How Middle East governments can boost innovation in their economies

02 March 2022 4 min. read
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Held in the second week of February, the ‘Innovation and Future of Government Work’ conference by KSA’s Institute of Public Administration (IPA) saw leaders from across the GCC’s public and private sector come together to discuss how governments can prepare for some of the largest changes faced in their history – with a focus on economic diversification and innovation.

The event was attended by leaders from across the public sector, including several ministers, deputy ministers, and undersecretaries from the Kingdom’s government, and hosted by experts in the field of public services and innovation.

Among the private sector experts on stage was Sia Partners, a French-origin management consultancy with a longstanding presence in the GCC and a proven track record in innovation.

How Middle East governments can boost innovation in their economies

Speaking at one of the panel discussions, Rafael Lemaitre, a partner at Sia Partners and a Board Member of the Global Innovation Management Institute, said that governments looking to drive innovation must first get their priorities straight. Once this is in place, the lens should shift towards the execution phase.

This first requires consideration of the key mission of governments. Lemaitre argued, “Government exists to provide value and to organise and order societies. Their mission is to enhance the quality of life of their people and businesses; making services more accessible; making services better and faster, and so on.”

Innovation is an integral part of this, “because in their constant pursuit of delivering better value to society governments need to find new ways and enhanced ways to deliver that value,” said Lemaitre, an executive who has consulted and advised the public sector from Europe to Latin America and the Middle East.

As with any entity looking to more quickly drive innovative practices, governments in the Middle East might look to cooperation to help build momentum. Lemaitre highlighted how creating an ecosystem of partners can be an important step, as it will allow for governments to tap wide-ranging knowhow, from different companies or organisations.

“What is very important for government agencies is to recognise that partnership strategies should be at their core,” Lemaitre contended. “A government entity needs to have a partnership strategy, with all its different stakeholders clearly mapped, and ensure there is an engagement strategy across pillars.”

By taking a holistic view, cross-pollination can unlock untapped benefits. “For example, while universities are great way of sourcing talent, they can also offer proving grounds for ideas, research and development, and collaboration for testing prototyping.”

Meanwhile, governments can also find partners from the private sector to help accelerate transformation programmes, including the likes of global institutions, think tanks, consulting firms and technology partners.

“There are wider impacts of this kind of collaboration. Governments pulling together these ecosystems for their innovation efforts can help facilitate long term success within their economies,” said Lemaitre.

He continued, “The government in my opinion has a central role as a facilitator of the entrepreneurship ecosystem. This is especially relevant in the GCC, where there are very strong government agencies driving progress; if you see the different start-up ecosystems (from incubators to scale-up networks), all of them are heavily anchored in government intervention.”

Pointing to one particular case of this, Lemaitre noted the incubators that Saudi Arabia’s Ministry of Culture has launched in recent years. “In an economy which until recently was dominated by state-controlled, oil-centric businesses, leaving entrepreneurship development in the hands of the private sector is not possible. With strong government intervention like this, however, governments can develop entrepreneurs, maturing them before allowing them to stand on their own feet.”

Top priorities

Considering the pace of change of the current era, it is hard to pinpoint what the top priority of each government will be in the Middle East. However, there are some universals which the public sector will need to get a handle on if they wish to build innovative economies in the coming decades.

According to Lemaitre, the most interesting areas for government to innovate in the coming decade will surround the complex systemic issues that have come to the fore. These range from well-known, historic social ills such as poverty, income disparity and social inequality, to more recent crises such as pandemic control, and climate change.

But besides these “wicked problems”, a raft of technological change also awaits, if governments can unleash the innovative potential of their economies.

“While technologies have already brought us many social changes, right now we are only seeing the tip of the iceberg,” Lemaitre said. “Perhaps the most talked about aspect of technology in the near future is the metaverse. If the hype of the moment is to be believed, everyone will try to jump in.”

“There too, we will have the first layer of innovation which will be governments trying to provide services – but as the technology throws up new questions of data privacy and digital identity, the most meaningful innovations of government in the metaverse will actually involve how to regulate or manage a whole new level of social interactions.”