Abu Dhabi, June 17, 2017
The UAE has improved its standing in the 2017 Global Innovation Index, topping all Arab countries and ranking 35th globally to improve six places from last year’s 41st position to cement its status as one of the world’s most innovative countries.
The results of the index were officially announced during a press conference held on Thursday, June 15, 2017 at the European headquarters of the United Nations (UN) in Geneva, Switzerland which was attended by H.E. Ambassador Obaid Salem Al Zaabi, the UAE’s permanent representative to the UN and other international organizations in Geneva. It affirmed the UAE’s significant progress in several pillars, the most prominent of which are Human Capital & Research as well as Creative Outputs
This year’s 10th Global Innovation Index measured the innovation-related performance of 127 countries and economies representing 92.5 percent of the total world population and the vast proportion of global GDP. It relied on detailed measures of innovation inputs and outputs – including 81 indicators providing comprehensive insights on the various areas of innovation, most notably institutions, human capital & research, infrastructure, market sophistication, business sophistication, knowledge & technology outputs, and creative outputs. The index provides a reliable measure for assessing and improving innovation and helping promote its role as a catalyst for growth and prosperity.
The Global Innovation Index is one of several key indices under the UAE National Agenda’s ‘Competitive Knowledge-based Economy’ pillar. It is overseen by the Ministry of Economy in cooperation with several entities, the most prominent of which are the Ministry of Education, the Federal Competitiveness and Statistics Authority, the Central Bank, the Ministry of Human Resources and Emiratisation, the Ministry of Finance, the Securities and Commodities Authority, and the Telecommunications Regulatory Authority (TRA), among others.
A new achievement that enhances the UAE’s development record
H.E. Engr. Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said that the UAE’s significant progress in the Global Innovation Index is the latest of the country’s successive achievements in various fields of development and global performance indices, which he said contributes in enhancing the UAE’s outstanding position as a regional and global economic destination. He noted how the UAE has managed to maintain its lead among Middle Eastern and African countries in the field of innovation and has made significant progress in advancing its ranking among the fastest-growing innovation-driven countries.
H.E. explained that the UAE’s success is largely due to the directives of the wise leadership of H.H. Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, may God save and bless him, H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, May God protect him, and H.H. Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to include innovation as a key pillar in all development policies and strategic plans adopted in various sectors.
The Minister added that the favorable result reflects the effectiveness of efforts and initiatives undertaken by various relevant entities to enhance the UAE’s ability to attract and retain outstanding talents and key investments to achieve the ambitious goal of transforming the UAE into a global innovation hub.
The UAE’s six-place improvement is considered one of the highest percentage score growth rates among all of the remaining countries in the Global Innovation Index with a growth of 10 per cent.
Detailed reading of sub-indicators
The UAE achieved a 6 rank increase in 2017, up from 41 in 2016 to reach 35 globally. Over the past two years, the UAE has exhibited a consistent performance by repeatedly ranking as number 1 in the Arab world. This year, the UAE also experienced the highest surge among the top 40 most innovative countries with a 6-rank increase. This jump allowed the UAE to achieve+ the highest percentage increase in GII scores globally with a 10% increase in score.
The Global Innovation Index, being based on both innovation input and output sub-indexes, exhibits that 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 2014-2016, the UAE displayed consistent performance in innovation inputs, ranking 25th. This year the UAE improved even further achieving a rank of 23rd. This performance in the input is mainly due to better Human capital and research (from 41st to 22nd), Market Sophistication (from 42nd to 33rd). However, the surge in the UAE’s score and rank is also the result of an increase in output driven by significant increases in creative outputs (+23 ranks globally) and knowledge and technology outputs (+15 ranks globally).
More specifically below are the results for both the input and output sub-indexes:
The innovation input sub-index remains strong globally with an improvement from 25th to 23rd globally.
This sub-index is comprised of five core pillars: The Institutions, Human Capital & Research, Infrastructure, Market Sophistication and Business Sophistication pillars.
The Human Capital & Research pillar experienced a surge to 22nd globally across 2 of its 3 sub-pillars: Average PISA scores rose from 469 to 474 and the UAE improved by 19 ranks in the pupil-teacher ratio leading the country to get back on track in the Education sub-pillar. In the tertiary education sub-pillar, the UAE’s leadership position in tertiary inbound mobility was reinforced following an increase from 45% to 47%. Furthermore, Gross expenditure on R&D as a percentage of GDP rose 24% from 0.7% to 0.9% and the UAE ranked 38th in full-time researchers employed.
