The Middle East lags far behind the developed world in research and development (R&D). The number of patents filed, engineers produced and research projects carried out in the Gulf is well below what the region’s average GDP would seem to dictate.
Historically, GCC states have used past oil booms to draft in expertise and services from abroad; their small populations and overflowing treasuries meant that there was little reason to do otherwise. But today, the rapid growth of these populations is forcing governments to explore ways of developing self-sufficient economies.
Billions of dollars across the Gulf are being ploughed into education, training and R&D.Not all of this investment originates locally. Increasingly, major foreign companies such as ExxonMobil Corporation and DaimlerChrysler are putting their names to regional research centres, academic institutions, workshops, repair centres and manufacturing facilities.In the last week of November alone, South Korea’s Doosan and the US’ GE opened new R&D centres in Dubai.
Doosan’s $2 million facility its first outside Korea will comprise 30 scientists looking at water desalination technologies. GE’s multi-million-dollar centre in Jebel Ali will focus on new wastewater treatment technologies.There are practical advantages to home-grown research.
‘To develop desalination plants, R&D needs to be localised due to different characteristics of seawater quality,’ says Yoon Sik Park, Doosan desalination plant business group head. ‘This establishment of a desalination R&D centre in Dubai is an effort to reinforce local competency by developing the technology to meet clients’ needs.’
For many companies, setting up an overseas technology centre also has a strategic purpose: it underlines their long-term commitment to the market, providing job opportunities and downstream business; it reinforces their local presence and it can be a valuable asset when competing for business in a cut-throat market.
High oil prices and a buoyant projects market are helping to drive this surge in foreign investment. And regional governments are keen to smooth the way, eager to encourage local training schemes in the face of their growing employment needs.The drive spans all sectors. Vienna-based Borealis and Abu Dhabi Polymers Company (Borouge) plan to establish an innovation centre in Abu Dhabi. The centre, developed jointly by the companies, will focus on uses for plastics.
‘We have a very clear approach on how to create value through innovation, and how to create value for our customers,’ says Borealis chief executive officer (CEO) John Taylor. ‘This centre will not only support the needs of customers in our key areas, but also provide some academic and on-the-job training for any young engineers.’
The Borealis venture is a good example of regional companies in this case International Petroleum Investment Company (IPIC), the majority shareholder using their overseas partnerships to bring investment back into their home markets.
Kuwait Investment Authority last year assisted DaimlerChrysler, in which it is the largest shareholder, in opening up a training academy in Kuwait. Abu Dhabi’s Mubadala Development Company has a similar role in attracting investment.Education, particularly higher education, is also a target. Qatar Foundation for Education, Science & Community Development has succeeded in drawing many big names, such as the Royal Dutch/Shell Group, Microsoft and ExxonMobil, into Qatar Science & Technology Park.
In return for setting up their own R&D centres, the firms get access to the pool of young engineering graduates who go through the campus’ doors each year.There are some very tangible benefits to businesses. John Rose, CEO of the UK’s Rolls-Royce, is a vocal proponent of the provision of training and investment, and his company was a founder member of the British Un
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.