Breaking out of the innovation trap? Towards promoting private R&D investment in Kuwait

Husan Arman, Simona Iammarino, J. Eduardo Ibarra-Olivo and Neil Lee

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Kuwait combines rich-world national income with the Research and Development (R&D) spending of a developing country. This situation is unsustainable. This report uses the National System of Innovation (NSI) framework to investigate how the Kuwaiti government could increase private sector R&D spending. Based on a review of the existing literature and data alongside a survey of large Kuwaiti firms, we find that few of the necessary and sufficient conditions for a functioning NSI are currently in place. The most important problem for private sector R&D in Kuwait is the general lack of skills and capabilities for innovation, which means that firms have few incentives to invest in risky, long term and skill intensive R&D activity. Future efforts to increase R&D by simply investing further in public R&D risks wasting money, without the adequate institutions, skills and framework conditions required to turn R&D into commercial success. Instead, we argue the Kuwaiti government should rethink the education system at all levels, implement a bottom-up diversification strategy, strengthen the Kuwaiti Information System and carry out a thorough governance review of innovation processes.

JEL-codes: E6 J01 R14 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2021-03-01
New Economics Papers: this item is included in nep-ara and nep-knm
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Citations: View citations in EconPapers (2)

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