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UAE leads Arab countries in 2016 Global Innovation Index

UAE ascends 6 places to 41 from 2015 globally

Sultan Al Mansouri: ‘The result of the innovation index is a new national achievement reflecting the UAE’s efforts to reinforce an environment of innovation and push forward the country’s comprehensive development’
Sultan Al Mansouri: ‘The UAE’s leading position at the Arab level and its higher global ranking are due to its programs for capacity building and the development of legislations supporting innovation and creativity’
Sultan Al Mansouri: ‘The Ministry of Economy has launched 12 initiatives and 39 projects to enable knowledge and support manufacturing and innovation’
Hussain Al Hamadi: ‘The Ministry of Education assures that it has been keen on including the Global Innovation Index and requirements for other global competitiveness indices within its development strategies and action plans’
Mubarak Al Mansouri: ‘The Central Bank of the UAE plays a crucial role in enhancing the innovation and knowledge environment through supporting investments and credit policies’
Innovation & Knowledge currently contributes 3 per cent to GDP, with plans to raise figure to 5 per cent by 2021

Abu Dhabi, August 15, 2016

The UAE showed a significant improvement in its innovation standing on the 2016 Global Innovation Index which was officially launched today (Monday, August 15, 2016) at a press conference held at the European headquarters of the United Nations in Geneva, Switzerland. The UAE ranked first among Arab countries and 41st worldwide in terms of overall performance on the index, up from second in the Arab World and 47th globally in 2015.
This year’s Global Innovation Index measured the performance of 128 countries and economies in the area of innovation which represents the majority of the global workforce and global GDP. The 2016 index is based on 82 sub-indices which measure innovation in detail and provide a clear understanding of how it drives economic growth and prosperity.

UAE leads Arab countries in 2016 Global Innovation Index

UAE leads Arab countries in 2016 Global Innovation Index

UAE leads Arab countries in 2016 Global Innovation Index

Image 1: H.E. Eng. Sultan bin Saeed Al Mansouri, Minister of Economy
Image 2: H.E. Mubarak Rashed Al Mansoori, UAE Central Bank Governor
Image 3: H.E. Hussein Bin Ibrahim Al Hamadi, Minister of Education

The index results attributed the outstanding progress made by the UAE this year to its sustainable achievements in innovation inputs, especially the strengthening of institutions and market sophistication. The UAE has one of the best political and legislative environments in the world along with outstanding development in information technology, communications, infrastructure and innovation linkages.

H.E. Eng. Sultan bin Saeed Al Mansouri, Minister of Economy, said that the remarkable progress made by the UAE on the 2016 Global Innovation Index in leading Arab countries and elevating its global ranking adds to its impressive track record of comprehensive development witnessed under the leadership of H.H. Sheikh Khalifa bin Zayed Al Nahyan, UAE President,  his brother, H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, and H.H. Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
The Minister added that innovation is a major pillar in advancing the state’s economic development and is at the heart of good government policies aimed at making the UAE among the top 10 countries in the world on the Global Innovation Index by the Golden Jubilee of the Union, in line with UAE Vision 2021.
H.E. Al Mansouri emphasized that the outcome of the latest Global Innovation Index, which has further strengthened the UAE’s regional leadership, is consistent with the innovation-related trends and efforts exerted by the State, particularly over the past few years. Innovation has become an integral part of the successful performance and competitiveness of the UAE, in terms of both public and private sector activities. He added that these efforts culminated in the launching of the National Strategy for Innovation in 2014 which was followed by the declaration of 2015 as ‘The Year of Innovation’ in the UAE under the directives of H.H. the President of the State.

The Global Innovation Index 2016 sub-indices showed that the country ranked first globally in the cost of redundancy dismissal, ease of paying taxes, tertiary inbound mobility and state of cluster development.

Progress in innovation inputs also included a significant improvement in market sophistication thanks to growth in investment and credit. Investments have gone up from a rank of 105 to 55 thanks to market capitalization that increased from a rank of 73 to 32 as well as total value of stock traded that has gone up from a rank of 51 to 20 and VC deals that went up from 48 to 34.

It should also be noted that patent families went up from rank 93 to rank 68, gross expenditure on R&D from rank 63 to rank 48 and knowledge workers have increased from a rank of 57 to 25 increasing the overall innovation input contribution of the UAE.

The value of stocks traded rose from 4.7 percent of GDP in 2015 to 35.9 percent in this year's index. Market capitalization also rose from 18.2 percent of GDP to 50.5 percent. The domestic credit to the private sector rose from 59.1 percent of GDP to 65.4 percent.

In the business sophistication indices, the R&D performed by business rose from 0.1 percent of GDP to 0.5 percent, while the R&D financed by business is ranked 4th in the world.

The report said that one of the main contributors to the overall progress made by the UAE on the Global Innovation Index this year is the robust improvement in the outputs sub-index across a number of important sectors.

Knowledge and technology outputs went up from 134 to 86. This dimension includes Knowledge diffusion that has increased from 137 to 53 rank thanks among others to significant changes in FDI net outflows.

Across the creativity outputs index, the country achieved a rise in the number of trademark registration applications at the national level from 9.3 to 11.3 per billion USD GDP.

In his comment on the detailed results, H.E. Eng. Al Mansouri indicated that in light of the general slowdown in the global economy, the trend of many countries to cut spending on research, development and the areas of innovation and with carefully considering the details of sub-indices of the report, which has an internationally great credibility, especially those that measure market sophistication and investment and credit conditions in the areas of innovation, the business sophistication, R&D activities and advanced manufacturing as well as technology, knowledge and innovation outputs, all of this, by all standards, puts the UAE in front of an extraordinary result that reflects major and continuing efforts exerted by the UAE to enhance its innovation environment.

