulative development in digital transformation programs, as the UAE has entered the era of e-government early in 2001.”

Dr. Obaid Al Zaabi, Chief Executive Officer of the Securities and Commodities Authority, SCA, stated, “The SCA is committed to supporting the National Agenda Team members in their efforts to foster a culture of innovation in the UAE. Therefore, SCA is continually working on the development of investments and capital markets regulations to advance the nation’s finance and investment ecosystem, which plays a vital role in bringing innovations and ideas to the financial market. In particular, having an advanced venture capital ecosystem will increase the number of venture capital deals as well as develop a well-functioning equity market, which are both paramount in helping entrepreneurs and businesses to finance their growth plans and to sustain the production volume of products and services. ” This year’s GII results indicate a minimal change in the rankings of the top 5 leading innovators, with Switzerland, Sweden, and the USA maintaining the top 3 positions respectively, and the UK and Netherlands maintaining their “top 5” classification.

The Global Innovation Index is based on both innovation input and output sub-indices. Converting innovative inputs to higher innovative outputs is fundamental for improving the UAE’s performance. This is what the UAE has consistently achieved: Over the period 2015-2020, the UAE displayed a strong and steady performance in innovation inputs, ranking consistently in the top 25: 25th in the 2015-2016 years; 23rd in 2017 and 24th in the 2018-2019 years. This year, the UAE maintained this stronghold in inputs by ranking 22nd in 2020.

This position was achieved through better performance in the “Human Capital & Research” pillar with an increase from 18th to 17th, the “Infrastructure” pillar with an increase from 21st to 17th, the “Market Sophistication” pillar with an increase from the 34th to 30th, and the “Business Sophistication” pillar with an increase from 30th to the 22nd. On the output sub-index side, continuous increases were achieved in the “Creative Outputs” pillar. In fact, the UAE moved up 36 ranks, from 70th in 2016 to 34th in 2020, in this particular pillar.

Furthermore, the UAE has achieved global leadership by ranking among the top 10 countries in a number of indicators included in the Global Innovation Index 2020 report. It has ranked 1st globally on the indicators “cost of redundancy” and “tertiary education inbound mobility,” ranked 3rd globally on “research talent, % in business enterprises” indicator, ranked 5th globally on the “GERD financed by business” indicator, and ranked 8th globally on the indicators “State of cluster development” and “Creative goods export.”

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