The UAE also improved in the Market Sophistication pillar (33rd globally) due to the Credit and Investment sub-pillars. This improvement was largely driven by an improvement in the UAE’s rank in Venture Capital deals where it experienced an increase of 6 ranks. Furthermore, the domestic credit to private sector as a percentage of GDP moved from 65% to 77%, following last year’s positive trend. In the Investment sub-pillar, the ease of protecting minority investors also increased 25% from 60 to 75 while market capitalization improved from 51% to 53% of total GDP.
Business sophistication (25th globally) remained high in the 2017 edition of the Global Innovation Index due to the Knowledge Absorption sub-pillar in which the UAE advanced by 43 ranks. The UAE moved up from the 89th rank to the 66th rank in high-tech imports as a percentage of total trade as the latter improved from 6% to 8%. Furthermore, foreign direct investment inflow constituted 2.7 % of total GDP vs. 2.5% last year. In addition, research talent in business enterprise was ranked 10th globally with a score of 61%. Overall, the UAE continues to be strong in cluster development (2nd globally) and GERD financed by business (4th globally).
In the Infrastructure pillar (Ranked 29th globally), more specifically in the General Infrastructure sub-pillar, lie two of the UAE’s major strengths: the Logistics Performance Index and electricity output. The UAE moved up 13 ranks in the Logistics Performance Index which increased from 3.5 to 3.9, while the electricity output increased from 11306 to 12098 kWh per capita. Further improvements were also highlighted in the Information and Communication Technologies sub-pillar as the ICT access Index moved from 7.8 to 8.1 and the Online Service Index increased from 0.88 to 0.9. An increase of 6 ranks in the number of environmental ISO 14001 certificates also drove a 6 rank improvement in the Ecological Sustainability sub-pillar.
Finally, in the Institutions pillar (Ranked 25th globally), the UAE maintained its global leadership position in two indicators: the ease of paying taxes and the cost of redundancy dismissal. In addition, the country experienced a 5-rank increase in both the regulatory quality (28th worldwide) and the ease of starting a business (45th worldwide).
The output sub-index experienced an increase of 19 ranks globally among the highest in the world. The Innovation Output sub-index is comprised of 2 core pillars: The Knowledge & Technology and Creative Outputs pillars. Major improvements were achieved in both areas.
In the Knowledge & Technology Outputs pillar the UAE experienced a major rank increase (+15 ranks). In the Knowledge Diffusion sub-pillar the UAE moved up from 53rd to 45th, thanks to a 28-rank increase in foreign direct investment net outflows and a 16-rank increase in the net high-tech exports as a percentage of total trade. In the Knowledge Output sub-pillar, the UAE moved up 20 ranks due to a similar rank increase in Computer software spending as a percentage of GDP. Further noticeable improvements can be found in the citable documents H-index (5 ranks) and in the growth rate of GDP (PPP) per worker (4 ranks).
In the Creative Outputs pillar, the score increased by 31% for the UAE (+23 rank), which represents the highest score increase among all Innovation pillars. The increase is caused by a surge in the Creative Goods & Services sub-pillar, where the UAE moved from 109th globally to 34th worldwide, a 75-rank increase. This surge was driven by an 88-rank increase in the creative goods exports as a percentage of total trade indicator. The increase was also driven by newly available data in the UAE on printing & publishing output as a percentage of total manufacturing output where it is ranked at 14th place.
Two other national strengths behind the rank increase relate to Information & Communication Technologies. First the Intangible Assets sub-pillar: the extent to which ICTs enables business model creation (10th globally) and the extent to which ICTs enable organizational model creation (13th globally). Second, the score of the Online creativity sub-pillar improved from 14.8 to 25.1 following a 15-rank increase in the number of video uploads on YouTube variable (47th to 32nd globally).
Overall the UAE continues to convert input into output and is expected to continue on this trend in the coming years. Going forward the country needs to focus even further on areas ranging from R&D and scientific articles to high-tech exports and ICT services.
Successful policies and fruitful cooperation
Commenting on the commendable results achieved by the UAE, H.E. Engr. Mansoori said that the outstanding performance reflected by the indicators of the Global Innovation Index affirms the success of policies and the efficiency of procedures adopted by the UAE to upgrade its innovation system. This, he noted, realizes UAE Vision 2021’s goal of building a competitive, diversified and knowledge-based economy supported by innovation and led by competent nationals.
H.E. Al Mansoori added that the UAE Government has made continuous and intensive efforts to spread the culture of innovation and consolidate its practices, as it will be the pillar of the national economy in the coming decades. This, he explained, will form the basis of strategic economic partnerships in the UAE today. He emphasized the UAE’s keenness to cooperate with various countries in the region and in the world to promote and establish innovative practices further in developmental endeavors, particularly by sharing knowledge and best practices with government institutions and the private sector to achieve the desired progress in innovation regionally.
