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Strategic Objectives for Transforming Dubai into a Knowledge-based Economy

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Ibrahim Karsany

Former Director, Public Policy Division

Tag: Dubai economy United Arab Emirates
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1. Dubais Future Course of Development:

Dubais  strategy for transforming Dubai fully into a Knowledge-based economy shall be designed, regulated and executed within the context of the following seven pillars:
? Host a world class information and communication technology (ICT) base and a well-educated and highly motivated workforce.
? Become the most opportune place for excellence and innovation in which educational institutions, government and private sector interact and participate in sustaining a knowledge-based economy.
? Extend and consolidate regional economic cooperation and integration to avail larger markets for its manufactures and services and to create wider intra-regional trade and cross-border production networks.
? Grow as a trade, shipment, and business hub of the region because of being competitive, stable, efficient and hospitable.
? Continue the drive for sustainable development without losing touch with the traditions of community and social inclusion. Dubai has achieved a sensible balance between the commercial and the social, with higher personal incomes but also better social services; welfare benefits and the rising prosperity are widely shared and leave out no one.
? Continue to maintain the traditional values of tolerance and mutual respect for different communities, cultures and religions, and extend them to cover changing attitudes between men and women, and young and old, so that social harmony remains strong and diversity becomes a source of enrichment, keeping Dubai alive in peoples minds as a place of hope and encouragement.
? Achieve a thriving economy, a sustainable environment and a harmonious society by continuing to enhance the Emirates image as a good place to live and a good example for people in other jurisdictions to follow.

2. Strategic Areas:
To move towards strengthening the context that these pillars define, Dubai Government must coordinate action in six areas to build Dubais  leading and vital economic sectors.
To maximize development as a Knowledge-based economy, Dubai Government will provide leadership, in certain situations and partnership in others, whichever is more appropriate. The strategic areas are business climate, infrastructure, innovation, labour force, investment and regional cooperation.
Pursuing objectives in these six areas will pave the way towards realizing Dubais prime goal: sustainable development. Formulating Dubais development strategy within the context of these six strategic areas will provide the main signposts, or road map, marking them out from the central pillar of the prime goal.  The sense of direction that will come out of this roadmap will facilitate the appropriate formulation of Dubais development strategy and will increase the success rate of its implementation.

The strategic issue areas and objectives are:
2.1 Business Climate
Dubai's competitors, at home and abroad, are working hard to make it more attractive to do business in their jurisdictions. Dubai must not only keep pace but seek to lead. Dubai must make it easier for business to start and grow, creating income and employment for Dubai's residents.
Issues Required Actions
Incentives Produce the most attractive incentive package in the region by 2015 by examining the present incentive package to identify opportunities to support private-sector-driven economic development. 
Regulations Improve and streamline regulations and upgrade the legal institutions in order to cope with the requirements of the New Economy. Create an "economic audit" process to help understand the impact of proposed or amended regulations on the process of economic development.
Entrepreneurship Continue to strengthen the entrepreneurial culture through partnerships of government, business, education, community and the media. 
Dubai Government must develop an annual state of business report, including a business climate index, in order to measure progress and compare its performance against competitors.
2.2 Infrastructure
Dubai must upgrade its strategic infrastructure so that it can succeed as part of the New Economy. Economies that fail to invest in basic infrastructure can expect sub-standard economic growth. Careful assessment of priorities will allow Dubai to maximize improvements over the next four years. The fundamental task will be to set overall priorities for infrastructure: roads, ports, airports, (ICT) networks and social infrastructure. This will require new initiatives within both departmental and inter-departmental levels.

Issues and Required Actions


Develop a 5-year plan for  highway rehabilitating and upgrading.


 Take advantage of opportunities to develop the Sheikh Rashid port into a strategic competitive harbor.  

 Identify and take advantage of opportunities to enhance Dubai Airports status as the regional hub, and a key economic development asset.

Electricity, Water and Sewage System

 Develop and maintain these facilities in order to realize the vision of Dubai as a world class city

ICT Sector 

Build on the E-Age initiatives declared by HH Sheikh Mohammed Bin Rashid by using government leverage to ensure Dubai has digital connections second to none by 2015.

Social Infrastructure 

Ensure the providing of health, education and social services in a manner that enhances economic development and the overall well being of Dubai's population.


Recognize the natural environment as an asset and preserve and protect it faithfully, embracing sustainability as a foundation for long term growth.

The government must measure progress in achieving these objectives through annual monitoring.

