Women’s participation in the economy is key to the UAE’s development, according to Oscar Stenstrom, speaking exclusively to MEED on 4 June, during an official visit to the UAE.

“Everyone needs to be a part of the economy,” says Stenstrom. “It’s not that obvious in the UAE, but female participation in the economy is important. Everyone needs access to education, When it comes to talent, you have to invest in everyone, and you can’t leave any brains behind.”

The comments come following a diplomatic row between Sweden and Saudi Arabia and the UAE, in which the Gulf countries recalled their ambassadors in March 2015. The spat was in reaction to Swedish Foreign Minister Margot Wallstrom accusing Saudi Arabia of violating women’s rights in a speech to Sweden’s parliament.

The ambassadors were returned in April and diplomatic relations normalised.

Sweden hopes to sign a memorandum of understanding with the UAE government this year, covering economic diversification, innovation and small and medium enterprises (SMEs.) It will involve cooperation between governments, businesses and research institutions.

It will tie in with the UAE’s efforts to become a smart knowledge economy.

Sweden is a successful example of an innovative knowledge economy, boasting the highest number of start-ups per capita outside the US’ Silicon Valley.

The frameworks that encourage innovative start-ups in Sweden took over a century to develop. According to Stenstrom, the UAE may be able to fast-track its own knowledge economy.

“The nature of modern globalisation means that it is easier to catch up nowadays if you are determined,” he says. “You have to invest in education, from pre-school to university and foster a climate where you bring innovation to the market.”

The nature of today’s global production chains, into which the UAE is already integrated, means the country can begin with smaller parts and work up to more complex, higher value-added processes.

However, the longer-term challenge is to foster innovation and research in the UAE.

“In the Middle Eastern countries, stable democracy, transparency, a stable economy and corporate social responsibility policies [are all important to] create an environment where innovation can flourish,” says Stenstrom.

A good business climate for innovation requires cooperation between all the stakeholders: the state, the education system, and business; an area where the UAE is strong.

“When we look at Expo 2020 we see how they are putting together teams that really have all the different stakeholders,” adds Jan Thesleff, the Swedish Ambassador to the UAE. “The ingredients to cook a very nice soup are definitely there and they seem to be inclusive in their way of doing things.”

This cooperation can help focus research and funding in promising areas. Skills and education can also be aligned to business needs, to foster a pipeline of talent.

Sweden also believes state-funding and procurement policies can drive innovation if the right strategies are in place. This innovation should meet real needs.

“If you are always doing a lot of work with the oil and gas sectors you are less likely to succeed in others. But I would expect the UAE to be successful in the health sector, because of the high demand,” continues Stenstrom. “What we see in the world is that innovation is getting much more demand-focused. You find problems in society then you need to find solutions.”