Enemy inside the Gate: The Number One Barrier to Innovation in the Middle East

What are the drivers for innovation in the Middle East? I recently asked this question of my colleagues in the social mediasphere. I wanted to better understand how people innovate in the Middle East, and compare the drivers for innovation here with that of other societies.

My question provoked many responses, several of which pointed to one underlying driver – necessity. As they say, necessity is the mother of invention. However, necessity is the most basic driver for innovation. Many other societies have moved beyond necessity.

In China, for example, innovation is technologically and industrially driven, and their R&D spending matches that of the U.S. and Europe.

The Japanese believe that if they lose money, they will recover it, but if they lose time, they won’t. So a driver of innovation there is the need to produce new offerings quickly, and to be the first to market.

In the U.S., there are multiple factors that support innovation – a higher education system that encourages thought leadership and innovation, and a strong entreprenurial spirit and privately funded venture capital system. These factors combined lead to increased competition, which further drives innovation.

In the Middle East, we have necessity. The need to develop viable means of income in addition to oil. The need to improve quality of life for those in poor Middle East countries. The need to solve the water shortage crisis, unemployment among youths, technological backwardness, and more.

We also have government-led initiatives designed to foster innovation and support entrepreneurship. The Mohammed bin Rashid Al Maktoum Centre for Entrepreneurship and Innovation is a good example, as is the Qatar Foundation, and the King Abdullah University of Science and Technology in Saudi Arabia. All represent significant government investments to drive innovation. Certainly the resources and the will to innovate are there. Where we are in danger of falling short is the execution and sustainability of these plans.

Apathy – The Enemy of Innovation

It is interesting that in response to my question, what drives innovation in the Middle East, many responses listed the barriers to innovation here – the “buy versus make” culture; lack of support for entrepreneurship, especially among youths; too much talk and not enough action.

I believe that all of these problems are rooted in apathy. During the past year, I have visited many companies throughout the Gulf region. Although everyone expresses an interest in innovation, few put any resources into it. One organization, a multi-billion dollar telecom company, had one person in charge of R&D who was let go two years ago. Another, a $50 billion company with diversified holdings, has an R&D budget of $0.

These are not isolated examples. A 2008 report from the Economist Intelligence Unit put the region’s R&D expenditure at less than 1 percent of profits. Compare that to Japan, which allocates more than 20 percent to R&D.

In addition, some companies confuse innovation with suggestion boxes or brainstorming sessions. More often than not, these poorly planned programs merely generate “opinions” from unhappy employees, or incremental improvements to existing products, services and business models. These approaches are not a substitute for true innovation.

How do these companies survive? Because we have made it acceptible to rely on the innovation of others, which we reuse and resell. Where some societies and organizations struggle with the “it’s not made here” mentality, we have the opposite problem. If it’s not made, tested, proven and sold elsewhere, we tend to distrust it. We have created a culture of apathy that can afford to buy innovation elsewhere.

As a result, local ingenuity is often overlooked or discouraged in favor of imported innovation, and we become a hub that innovation passes through. We verbally commit to entrepreneurship, but the costly and difficult system of establishing a business here belies that commitment. In addition, there is too little privately funded venture capital to support entrepreneurs or new innovative models.

This culture of apathy threatens to negatively affect the execution and sustainability of current innovation initiatives. It is not enough to set aside financial resources for innovation and entrepreneurship. Without a systematic approach to innovation execution, any progress made will be minimal and difficult to sustain.

What would such an approach look like? Here are some high-level steps:

  • Understand that innovation is a process and a system that needs to be well managed.
  • Revamp business infrastructure so that it not only supports entrepreneurs, but allows them to fail and learn from their mistakes.
  • Increase micro-financing and venture capital funding, and remove the red tape that discourages private funding.
  • Increase the competitive landscape by easing government control on growing industries that require significant new technologies and innovation.
  • Increase R&D budgets across the board, and educate organizations on how to maximize R&D spending (through systematic innovation).
  • Embed innovation training in all levels of the education system, and for all employees.
  • Focus on necessities instead of luxuries (water resources versus high-rises, enabling technologies versus shopping malls, production versus consumption).

On a personal scale, we need to work to overcome apathy and encourage creativity. This means we stop accepting the status quo and resolve to change it. We challenge old assumptions. We think outside the box. We share knowledge. We start trusting each other, and our abilities.

For those of you who are ready for this challenge, contact us. Let Innovation 360 show you how to develop, execute and sustain innovation. We have the knowledge, experience and approach to guarantee your success.

Both comments and pings are currently closed.

Comments are closed.