The Minister added that the UAE Government has exerted continuous and intensive efforts in the past few years to spread a culture of innovation and adopt its practices. He pointed out that the National Innovation Strategy has been developed in an integrated manner through the creation of programs, initiatives and frameworks aimed at cultivating an environment conducive to innovation and instilling innovative practices in government work. He added that the strategy encourages the private sector to adopt the concepts of innovation as well as work on building national competencies with unique creative skills. He noted the importance of efforts and achievements that have contributed to stimulating innovation in the seven key sectors prioritized by the strategy, namely renewable energy, transport, health, education, technology, water, and space.
H.E. also emphasized that the close cooperation among the various government agencies and academic and private institutions has had the largest impact on the significant progress made by the UAE in the field of innovation. He pointed out that the level of cooperation advanced further and became more effective thanks to the UAE Government’s innovative move to enhance coordination to achieve higher levels of performance.
Initiatives to foster an environment of innovation and sustainability
The UAE has launched various initiatives and taken several actions to strengthen the regulatory and legislative environment in support of innovation and move forward in providing the necessary elements to sustain growth, most notably:
• The Bylaw on Venture Capital issued earlier this year within the framework of the Government Accelerators program, which provides the legislative and regulatory basis for the establishment and operation of venture capital companies in the UAE. It contributes to the upgrading of the capital markets in the country and the development of a business environment supportive of innovators, and encourages investment in innovative entrepreneurial projects.
• Strengthening the national patent system through the inauguration of the International Centre for Patents Registration (ICPR) at the Ministry of Economy in November 2016, which has boosted the competitiveness of the country in terms of intellectual property standards and the empowerment of innovation as well as the promotion of creators. Another initiative was launched within the framework of the government accelerators to provide support and funding for increasing patent registration rates and to encourage inventors, particularly in the ICT sector.
• Following up on the implementation of the ‘Young Innovative and Industrial Companies’ initiative designed to advance the trend towards a knowledge-based economy and support innovative manufacturing across the state through the development of incubator pilot projects and support for emerging small- and medium-sized enterprises, primarily through facilitating financing and government procurement and supporting exports as well as business development.
• Facilitating enhanced coordination and collection of data for indexing innovation at the national level and providing international institutions and organizations concerned with the level according to the highest international standards, particularly with regards to sectors such as education, trade in services, manufacturing, and foreign direct investment.
• Developing the manufacturing sector through innovation, knowledge and technology by working on the completion of 12 initiatives and 39 projects that enhance competitiveness and capitalize on growth potentials related to areas such as the integration of Fourth Industrial Revolution concepts into the national industrial sector and the establishment of ‘green’ industry standards that support sustainable development efforts.
• Strengthening research and development partnerships with the private sector through a series of measures that includes updates on the legislative and regulatory framework supporting innovation in the country.
Innovative education for community leadership
For his part, H.E. Hussein bin Ibrahim Al Hammadi, Minister of Education, said that the progress on the global innovation index mirrors the UAE’s dependable approach to deepening the role of innovation in development, which is a major focus of the Ministry of Education. He said that the objective is to achieve more efficient educational performance through a vision based on innovative education for a globally leading knowledge society.
Al Hammadi further pointed out that the UAE has adopted the best developmental policies in support of innovation in various sectors, the most important of which is education which he noted has moved to a more mature, progressive and complementary stage through the provision of key incentives and support.
He added that the government is directing substantial efforts towards providing high-quality and competitive education related to the innovative best-practices in education. Innovation, he stated, is a cornerstone for the development of educational policies and the promotion of teaching and learning processes among students at various stages. He further emphasized that his Ministry will spare no effort to continue its ambitious educational plan to support the transformation towards a knowledge society and economy by preparing capable generations and attaining educational outputs that contribute to making the country a pioneer in scientific research and a conducive place for innovation and innovators.
An enabling and supportive environment for quality investment
H.E. Mubarak Al Mansoori, Governor of the Central Bank of the UAE, said that the continuous progress achieved by the UAE on this important global index reflects the excellent performance in many sectors related to innovation in the country and its increasing ability to attract quality investments which enhance its competitive position in innovation.