2.3 Innovation
Innovation in all Dubai industries should be the key to expansion and growth of Dubai's economy. Dubais academic and research institutions should provide a potential advantage, but innovation means much more than research.  It requires increased commercialization of new ideas and processes.
In a small economy like Dubai, the quick adoption of new technology and good design practices is as important as research and inventions; it leads to many innovative products and processes. Dubai must mobilize government, the private sector and academic institutions to create a culture of innovation and design.  The most appropriate institution to lead in this effort would be a "Council of Technology and Innovation (CTI)". Dubai also needs to build on Sheikh Mohammed's Initiatives in this respect. These activities together shall grow Dubais innovation system, for international evidence shows that the best strategy is to assure that the whole innovation system is working, not just fragments of it.


Issues and Required Actions
Federal Investment Work with federal initiatives on research, related infrastructure, and other innovation.
Technology Adoption Encourage businesses to invest in new technologies and design to improve performance leading to new products and processes, and to adopt best practices.
R&D Establish a strategy to identify and increase research and development among businesses and in other areas such as environment sustainability.
Commercialization Directly link business need and support for academic research.
Demonstration Projects Support pilot and demonstration projects in appropriate technologies to help commercialize them and expand research in innovative projects.

The concerned Government Departments will measure progress by monitoring and reporting advancement and obstacles in these areas.

2.4 Labour Force
Dubai's strength is its people. "Human Capital", the collection of skills and training, is as important as are financial or infrastructure capital. In a Knowledge-based Economy in Dubai, human capital will be key to competitive advantage. Dubai needs a well-trained work force that has the skills that the New Economy will require. This is to insure that Dubai businesses have no difficulty in finding qualified workers.
The two sides of the labor force challenge are: finding a balance between the demand for labour by Dubai companies and the supply generated by academic and training institutions. Dubai economic development organizations will help the educational institutions to respond to business and residents needs in training and lifelong learning. Success will see more Dubai residents in full-time, high-paying sustainable employment.


Issues and Required Actions

Matching employment opportunities and training
 Better match business needs with
training programmes by encouraging
business, labor and educational
institutions to plan jointly to ensure  

    1. training of an adequate supply of skilled workers for key industries, 

    1.  providing information on workplace trends, skill requirements, and training opportunities

    1. assisting in matching workers to jobs,

    1. maintaining labor force information for potential investors,

  1. developing an innovative "just-in-time" business training and skills assessment programme.

Youth: Devise a youth employment and development strategy, to focus more on education, experience and information,
to help deal with the requirements of the New Economy and other youth employment concerns.
Immigration: Finalize an agreement with the federal government to ensure Dubai is able to benefit from a strong immigration policy that includes ways to attract entrepreneurs and knowledge workers and prevent unskilled workers from coming into the Emirate
Barriers / inclusion:  Identify and work to remove skills and training barriers, especially low levels of literacy, that prevent citizens from finding jobs.  Identify barriers that impede participation in economic development by women and people with disabilities.  Aggressively tackle those where government has influence.
Employers:   Support efforts to increase the skills of business owners and managers.
Progress could be measured through positive co-operation between economic development organizations to advance improved efforts among labor market partners, including the private sector, educational institutions and non-governmental organizations.

2.5 Investment
Meeting Dubais needs for better services and advancing the enablers of the New Economy means Dubai must grow its economy in a sustainable way. To do so the Emirate must attract new business and retain and expand the existing companies. Expanding Dubai's economy requires greater investment by firms that are focused on export market.

Issues and Required Actions
Public Awareness: 


Raise the level of public awareness and
understanding about the need for investment, the government's role in encouraging investment, and how Dubai compares with other competitors in this area.

Investment framework:

    1.  Implement an accountable and transparent approach to investment that includes efforts to attract high value-added companies. 

    1. Utilize financial incentives. 

    1. Execute specialized training programs. 

    1. Analyze and advise on the most effective government role in helping Dubai financial markets.

    1. Cluster Development:  Work with key partners to create industry clusters.  Attract and recruit high value-added companies.

    1. Marketing Dubai Attract investment in Dubai by aggressively marketing Dubai's unique strengths and opportunities directly to potential investors, at home and outside the Emirate.

  1. Business retention and expansion Identify and remove obstacles to business growth through a focused business retention and expansion strategy which will cover information, capital sources, incentives, business costs and human resources issues.  

The concerned Government Departments will measure progress through reporting on the success and challenges of Dubai's investment attraction programme.

