developing skills & talent for sustainable ......developing new skills and talent to spur...

DUBAI INNOVATION INDEX 2017 DEVELOPING SKILLS & TALENT FOR SUSTAINABLE INNOVATION

CONTENTS

FOREWORDS 2

PREFACE 4

EXECUTIVE SUMMARY 6

01. DUBAI INNOVATION INDEX FRAMEWORK 8

1.1 Introduction 9

1.2 Macroeconomic Framework 10

1.3 Microeconomic Framework 11

02. GLOBAL CITIES ANALYSIS 12

2.1 Global Cities Rankings 13

2.2 Innovation Enablers 22

2.3 Innovation Performance 26

03. CITY LEVEL ANALYSIS - DUBAI 28

3.1 Macro Overview 29

3.2 Innovation Enablers 28

3.3 Innovation Performance 31

04. PRIVATE SECTOR ANALYSIS - DUBAI 33

4.1 Survey Responses 37

4.2 Private Sector Innovation Performance Overview 38

4.3 Industry Performance 41

4.4 Innovation Performance by Company Size 43

4.5 Detailed Industries 44

05. RECOMMENDATIONS 68

5.1 Progressing through Previous Recommendations 69

5.2 Our Recommendations 70

06. APPENDIX 72

Appendix 1: References 73

Appendix 2: Benchmarking with other innovation studies 79

Appendix 3: Methodology and Assumptions 82

Appendix 4: Data Types and Scaling Factors 87

Appendix 5: Data Indicators and Sources 94

1

H.E. Hamad BuamimPresident & CEODubai Chamber of Commerce and Industry

Considering the rapid rate at which technology is evolving, it has become clear that any government or business that is slow to adopt innovative strategies and solutions will eventually find it too difficult to meet the demands of their societies in the future.

The results of the Dubai Innovation Index Report 2017 show that Dubai continues to make great strides in its transition to a knowledge-based economy and global innovation hub. Efforts to foster innovation have been introduced across all segment’s society, with notable achievements made within the city’s public and private sectors.

Bold strategies have been put into place which focus specifically on leveraging artificial intelligence, blockchain technology and 3D printing. These developments combined with education-focused initiatives form part of a new chapter of Dubai’s economic and social progress that will position the emirate as a global innovation leader and hub for future industries.

Recognising the importance of evaluating progress in this area, the Dubai Chamber of Commerce and Industry launched the Dubai Innovation Index in 2015. The award-winning index, an integral pillar of our innovation strategy, measures and compares innovation output across 30 global cities.

The Index has become an important tool for benchmarking efforts within Dubai’s private sector. Most importantly, it enables us to look at the areas where businesses can improve, while it also provides us with practical recommendations for boosting performance in the future.

The third edition of the Index points to an urgent need to develop skills and talent in a fast-changing business world. Additional investment in education, research and development is needed to improve in this area and ensure that our youth has access to new job opportunities.

Fostering closer cooperation between Dubai’s public and private sectors has always been a major priority of the Chamber. By continuing on this path, we hope to facilitate new partnerships that stimulate long-term economic growth and add value to our society.

H.E. Majid Saif Al GhurairChairmanDubai Chamber of Commerce and Industry

The results of the latest Dubai Innovation Index Report clearly demonstrate Dubai’s unique ability to set and achieve new innovation targets. In the third edition of the Index, Dubai has once again climbed the rankings, outperforming major business hubs such as Shanghai, Berlin and Madrid.

The emirate has witnessed a dramatic improvement in its Political, Economic and Social Environment score (PES), particularly from a social perspective, which includes happiness, human development and population demographics. This, in turn, resonates with the leadership’s commitment to make Dubai the happiest city in the world.

Several initiatives were launched by the government to improve the quality of education, boost efficiency in the sector, and encourage a desire for learning among the population. These initiatives helped improve education score, with further efforts expected with the implementation of the UAE Centennial 2071 Plan.

The innovation score of Dubai’s private also increased this year, highlighting growing awareness among businesses about the importance of investing in innovative strategies, solutions and technologies to enhance their performance and productivity.

It is crucial that companies do more to create a culture of innovation within their organisations and embed creativity into their operations and processes. In an era of continuous change, companies must adapt, define their core competitive advantage and innovate towards it.