H.E. Eng. Al Mansouri added: "The UAE focuses on building its capabilities and legislative environment to ensure the launch of a potential wealth of creative energies that fall in line with the national strategy for innovation, which emphasizes the important role of innovation, research and science in establishing a high-productivity knowledge-competitive economy, moving the country to a new phase spreading the culture of innovation among individuals, government institutions and private sector companies, and building human capital provided with the best international expertise in various development fields--particularly those identified to lead the journey of innovation, namely, clean renewable energy, transportation, technology, education, health, water and space."

He further revealed that the Ministry of Economy, the key sponsor of the index according to the decisions of the national agenda, recorded the percentage contribution of knowledge and innovation to the GDP at about 3 per cent. This figure ranks among the highest rates globally. H.E. Al Mansouri pointed out that the Ministry is working in collaboration with all its partners, most notably the Ministry of Education, the Central Bank of the UAE and the Federal Competitiveness and Statistics Authority, to raise the index percentage to 5 per cent by 2021. This is to achieve UAE Vision 2021’s objective of placing the country at the same level of member countries of the Organization of Economic Cooperation and Development and other developed and leading countries in the field of innovation--most of which have percentages ranging between two to eight per cent.

In line with this, H.E. shared that the Ministry has launched 12 initiatives and 39 projects designed to drive the trend towards a knowledge economy and to support manufacturing and innovation in the UAE. These cover a wide range of creative developmental activities, such as ‘Young Industrial & Innovative Companies,’ an initiative for specialized financing of microenterprises; venture capital initiatives; and next-generation projects in the field of manufacturing, R&D and logistics. The Ministry of Economy is continuously working to support and develop such initiatives and projects.

H.E. Eng. Al Mansouri said that "Innovation is a national approach that requires thinking ahead of the game." He added that "The UAE has all the opportunities and potentials to achieve leaps in the field of innovation by adopting and implementing new technologies and standards such as the Internet of Things, a long-term 3D Printing strategy, and an inclusive knowledge- and innovation-based manufacturing strategy."

H.E. Hussein Bin Ibrahim Al Hamadi, Minister of Education, assured that the Ministry has been keen on including the requirements of the Global Innovation Index and other global competitiveness indices within its development strategies and action plans. This is due to the great importance of these indices in representing the country's global competitiveness. He referred to the remarkable results achieved by the country in the indices related to education, especially those related to how foreign students enroll in the higher education sector. He pointed out that these results explain the reliability of the approach adopted by the Ministry in implementing the directives of the UAE’s wise leadership to build a society founded on knowledge and innovation.
H.E. Al Hammadi added that the Ministry is observing a trend towards the consolidation of the role of innovation in the educational process and reliance on global competitiveness standards to ensure the quality of the outputs of educational institutions. This, he explained, will enhance the attractiveness of the country’s education sector while at the same time improve the capability of the country in the areas of scientific research, development and innovation in order to enhance the UAE’s competitiveness.

Meanwhile, H.E. Mubarak Rashed Al Mansoori, UAE Central Bank Governor, said that the remarkable results achieved by the UAE in the Global Innovation Index for this year reflect the strong performance of the sectors associated with innovation in the country. He added that the significant improvements on the sub-indices of FDI and credit policies clearly illustrate the high capacity of the country in the consolidation of its innovation-based knowledge economy in line with the directives of the wise leadership and the implementation of the objectives of UAE Vision 2021, which positively reflects the increased attractiveness of foreign investments. He pointed out that the Central Bank plays a pivotal role in fostering an environment of innovation through its regulatory powers over the UAE’s monetary, credit and banking policies, achieving a stable currency and ensuring its free convertibility which contributes to the balanced growth of the national economy.

This year’s Global Innovation Index focuses mainly on progress in global innovation and the potentials for sharing them through the exchange of knowledge, experience and talent. The press conference included discussions on the possibility of transforming ‘win-win’ partnerships in the fields of science, innovation and entrepreneurship to create a new engine of growth. Other related activities also looked towards addressing the challenges faced by decision and policy makers in this regard.

The Global Innovation Index 2016 report highlights the exploration of the growing share of innovation achieved across global innovation networks. The report also examines the ways by which the innovation can help revive the global economy. Switzerland ranked first worldwide in this index this year, followed by Sweden and the UK. The following table shows the five top-ranking countries in the world.

First Five Countries in Innovation Index 2016

Global Rank Country Total Points
1 Switzerland 66.28
2 Sweden 63.57
3 UK 61.93
4 USA 61.40
5 Finland 59.90

Among the Arab countries, the Kingdom of Saudi Arabia (KSA) ranked second down 6 ranks. The following table shows the global ranking of the first 10 Arab countries on the index.

The Prominent Five Arab Countries on the Innovation Index 2016
Arab Rank The Country Global Rank
(and change
vs 2015 Index)
1 UAE 41 (+6)
2 KSA 49 (-6)
3 Qatar 50 (0)
4 Bahrain 57 (+2)
5 Kuwait 67 (+10)

The Global Innovation Index report is published by INSEAD, ‘the Business School for the World,’ in collaboration with the College of Johnson at Cornell University in New York and the World Intellectual Property Organization (WIPO) of the United Nations. Knowledge partners that have contributed to the report include Emirates Integrated Telecommunications Company (du), the Confederation of Indian Industry and ‘A.T. Kearney,’ which served as a Global Management Consulting Firm for the endeavor. The index was also facilitated by an advisory board composed of international experts.