2.6 Regional Cooperation
The small domestic market which characterizes Dubai's economy means that regional cooperation is essential for future economic success of the Emirate. Regional markets are very important at this stage of development because expanding Dubai's economy and bringing more money into the Emirate demands selling more goods and services outside the Emirate. Dubai needs to add value to products whenever it can. Dubai needs to help potential and current exporters to identify more opportunities for export. And Dubai needs to work assiduously to reduce trade barriers to its exports.

Issues and Required Actions
Export promotion : Formulate and launch a trade plan which includes bold targets for trade expansion.
Trade missions: Work with small and medium-sized
enterprises to identify sales opportunities in key markets.
Broadened trade focus Work with partners to expand export activities and increase the volume and value of Dubai's exports.
Market intelligence Identify Dubais opportunities for trade diversification and explore new markets.
Leading sectors Focus on expanding the export base of products & services of leading and vital sectors
Export readiness Work with partners to prepare more businesses and first-time exporters to achieve success in international trade.
Brand Dubai Mount an initiative to highlight Dubai product availability and desirability (based on quality, price and delivery), explore the potential for Dubai brand (Made in Dubai) based on generic product features such as quality,  and assist in marketing Dubai products at home and abroad.

Co-ordinated action in these six strategic areas is crucial if Dubai is to make the best of its economic potential. When appropriate, Dubai government will lead in some areas; at other times, it will be a partner. The strategic efforts will affect all sectors that contribute to and help transform Dubai into a knowledge-based economy.  They will focus Dubais efforts and have particular implications for the leading and vital economic sectors of Dubai economy.