Moving forward, there is still work to be done to raise the quality and capabilities within the education sector and prepare younger generations for an evolving job market that requires new skills and capabilities.

Additional government efforts are still needed to enhance the regulatory environment and foster innovation and creativity. We see huge potential for establishing new public-private partnerships that can boost innovation output in key economic sectors.

As we stand on the brink of the Fourth Industrial Revolution, it is clear that innovation will play a major role in reshaping the global economy. We are confident that Dubai will realise its innovation vision and become a leading example to the rest of the world.

2 Dubai Innovation Index 2017

Prof. David GannVice President of Innovation Imperial College London, UK

It is good to see the Dubai Innovation Index in its third year, with its focus on talent and sustainable innovation. The Index provides an important framework for Dubai, and congratulations on the upward movement to 14th place. We know that innovation underpins productivity and economic growth, raising living standards. Cities that foster innovation are more prosperous and resilient than those that have little capacity to change.

The Index shows that Dubai’s government clearly understands the need to create conditions for innovation to thrive. It recognizes the threats and opportunities that innovation brings for employment and skills with growth in deployment of the Internet of Things, AI, machine learning and robotics. More investment in education, research and translation will be needed by the public and private sectors to harness the benefits of innovation in these areas. Last year I was privileged to visit Dubai’s Smart City Accelerator and see first-hand the efforts being made to support creative, talented entrepreneurs and attract inward investment.

The Framework and Model underpinning the Index has been refined to capture changes in the macro and local environment. These exciting developments are welcome, demonstrating the ability to use some 2000 data points from the private sector. This derives a score from the analysis of capability, activity and impact and the model uses regression analysis, hence an algorithm to produce predictive results. These new developments include enhancement to robustness testing of the framework: last year tests were made by replacing two cities, this year by adding two cities, bringing the total to 30.

The model can be expanded for use in other cities. With its common macro data, it requires local inputs to provide individual city-level results and comparisons. Policy-making and investment decisions in Dubai have benefited from having the Index as a reference framework. I believe other cities could equally benefit and I encourage them to become involved.

In short, the Index is flexible, scalable and now has an element that is predictive, enhancing its usefulness.

Dr. Anil KhuranaPwC PartnerStrategy & Innovation

PwC is proud to be part of the 3rd edition of the Dubai Innovation Index and highly committed to support Dubai in driving its innovation aspirations. I would like to take this opportunity to congratulate the team for winning the Best Unconventional Project at the World Chamber Competition, Sydney 2017. The Index framework has evolved and further demonstrated its practicality by enabling Dubai to use the insights from the Innovation Index in its ongoing progress towards being a leading and innovative city.

Despite the impact of the economic slowdown on the innovation performance of some of the cities, Dubai has shown progress in developing its innovation ecosystem. The progress over the past year has been made with a particular focus on the development of skills and talent, where both the private and the public sectors have participated in initiatives to improve the quality of education, support training providers and encourage entrepreneurship.

Dubai has taken another big step towards building a better future through innovation driven by not only digital technologies such as AI, Industry 4.0, autonomous vehicles, blockchain and others, but also through the role of science and technology in its future, e.g., as part of the UAE centennial 2071.

3

PREFACE

Rising investment in intangible assets (i.e. software, designs, new forms of business organisations) has proved to be important for growth and productivity, and such intangible assets are often a direct manifestation of human capital built on rising educational attainment and investment in skills (OECD, 2015a).

Global cities are facing acute pressure to build their innovation capabilities to remain competitive. Digital innovations, such as Artificial Intelligence (AI), Robotics, Big Data, Internet of Things etc. are having disruptive impact on skills needs. With the technological, demographic and socio-economic disruptions, the employment landscape is going to transform, as the needs for certain talents will fade while others emerge. The employment reform is shifting towards a demand of highly-skilled labour, with distinctive competencies and proficiencies in specific areas of expertise.

There are three main areas of investment and development that will benefit both private and public organizations for their future needs:

• Develop the education system

• Invest in Research and Development (R&D)

• Build a strong entrepreneurial ecosystem

This year’s Dubai Innovation Index (DII) study highlights the cities’ focus on the need for developing new skills and talent to spur innovation. An example, the Association for Talent Development 2017 Summit was held in South Korea, under the theme of “fostering innovative talent”. The discussions were around the role of talent development in helping organizations innovate and achieve their strategic goals by sharing the latest global talent development trends and best practices.

