Knowledge is power
The global train of change is headed in the direction of new thinking. Unless economies jump on board, they'll be left behind, writes M Shafik Gabr*
"Addressing the knowledge challenge matters critically, both because knowledgeable people and a knowledge society are worthy objectives in themselves and because education and knowledge, as aspects of human capability and as proxies for increased human choice, are intrinsically linked to growth and equity." -- UNDP Arab Human Development Report
In today's global economy we cannot compete in the old ways. Capital is mobile, technology migrates quickly, and goods can be made in low cost countries and shipped to developed markets. Arab business must compete by exploiting new capabilities derived from knowledge, skills and creativity. We will only compete successfully in the future if we create Arab economies that are genuinely "knowledge- driven".
Arab governments have begun to realise that it is important to modernise their social fabric and to cater to their young populations. Knowledge is our engine for development and our catalyst for social transformation and progress. Besides its role in the new creative industries, and the further reaches of high-tech business, it plays a key role in developing traditional manufacturing and service industries.
The knowledge-driven economy is not simply about strengthening the science base and raising the education and skills levels of a specialised workforce. What is crucially important in the knowledge-driven economy is a shift in the business mindset: greater receptiveness to know-how and the ability to see its commercial potential, eagerness to keep on learning at all levels, and flair in spotting new customer needs and fresh business opportunities. In short, we will only succeed in building the knowledge-driven economy on the back of more dynamic innovations and more vigorous entrepreneurship.
These qualities will also be necessary if companies are to respond to our societies' rising expectations for employment, and to seize the opportunities this creates for new innovative types of goods and services that are more profitable and ensure a better quality of life. This message lies at the heart of the new strategy for the knowledge society launched in the second Arab Human Development Report of the UNDP, and is a principal objective of the Arab Business Council.
Arab countries should face the future with hope. We have the opportunity to leapfrog over earlier stages of research and technological development without having to reinvent the wheel. Doing so would help to redress the problem of poor returns on past investments in human resources, R&D and gross fixed-capital formation -- which is a function of poorly developed connectivity and currently weak science and technology systems.
It is true that Arab countries suffer long-standing shortcomings, which still hold us back. Too many Arab companies fail to match the performance of their foreign counterparts, not just in terms of productivity but also in innovation and quality. We have invested too little in matching our educational systems to the needs of the global economy and the labour market. We lack modern management systems and adequate human resource development to match new and better practices.
To compete effectively in the knowledge-driven economy we need to overcome these shortcomings. The challenges that we must set out for ourselves is to close the performance gap and enhance prosperity by changing our traditional approach to policy making.
Success in the knowledge-driven economy of the future is ultimately down to the successful partnership between business and governments. The aim of the Arab Business Council is to help as a catalyst in making this business-government partnership work in the interest of the region's growth and development. The government's first job must be to ensure a stable macro-economic environment so business has the confidence to invest for the long term and to generate resources for public investment. Economic instability over the past 20 years has damaged long-term investment, growth and employment, by pushing up interest rates and making returns from investment uncertain. We welcome the recent efforts made to correct this misdirection and encourage governments to pursue them.
Open competitive markets are the sharpest spur to innovation and the best way to reward risk taking. That is why Arab governments and business must jointly work on opening markets, fighting corruption, supporting competitive behaviour and modernising Arab markets so that the region can benefit from electronic commerce and services. The Arab Business Council is ready to work with both Arab governments and business in enhancing regulations that support an innovative, competitive and entrepreneurial regional economy.
Alongside creating a competitive environment, the Arab Business Council also has a role in encouraging business to collaborate more effectively. Success in the knowledge-driven economy increasingly requires teamwork within businesses, where new ideas flow upwards and sideways, and where goals are shared rather than imposed. The need for teamwork within businesses is matched by an increasing need for outside partnerships -- regionally, locally and sectorally -- to learn from others by benchmarking. The Arab Business Council would like to act as a catalyst to encourage Arab governments in encouraging people to collaborate to compete.
In each of these areas we would like the Arab World Competitiveness Report to benchmark Arab world performance in terms of progress towards a knowledge society; to set clear goals to what the Arab world must achieve if it is to close the performance gap; and to develop specific proposals.
Our goals have been developed in partnership with the members of the Arab Business community. Some 200 business leaders participated in the Arab World competitiveness meeting organised by the World Economic Forum. A greater number contributed their opinions on competitiveness and productivity through the surveys of the Arab World Competitiveness Report. They have helped shape our position. We will work together to monitor and review progress achieved in addressing the knowledge challenge. This effort lies at the root of ensuring better growth and equity for our future generations, and in initiating an Arab Renaissance that is worthy of this region.
Al-Ahram Weekly Online : 20 - 26 November 2003 (Issue No. 665)
Located at: http://weekly.ahram.org.eg/2003/665/op22.htm