3. Key Enablers for Transforming Dubai Into A Knowledge-based Economy:
3.1 Introduction:
Dubai is already transforming itself into a Knowledge-based Economy. Understanding how will contribute to continued effectiveness.  Transformation as an abstract concept could be defined as shifting from the present state of affairs to a qualitatively advanced one. But this is easier to say than to do. The process itself is challenging. The crucial element behind Dubais success is the presence of a visionary leadership committed to realizing the Emirates declared objectives.
Dubai is fortunate to have had leaders who provide that quality, beginning with Sheikh Rashid Al Maktoum, who was both a visionary and an effective leader. His vision was reflected in the magnificent idea of deepening Dubai Creek.  This opened the way for Emirate to become a commercial hub by transforming its sea port into an international one handling a large number and high volume of commercial fleets. His commitment and determination has resulted in the realization of that objective. Dubai now is the most important commercial hub of the Region.
Many remarkable advances have laid the solid foundation for transforming Dubai into a knowledge-based economyan economy which will differ importantly from the old economy.  H.H Sheikh Mohammed bin Rashid Al-Maktoum, the ruler of today's Dubai, a great visionary leader as well, is committed to preserving Dubai's strategic position in the region and maintaining its reputation as one of the most attractive cities to live and work in. This Dubai can achieve only by remaining a front runner in the digital economy.  
Dubai government has taken bold initiatives toward achieving that objective; notably among them are: E-Government, E-Commerce, Dubai Internet City (DIC) and Sheikh Mohammed IT Education Project.  Initiatives such as these require that government promptly advance and continually update the ICT sector and promote its use.  These are essential enablers.
3.2 Electronic Government (E-Government):
On April 4th, 2000, H.H Sheikh Mohammed bin Rashid ordered that within 18 months time Dubai government should implement E-government. The importance of this initiative is  that Knowledge-based economy is as much about new organizational models as it is about new technologies.
In the Knowledge-based economy, the economic success of any government will increasingly be determined by how effectively it can advance technological innovation, entrepreneurship, education, specialized skills and the transition of all organizationspublic and private--from bureaucratic hierarchies to learning networks.
In the offline environment, clients often find it hard to access the full range of government services that are of interest or relevance to them. Services can be hard to identify and locate. It can often be impractical for clients to access all services that they require. In the online environment, the task of locating and identifying services can be straightforward. Separate services can be integrated. Multiple approaches to accessing information and services can be designed, so that people who look for services targeted towards them can find the information they need easily. E-government has as its objective bringing government closer to people to encourage them to interact with government.
Developing a vibrant  Knowledge-based economy is not an end in itself; it is the means to advance larger progressive goals: new economic opportunities and higher living standards, more individual choice and freedom, greater dignity for Dubai inhabitants, stronger communities and wider participation in public life.
All of the government Departments must work smartly and diligently to transform Dubai government from an Industrial Age government into an Information Age government.  To the extent that Dubai government fails to meet Sheikh Mohammed's aspiration in this regard, it will impede rather than advance the sustainable growth of the Emirate. The guiding signpost in this respect shall be," The Future is Now".
3.3 Electronic Commerce (E-Commerce):
In the World Trade Organization Work Programme, E-Commerce "is understood to mean the production, distribution, marketing, sale or delivery of goods and services by electronic means. Commercial transaction can be divided into three main stages: the advertising and searching stage, the ordering and payment stage and the delivery stage. Any or all of these may be carried out electronically and may therefore be covered by the concept of 'electronic commerce'. Quoted in International Trade Forum, 1/99ITC Geneva.)
Broadly defined, E-commerce encompasses all kinds of commercial transactions conducted over an electronic medium or network, mostly the Internet. E-commerce covers Business to Business (B2B), Business to Government (B2G) and Business to Consumer (B2C) transactions, and is not limited to the purchase of a product. It includes all information or services that a company may offer to its customers over the net, from pre-purchase information to after-sale service and support.
Dubai must cope with and take advantages of these advances in the world trade system. The initiative of Sheikh Mohammed to establish a market in Dubai for business-to-business E-commerce (Tejari.com) is another visionary step toward putting Dubai online and maintaining its competitive position.
As a regional trading hub, Dubai must adopt E-commerce to increase the rate of participation of its small and medium enterprises (SMEs) in the global economy. E-commerce has the potential to expand the Emirate's current exports and grow the number of new exporters. Since E-commerce is still in its infant stages among exporters and other companies, Dubai has taken a leading role through the formation of Tejari.com.  Government is giving strong support to this premier digital business-to-business marketplace in the Middle East Region and Dubai's own E-business gateway to global markets.  Tejari.com emphasizes cost savings, efficiency and building better relationships among customers, producers and suppliers using E-commerce as a tool.  The following factors are driving the growth of E-commerce:
? Lower purchasing costs.
? Reduced inventory/the right products in stock.
? Lower product cycle times.
? More efficient and effective customer service.
? Lower costs in sales and marketing.
? New sales opportunities.
With the establishment of this B2B marketplace, Dubai is taking the lead in adopting best practices in the world of E-commerce.  This will lead to the digital delivery of tangible products. When Dubai reaches this stage it would be appropriate to declare that Dubai has successfully transformed itself into a Digital Economy Jurisdiction. 
3.4   Dubai Internet City (DIC)
The third important enabler for transforming Dubai into a Knowledge-based Economy is Dubai Internet City (DIC), known formally as the Technology, Electronic Commerce and Media Free Zone Authority.  This is the world's first free trade zone for E-commerce and is opening the way for Dubai to remain not only the premier business hub for a region that stretches from Egypt to the Indian subcontinent and from South Africa to the Commonwealth of Independent States (CIS), with over 2 billion people, but to become one of the world's leading E-commerce centres as well.  DIC is the perfect home for Digital Economy industry established IT companies, multimedia businesses, Telcos, dot.com start-ups, service companies, remote services providers, incubators, venture capitalists and professional firms.
Doing business successfully within DIC depends on many factors, notably:
? World-class ICT infrastructure.
? State-of-the -art urban infrastructure.
? Access to a pool of necessary talent.
? Straightforward laws and regulations.
? Supportive environment.
? Gateway to domestic as well as foreign markets.

3.5 H.H Sheikh Mohammed IT Education Project:
Since the Internet has become the driving force behind the advance of the Digital Economy, H.H Sheikh Mohammed has ordered that all Dubai schools should be connected to the Internet. The objective is to produce highly qualified citizens who will be capable to fill the knowledge jobs, which will be created through the successful transformation of Dubai into the E-Age. 
As the developer of human capital, education is an engine for economic growth and social development; it assists business and industry in achieving their goals. It is the means by which people can take advantage of economic opportunities that will enable them to increase their income, self-sufficiency and social development. Educating and training of Dubai citizens will be essential to maintaining the Emirate's competitive advantage.
Dubais public education system needs strong government and citizen support.   Because high school completion is the foundation for a lifetime of learning, Sheikh Mohammed's initiative is the critical first measure to strengthen that foundation. Ensuring that Dubais citizens are literate and ready for labor market challenges is critical to economic growth and prosperity. Dubai must work to ensure that its young people have the necessary literacy skills to make successful transitions from school to work, and Dubai must develop pertinent intervention strategies like Sheikh Mohammed's.
Through the public school system and colleges and universities the Ministries of Education and Higher Education must ensure that all Dubai citizens have access to a first - class education.  Dubai must strengthen the link between education and business need and support academic research. Government must strongly support research if Dubai is to prosper as a Knowledge - based economy.  In formal and informal settings the education system must develop a proper strategy for learning across the life span; it must foster continuous learning and skill development. Reform efforts must acknowledge that economic growth requires both education and opportunities. Education without opportunities will only lead to brain drain.
Therefore, Dubai, to provide education and opportunity for its people, focusing skills and lifelong learning the Knowledge-based Economy, must:
? Invest in early childhood development to ensure that children are ready to learn at an early age.
? Transform elementary and secondary education
? Improve teacher quality,  to ensure that students are ready for post-secondary education and workplace.
? Invest in higher education and encourage it  to be more market - driven and responsive to the needs of the Digital Economy skills and businesses.
? Create a research and development presence using the universities to attract intellectual talent and promote technology understanding.