Educational institutions play a major role in making innovation more effective, whether by collaboration of education institutes with public and private organizations for Research and Development (R&D) or by developing entrepreneurial capabilities in students.

The education system and the curriculum must evolve with the rapid disruptions to promote creativity, innovation, analytical and critical thinking. Discussions on the personalization of the curriculum have become widespread: A schoolchild is no longer perceived as a passive recipient of school knowledge, but is socially active and participative in suggesting ideas and bringing in new knowledge into the classroom.

Recently, UAE government has announced the launch of the National Strategy of Higher Education 2030, that aims on building the highest scientific and professional education standards to serve the UAE’s future generations and empower them with the knowledge to change the future. Public schools are also focusing on updating and developing their curriculum, and making high standard education accessible to all youth in the UAE.


Despite the government efforts, young people entering the workforce in the region are faced with one of the highest youth unemployment rates globally at around 30%, a rate that has been worsening since 2012, particularly for young women. A recent PwC survey shows that 60% of CEOs believe the education systems in the Middle East are failing at providing students with the right skills for employment. Education providers are struggling to expand their teaching capacity and research activities due to challenges with funding, access to land, student demand, and the ability to attract and retain top research and teaching talent. The primary and secondary education sector needs to reform outdated national curricula and find an affordable way to involve the private sector in capacity expansion and improving student outcomes. Despite efforts to encourage more youth into STEM subjects, the range of courses offered, still reflects the market demand for traditional preferences such as business courses.

Research and development is a key driver of innovation. However, it is hard for a city to have a significant impact in R&D if its only restricted to local resources. Global collaboration is vital to accelerate the innovation process and can be done through various means, such as contributing in funding and resources, exchange talent and providing the necessary technologies to aid in R&D.

The third area that a city needs to build is a strong entrepreneurial ecosystem for cultivating innovation by encouraging young minds to contribute to innovation activities. Entrepreneurship is a practice that requires support from both the public and private sector.

Dubai’s private sector should provide youth the opportunities for business experience at an early age, through work experience and internships aligned with their education programs. On the other hand, educational institutions also need to take initiatives to collaborate with the private sector and seek their inputs on the required skills in shaping the curriculum.

There is also a need for a cultural shift where calculated risks and failure are tolerated and new suggestions and ideas are accepted. The Dubai government has a number of initiatives to build its entrepreneurial ecosystem to attract and retain global talent. Dubai Future Accelerator Program is one such initiative.

It is important to consider all three aspects for a city to progress as a knowledge society in encouraging innovation: Use knowledge, create knowledge and share knowledge. Human capital is the key driver of the innovation and is fundamental in developing a knowledge-based economy for sustainable growth.

Happiness has direct relationship with skills as skilled people enjoy on average higher earnings, better job satisfaction, better health conditions and better educational outcomes for future generations. They also have a better foundation for further skills acquisition and lifetime employability. They demonstrate increased capacity to accept and adapt to technological change, to adopt innovations and benefit from them.

“ NATURAL RESOURCES ARE NOT EVERLASTING. HOWEVER, THE INTELLECTUAL PERSON WHO PIONEERS THE FUTURE AND ADAPTS TO GLOBAL CHANGES WILL PERSEVERE”

H.H. Sheikh Mohammed bin Rashid

5

EXECUTIVE SUMMARY

In the DII 2017, Hong Kong ranked first, moving up 2 ranks from last year, and replacing New York (rank 2); followed by London (rank 3), Singapore (rank 4) and Seoul (rank 5).

Dubai ranked 14 out of 30 global cities, climbing up 1 position since last year. In fact, Dubai and San Francisco (rank 10) were the only two cities to have shown consistent improvement in ranking from 2015 to 2017.

Top ranked cities are focusing on creating an ecosystem to drive innovation by investing in R&D, digital technology and their innovation infrastructure. There is also an emphasis on improving the quality of education to help develop talent within cities. For example, Hong Kong’s government invested $18 billion in re-industrialization and funding university projects, to help build the talent pool and improve the quality of education. These cities have been the pioneers in innovation, and it’s their forward thinking and constant development that have contributed to their success.