Collective work to achieve advanced positions
H.E. Reem bint Ibrahim Al Hashemi, Minister of State for International Cooperation Affairs and Chairperson of the Federal Competitiveness and Statistics Authority, said: “Thanks to the wisdom and guidance of our leaders, the Authority’s team in cooperation with the concerned government entities has succeeded in working strategically to improve the UAE’s performance in this year’s global innovation index, and in consolidating the UAE’s strengths as a key player in the global innovation system. The fostering of a culture of innovation is the result of the successful exchange of knowledge and experience and the implementation of the best international practices. H.E. Abdullah Lootah, Director General of the Federal Competitiveness and Statistics Authority, has affirmed that the Authority has provided significant data on trade in services and the flow of investments as well as other important elements to support the UAE’s exceptional performance on the global innovation index while taking into consideration accuracy and modernity according to international standards. This has reinforced the state’s data related to payment balances, performance, and innovation indices”
Strengthening the labor market and empowering national competencies
H.E. Dr. Saqr Ghabash, Minister of Human Resources and Emiratization, underscored the importance of the UAE’s achievement in the Global Innovation Index. He pointed out that his Ministry strives to fulfill the objectives of the National Agenda through the proper implementation of its strategic plan for 2017 to 2021 aimed at enhancing the efficiency and productivity of the labor market; empowering citizens; and attracting creative talents and exceptional human resources. He explained that these complement efforts to transform the UAE into a knowledge economy and strengthen the country’s position in various global competitiveness indicators, especially the innovation index.
Ambitious Index contributes to the development of major sectors
From his side, H.E. Abdulla Sultan Alfan Alshamsi, Assistant Undersecretary for Industrial Affairs at the Ministry of Economy and head of the executive team of the Global Innovation Index under the umbrella of the National Agenda, affirmed that the Global Innovation Index is one of the most ambitious indicators on the National Agenda for 2021. He stated that any progress in this indicator is an important achievement because of the bigger challenge of keeping pace with high competition from developed and more matured countries in this field, as well as the complex structure of the index and its many requirements that need further work and development to cover a wide range of sectors at the policy-making level, launching initiatives, and implementing effective programs and plans.
H.E. further pointed out that the specialized teams from various governmental, private and academic sectors have worked exceptionally during the past period to meet the maximum requirements of the index, and that their dedication made the excellent result – which further strengthens the UAE’s position among other innovative countries – possible. This, he said, will further drive efforts to make significant developments in various sectors related to innovation in the country, including the industrial and manufacturing sectors which are key to promoting innovation. H.E. extended his thanks to the members of the executive team of the Global Innovation Index for their efforts which have helped achieve positive results on the index.
Initiatives to enhanced innovation financing
H.E. Dr. Obaid Al Zaabi, Acting CEO of the Securities and Commodities Authority, said that the result achieved by the UAE on the Global Innovation Index is well-deserved and reflects the outstanding performance of the UAE in promoting and adopting advanced innovative concepts and practices in various sectors. He pointed out that the Authority is keen to further enhance the elements of innovation within the UAE’s capital markets, and emphasized the importance of improving initiatives for financing innovation in the country, including laws, regulations and actions involving venture capital geared towards supporting innovation and pioneering projects in the UAE.
Providing resources for innovation and creating an enabling environment
H.E. Hamad Obaid Al Mansoori, Director General of the TRA, on the other hand, said that the Authority is working on providing resources and creating an optimal environment for supporting innovation in the country through the development of the ICT sector and upgrading electronic and smart infrastructure in various fields. He explained that these are necessary to keep abreast of technological developments and maintain the country’s global leadership and competitiveness, as they form important pillars for building a knowledge-based and innovation-driven economy.
An additional step towards enhancing competitiveness
On another note, Ambassador Obaid Salem Al Zaabi, Permanent Representative of the UAE to the United Nations and other international organizations in Geneva, said during his presence at the index-launching press conference, that the UAE’s remarkable standing in the latest Global Innovation Index represents an additional step towards strengthening the country’s regional and global position in innovation and various other competitive and developmental fields.
Measuring innovation efforts and supporting related initiatives
For her part, Fatima Al Naqbi, Chief Innovation Officer at the Ministry of Finance, said that innovation is considered a key pillar for sustainable development in the UAE. Al Naqbi added that the Ministry of Finance has extensively cooperated with all federal agencies to provide supporting data for measuring innovation efforts and assisting in the launching and implementation of innovation-enabling initiatives in the country.
The Global Innovation Index is published jointly by INSEAD, Johnson College, Cornell University, New York, and the United Nations World Intellectual Property Organization.
For his part, Bruno Lanvin, co-author GII INSEAD, said: “Being the regional leader in GII rankings, the Emirates are showing the way for many other countries. A well-articulated vision, well-orchestrated policies and significant investments in key areas largely explain UAE’s ranking. The country’s external openness and the ability of its leadership to think and communicate about the future indicate that further progress can be contemplated.”
For his part Sumitra Dutta, co-author of the GII at Cornell, said: “The UAE is implementing a national strategy that promotes innovation across government entities. The GII results reflect the success of related actions.”
This year’s edition of the index focuses on innovation in agriculture and food as key sectors likely to face high demand due to increased competition, population growth, limited resources, and the negative effects of climate change. Innovation is the cornerstone of solutions for sustaining productivity growth to meet demand, and promoting food systems that incorporate sustainable approaches to food production, processing, distribution and consumption, as well as waste management.