With this initiative, Dubai has begun to equip all its with the latest IT equipment, link them to the Internet, and transfer the necessary skills to students to make them ready to participate fully in the E-age as knowledge workers and E-age entrepreneurs.
The first step in the right direction is to eradicate the IT-illiteracy of the secondary schools' teachers themselves. The establishment of the IT College in Dubai to perform this task is a clear evidence of the commitment at the highest level of Dubai Government to ensuring that future generations of Dubai are truly knowledge workers.
All of the above initiatives represent new dimensions for Dubai's economy that will enable the digital E-age and promote new modes for organizing business life. Taken together with key features of Dubais emerging business climate, these initiatives can have a major impact on the organizational effectiveness of both government and private companies and the conduct of business.
4. Special Measures for The New Economy:

The following are some of the essential measures which Dubai government needs to adopt and improve in order to advance the new economy institutions in the Dubai.

4.1 ICT Infrastructure:
Information and communication technology (ICT) is fast developing and its use in trade and industry, economic and financial analysis, administration and management is crucial to the transition into the Digital Economy, which will open great opportunities for Dubai.
 Dubai is determined to transform itself into a Knowledge-based economy as the only viable path for sustaining its future development.  Thus Dubai Government must become a customer-driven organization. Information and communication technology (ICT), such as the ICT facilities, is a powerful tool the government can use to accomplish this goal. Dubai Government should use the Internet to create a one-stop shopping site for people seeking government services.
Fortunately, Dubai's vision and strategic characteristics support this effort. These characteristics are visible in a number of comparative strengths such as:
? Dubai's well-established legal and institutional structures making it a safe and supportive environment for commerce.
? A world class infrastructure and telecommunications network.
? A tradition of rapid technology uptake and consumer markets that are sophisticated and enthusiastic about new information, products and services.
? Being close to Asian markets, strong trade in the region already, and having a body of business and trade knowledge that will be critical in expanding the Knowledge-based Economy in the region.
? Servicing markets in two hemispheres because Dubai is in a different time zone than Europe and the Far East allows firms to have global continuity of workflow and efficient handover of activities.
? Great multinational diversity offers a natural advantage as a regional base for firms looking to build their business in the global New Economy.
? Dubai's Strategic location, lifestyle and environment are attractive to international enterprises.
? Dubai's life exhibits diversity, creativity and openness.
All of these strengths and advantages position Dubai well above its weight in the global Knowledge-based Economy, but do not by themselves guarantee the continuity of this position. To assure continuity Dubai Government must remove all the hurdles and barriers by pgrading and advancing its ICT sector.
Despite its other attractions for businesses, communication costs may discourage foreign companies from investing in Dubai.  Establishment of Dubai Internet City (DIC) and flourishing of e-commerce might make the private sector more interested in investing in variety of areas, including telecommunication, IT industry, Internet services provision and other professional services. Therefore, proactive and supportive policies will be essential to reap the benefits of this emerging opportunity.

4.2   The Internet:
The Internet has transformed computer, communications, and the information technology world wide as has nothing before.  It has brought a remarkable integration of the capabilities of each of these technologies. The Internet is a worldwide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals without regard for geographical location. It has enabled society to use online tools to accomplish E-commerce, the acquiring of information, and community operations.
The Internet thus has multiple functions:  essentially a means for improved communication and for accessing and exchanging information worldwide. One of these functions very much related to Dubais economy are the economic and financial transactions and trade grouped under the heading "electronic commerce".
Since Dubai is transforming its trade activities into e-commerce, and since the Internet is the major tool for this transformation, the provision and promotion of internet servicethrough an intensive and wide range connectivity programwill be crucial to the progress of Dub

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