The global economy has witnessed a slowdown in 2017, as a result of geopolitical instabilities and persistent structural problems (e.g. low productivity growth and high income inequality). This has had an impact on the overall innovation performance of cities. On the other hand, cities that were not affected by the economic slowdown (Australian, Scandinavian and US cities) have all put focus on innovation, which is reflected in their increase in rank in 2017.

Dubai performed exceptionally well in the political, economic and social environment, that measures, among other indicators, the unemployment rate, political stability and human development.

This comes despite the weaker performance of the economy in the Middle East due to the drop in fiscal revenues in oil companies that affected the overall economy in the region. Dubai has developed and launched several initiatives to encourage innovation, including the development of Artificial Intelligence strategy as part of the UAE Centennial 2071, and the launch of the National Strategy of Higher Education 2030, that aims to shift to a knowledge-based economy and to empower the UAE’s future generation with knowledge to change the future.

DUBAI RANKED 14 OUT OF 30 GLOBAL CITIES, CLIMBING UP 1 POSITION SINCE LAST YEAR. IN FACT, DUBAI AND SAN FRANCISCO (RANK 10) WERE THE ONLY TWO CITIES TO HAVE SHOWN CONSISTENT IMPROVEMENT IN RANKING FROM 2015 TO 2017.

“Building capability for

the future”

2015

“Strengthening public and

private sector collaboration”

2016

“Developing skills & talent

for sustainable innovation”

2017


Dubai’s private sector performance was also measured, through surveys sent out to organizations, and interviews with key players in the market. The private sector’s innovation score has increased by 3% this year, after a 6% rise from 2015 to 2016.

The private sector faces difficulties in seeing the benefits and importance of innovation, as it is a trading industry that relies on adopting ideas and bringing them to the market rather than developing them in-house.

The innovation enablers have improved significantly, which showed that organizations are taking measures to enhance their capabilities and carry out innovation-related activities. However, the impact of innovation remains a challenge, especially in developing new products and building Intellectual Property (IP). This is an opportunity for both the private and public sector to further develop the innovation performance in Dubai, by developing the innovation infrastructure (e.g. increasing the spending on software) and enforcing Intellectual Property regulations and laws.

This year, Professional Services had the highest percentage increase, followed by Information Communication and Technology (ICT), and Wholesale and Retail Trading. ICT has the highest overall innovation score: organizations have the ability to enhance their internal efficiencies and implement new ideas and take them to market.

Our 2017 study shows that there is an emphasis across cities and industries in the private sector on the development of skills and talent. In fact, both governments and private organizations are focusing on investing in Human Capital to empower their innovation activities. This has been achieved through 3 different means: training and development, education and collaboration of organizations with education institutes, and entrepreneurship to support entrepreneurs in growing, as well as attracting international entrepreneurs

The DII 2016 recommendations have had an impact on Dubai’s performance in innovation. Initiatives were put in place by both the private and public sector to improve education, import talent from abroad and embrace the newest technologies. These initiatives resulted in an improvement in the innovation on a city level and on a pillar level (e.g. Skills and Talent and Technology readiness).

The index aims to build a solid and sustainable innovation ecosystem: based on last year’s advancements and this year’s areas of development. We have identified major gaps in the ecosystem as part of the DII 2017 recommendations, particularly in global collaboration, intellectual property firms, private investments and banking, to continuously encourage and support innovation-related activities within private organizations and the city as a whole.

The index has constantly been developing since 2015 to accommodate with the changing ecosystem: in 2016, we replaced two cities (Istanbul and Mumbai) with Nairobi and Bangalore. This year, two progressive cities, Tallinn and Warsaw have been added to our city level analysis, which proves that the framework is flexible and scalable, and continuously evolving with time.

OECD (2015a), The Innovation Imperative: Contributing to Productivity, Growth and Well-Being, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264239814-en. OECD (2016), Getting Skills Right: Assessing and Anticipating Changing Skill Needs, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264252073-en.

THE PRIVATE SECTOR’S INNOVATION SCORE HAS INCREASED BY 3% THIS YEAR, AFTER A 6% RISE FROM 2015 TO 2016.

THIS YEAR, PROFESSIONAL SERVICES HAD THE HIGHEST PERCENTAGE INCREASE.

7

DUBAI INNOVATION INDEX FRAMEWORK01


1.1INTRODUCTION

In line with Dubai’s vision to become the world’s most innovative city in the years to come, the Dubai Innovation Index was conceptualized in 2015. It reflects on the innovation performance in Dubai and measures innovation at both city and private sector levels.

A comprehensive framework was designed to ensure a fair and justifiable analysis of the macro (city level) and micro (private sector level) performance. This enables readers to draw comparison on innovation among global cities, and within the private sector in a city (currently Dubai but can be extended to any other city), across industries and company sizes. This concept allowed us to identify the gaps in the innovation ecosystem, to draw recommendations and next steps the city can follow in order to achieve sustainable development and a fast growing economy based on innovation.

Figure 1: Dubai Innovation Index Framework

DUBAI INNOVATION INDEX FRAMEWORK

IMPACT

PRIVATE SECTOR INNOVATION SCORE


Calculated as a average of sub-indices identified under Capability, Activity

and Impact

PRIVATE SECTOR OUTPUT RATIO

Calculated as a ratio of performance (capability and activity) and impact

DUBAI INNOVATION OUTPUT RATIO

Calculated as a ratio of performance to enablers

DUBAI INNOVATION INDEXCalculated as an average of output from measurement of enablers and performance of innovation across

global cities

MACROECONOMIC VIEW | CITY LEVEL

ENABLERS PERFORMANCE

Measures tangible and intangible

innovation outputs

Measures tangible and intangible

innovation outputs

Measures tangible and intangible outputs in the

private sector

ACTIVITY

Measures the utilization of resources available

CAPABILITY

Measures the readiness of organizations to carryout innovation

9

1. INTRODUCTION continued 1.2

MACROECONOMIC FRAMEWORK

Macroeconomic view

The macroeconomic view of the index studies ecosystem elements at the city level in two parts: first those that enable innovation and second, those that measure innovation performance.

Performance: Performance measures the outputs of innovation across the city. Both tangible and intangible innovation outputs are considered and measured. Intangible performance measures refer to the development of talent, intellectual property and collaborative partnerships for innovation, whereas tangible performance measures include development of new products and services, and economic growth.

Enablers: The term enablers of innovation refers to all elements of the innovation ecosystem that help create the ideal environment for innovation. Enablers of innovation include macroeconomic factors such as Political, Economic and Social Environment, Government, Funding, Infrastructure, Skills & Talent and Culture. Measures of enablers are forward looking and are expected to have a long-term impact. A higher enabler score implies investments are being made by the city to build a sound foundation to support innovation activities and initiatives in the future.

Dubai Innovation Index: This score is a top-down macroeconomic measure of innovation of a city based on city level data from a range of widely used sources. 30 global cities have been selected for this study. The score takes into account both enablers (as the input) and performance (as the output) as equal contributors towards innovation.

Innovation Output Ratio: The Innovation Output Ratio is defined as the ratio of performance score to enabler scores for a city. This measure indicates the city’s abilities to translate its investments in creating an ecosystem for innovation to successful outcome of innovation.

Figure 2: Macroeconomic View Framework

DUBAI INNOVATION INDEX

INNOVATION OUTPUT RATIO= Innovation Performance Score /

Innovation Enabler Score

INNOVATION ENABLERS INNOVATION PERFORMANCE

Tangible Outputmeasures tangible results

of innovation including new products & services, creative

outputs, technology outputs and revenue generation in the city

Intangible OutputMeasures outputs in terms of intellectual property, creation of culture and the extent of collaboration for innovation

Governmentmeasures policies and regulations set by the

government that impact the business environment

Fundingmeasures the extent and

prevalence of funding, both private and public which helps

develop new businesses

PES Environmentmeasures political stability, economic environment and

overall appeal of the city

Infrastructuremeasures the infrastructure

for innovation including R&D labs, ICT infrastructure and the

environmental performance of the city

Culturemeasures the presence of an

entrepreneurial and open, employee friendly culture in the

city which boosts innovation

Skills & Talentmeasures the enablement of

skills & talent through primary and higher education and institutions of execution


1.3 MICROECONOMIC FRAMEWORK

Private Sector view

The private sector view is a measurement of firms’ capability to innovate, its activities and overall impact of innovation. This study is conducted through an online survey and interviews with Dubai’s business leaders for qualitative inputs. This measures innovation across the whole private sector as well as for key industries and varying firm sizes

Impact: Impact measures the outputs of innovation across private sector firms in Dubai. Both tangible and intangible innovation outputs are considered and measured. Intangible performance measures refer to the development of talent, intellectual property and collaborative partnerships for innovation, whereas tangible performance measures include development of new products and services, and economic growth.

Capability: Capability measures a firm’s ability to innovate using elements that can sustainably influence innovation activity, i.e., firm’s strategy, leadership and culture, management of innovation, organization enablers, collaborations, skills and talent.

Activity: Activity measures a firm’s activities across the innovation lifecycle from accessing, developing and implementing ideas. Activity of innovation is distinctively measured at private sector level since real innovation activity elements can practically be measured at firm level only.

Note: The capability and activity measures at private sector level collectively are equivalent to enablers of innovation that can be evaluated and compared with enablers at macroeconomic level.

Private Sector Innovation Score: This score is a bottom up measure of innovation at private sector level. The score takes into account capability and activity (as the input) and impact (as the output) as equal contributors towards innovation.

Private Sector Innovation Output Ratio: Defined as the ratio of impact score to the average of capability and activity scores. This measure indicates the private sector’s ability to translate its investments and activities in innovation to successful outcomes.

Figure 3: Private Sector View Framework


PRIVATE SECTOR OUTPUT RATIO

CAPACITY

Capacity measures(Specific questions tagged in survey)

Impact measures(Specific questions tagged in surveyy)

IMPACT

• Strategy, Leadership & Culture

• Management of Innovation

• Organization enablers

• Collaboration

• Skills & talent

ACTIVITY

ACTIVITY MEASURESActivity measures(Specific questions tagged in survey)

• Accessing new ideas

• Implementing new ideas

Intangible Output

• Intellectual Capital

• Creation of Culture

• Collaboration

Tangible Output

• New Products & Services

• Growth & Revenue Generation

• Technology Readiness

11

GLOBAL CITIES ANALYSIS02


2.1 GLOBAL CITIES RANKINGS

The Dubai Innovation Index macroeconomic city-level analysis measures innovation at a global scale across the leading innovative cities of the world.

City 2017 Rank

2016rank

2015 rank

Hong Kong 1 3 2

New York 2 1 5

London 3 4 1

Singapore 4 6 3

Seoul 5 8 4

Tokyo 6 5 6

Stockholm 7 7 7

Copenhagen 8 10 9

Zurich 9 9 8

San Francisco 10 11 13

Paris 11 2 10

Toronto 12 13 11

Sydney 13 14 12

Dubai 14 15 16

Berlin 15 12 14

Warsaw* 16 _ N/A _ N/A

Tallinn* 17 _ N/A _ N/A

Madrid 18 16 21

Shanghai 19 19 17

Kuala Lumpur 20 20 15

Beijing 21 21 18

Doha 22 18 19

Moscow 23 23 23

Riyadh 24 17 20

Milan 25 22 25

Mexico City 26 24 24

Johannesburg 27 25 27

Bangalore 28 28 _ N/A

Sao Paulo 29 26 26

Nairobi 30 27 _ N/A

Table 1: Global City Rankings

* City added in 2017

13

2. GLOBAL CITIES ANALYSIS continued

This year, Hong Kong is ranked first in the DII study, moving up two places from last year followed by New York (rank 2) and London (rank 3). Singapore (rank 4) and Seoul (rank 5) re-entered the top 5 category in 2017, after a decline in 2016.

The need for developing skills and talent, and the impact it has on the ecosystem is evident when analysing the top 5 ranked cities. Hong Kong, London and New York, are looking to empower their innovation ecosystem by building their talent pool: London is putting in place a new skills agenda that ensures all citizens have the opportunity to train in the skills that capital’s economy needs, by investing £114m in education colleges and training providers. While New York is focusing on growing its businesses by empowering and diversifying its workforce and Hong Kong has initiated the University-Industry Collaboration Program which aims to boost the private sector interest in R&D in collaboration with local universities.

This year, there has been an uncertainty in the global, political and economic environment: the United States Presidential Election 2016, the impact of Brexit, unemployment crisis in South America and the continuous economic volatility due to decrease in oil prices. Economic slowdown might have had an impact on innovation in cities, where the focus on investing in new capital by developing country has affected the rate of innovation. These factors might have contributed in creating a backlash against globalization and the focus on investing in innovation. However, some countries were not impacted by the economic slowdown which helped them boost their rankings in innovation (e.g. Scandinavian, Australian and South-East Asian countries).

In spite of these instabilities, Dubai and San Francisco are the only two cities that have witnessed a consistent increase in their rankings from 2015 to 2017. This innovation stability is backed by the government being an advocate of innovation: whether in supporting the SMEs and the private sector or in innovating internally within ministries and public entities. There has also been a focus on promoting entrepreneurship, through business accelerator programs and incubators, where San Francisco is world renowned for its entrepreneurial culture and Dubai has increased its efforts: a $275 million fund is set aside, by the Dubai Future foundation, to invest in start-ups.

Hong Kong is ranked number one in the overall Dubai Innovation Index 2017, replacing New York from 2016. The reasoning behind this is the Hong Kong government helped by investing in initiatives regarding the improvement of the innovation ecosystem in the city.

THIS YEAR, THE GOVERNMENT OF HONG KONG INVESTED $18 BILLION TO PROMOTE RE-INDUSTRIALISATION AND FUND UNIVERSITIES RESEARCH PROJECTS. THIS INVESTMENT WAS FOLLOWED BY AN ASSESSMENT OF THE UNIVERSITIES, BASED ON THEIR RESEARCH IMPACT, KNOWLEDGE EFFECTIVENESS AND TECHNOLOGY TRANSFER.

LOCAL UNIVERSITIES ALSO LAUNCHED DEDICATED PUBLICLY FUNDED PROGRAMMES AT THE START OF THIS ACADEMIC YEAR TO HELP IN BUILDING THE TALENT POOL AND IMPROVE THE QUALITY OF HIGHER EDUCATION IN HONG KONG.


2017 2016 2015

New York and San Francisco are renowned hubs for innovation. Both cities have been focusing on integrating technology within innovation. New York has set initiatives to create technology focused opportunities and jobs for its citizens. One such initiative is the virtual and augmented reality (VR/AR) lab within New York University that is expected to create over 500 jobs over the next 10 years. San Francisco has also been fostering collaborations between innovators and big organizations to help the people discover new technologies. Despite all their efforts to remain at the forefront of innovation, they have witnessed challenges this year concerning the political, economic and social environment. The election in the US that took place at the end of last year has lead to political and economic instability that affected the innovation ecosystem – in fact, New York’s PES rank dropped 6 places from 2016 to 2017, placing it in the 18th position.

2017 2016 2015

Most European cities have witnessed a drop in their ranking this year, contrary to their rise from 2015 to 2016. One of the challenges lies in the funding for the development of skills and talent. This could be due to the impact of Brexit on London’s higher education system and their workforce, as it will become a challenge for skilled Europeans to attain the appropriate permits to reside in the UK. Another possible drawback that most European cities face is the lack of public financing. The market is not particularly mature for financing scale-ups (start-ups that have matured), which means that companies do not have access to the right funding once they reach a certain maturity level.

NORTH AMERICA EUROPE

2.1.2 REGIONAL TRENDS

Looking at the regional trends, we see that the majority of cities in North America and Asia Pacific have improved in their innovation performance, while most of those in Middle East and Europe have witnessed a decrease in their innovation score.

15

2017 2016 2015

Among all the cities in the Middle East, only Dubai has moved up in its position in the DII 2017 ranking. Riyadh and Doha noticeably dropped in its ranking from 2016 to 2017. This is largely due to the low economic growth that limits the gains in fiscal revenue and in turn restricting government expenditure capacity and its willingness to invest in innovation. The lack of intangible outcomes has contributed to this drop, where there is limited focus on intellectual capital (e.g. patents and trademarks) and minimal collaborations between the private and public sector and with global cities.

The governments in each of the 3 cities are aware of the importance of education and have been putting policies and initiatives in place to encourage the same: Saudi education minister is making transformational changes in the education sector, including the digitization of all the text books and sending 1,700 Saudi teachers each year to world-class schools in places like Finland to further develop their skills.

2017 2016 2015

Despite the decline in ranking for Asia Pacific cities between 2015 and 2016, they have seen significant improvement this year. The major focus of these cities is creating the innovation infrastructure. The government in Hong Kong is substantially investing to improve the city’s technology ecosystem; for example, $18 billion was invested to promote reindustrialisation, fund universities research projects and support start-ups. Tokyo is also putting efforts in the technological infrastructure. Tokyo’s government is setting initiatives that help the development and establishment of businesses. For instance, this year Tokyo Metropolitan Government launched an initiative named “the Accelerator Program – FinTech Business Camp Tokyo” to attract foreign companies that employ advanced technologies and business models.

MIDDLE EAST ASIA PACIFIC

Key Insights

• Political instability has been a barrier for the development of innovation around the world

• Collaboration and globalization are key drivers for the growth of innovation

• Governments across the cities are aware of the importance of innovation and are taking actions to foster it



2.1.3 INNOVATION OUTPUT RATIO

The innovation output ratio itself doesn’t show whether a city is performing well or not in its innovation enablers and performance, but rather focuses on the “return on investment” of innovation.

City ‘17 Output RatioRank

’17 Enabler score

’17 Performance Score

’17 Output Ratio score

Trend ‘16 Output Ratio Rank

Trend ‘15 Output Ratio Rank

Tokyo 1 48.54 54.17 1.12 1 4

Shanghai 1 33.45 37.62 1.12 2 1

Beijing 3 33.21 35.22 1.06 3 2

Seoul 4 54.92 48.5 0.88 6 5

New York 6 58.95 48.48 0.82 8 7

London 7 62.37 41.16 0.66 9 6

San Francisco 8 51.83 33.94 0.65 16 21

Bangalore 8 24.45 15.97 0.65 11 _ N/A

Singapore 10 62.89 40.56 0.64 12 15

Warsaw 10 48.87 31.28 0.64 _ N/A _ N/A

Zurich 12 54 33.95 0.63 15 16

Kuala Lumpur 12 43.49 27.4 0.63 19 9

Stockholm 14 57.79 34.77 0.6 10 18

Dubai 15 51.67 29.94 0.58 14 11

Paris 16 53.56 30.32 0.57 5 13

Nairobi 16 24.76 14.15 0.57 4 _ N/A

Copenhagen 18 57.36 32.08 0.56 22 20

Moscow 18 41.68 23.53 0.56 26 14

Doha 20 43.83 23.93 0.55 13 26

Toronto 21 54.16 28.9 0.53 17 19

Sydney 21 53.27 28.4 0.53 18 24

Berlin 23 53.62 27.8 0.52 25 25

Mexico City 24 38.25 19.69 0.51 21 23

Sao Paulo 24 26.37 13.33 0.51 23 3

Tallinn 26 52.9 26.4 0.5 _ N/A _ N/A

Riyadh 27 43.81 20.34 0.46 20 17

Madrid 28 50.17 22.22 0.44 28 27

Milan 29 41.68 17.64 0.42 27 28

Johannesburg 30 29.09 12.3 0.42 24 22

Table 2: Innovation Output Ratio

17

The results show that the output ratio is not in direct correlation with the overall innovation performance of a city i.e. Hong Kong, ranking 1st in the overall innovation score is 5th on output ratio, while Beijing is 21st overall yet 5th on the innovation output ratio end.

Shanghai and Tokyo (for the second consecutive year) claim the first position with an output ratio of 1.12. In fact, China and Japan have witnessed a stronger-than-expected economic growth in 2017.

It is notable that the top 5 cities in innovation output ratio are the Asia Pacific cities. This is attributed to the economic growth in the region. Based on the Asian Development Bank, economic growth prospects in Asia are going up bolstered by a revival in world trade and strong momentum in China.

Shanghai, tops the innovation output ratio index, but ranks second on the development of New Products and Services. This shows that the city is at the stage of translating the investments on innovation enablers, supported by talent, research, government support, into real products and services that are generating revenues. Shanghai is now becoming a leading global innovation hub, demonstrating the capability to create platforms, develop disruptive technologies and turn business models upside down.

Tokyo’s innovation output ratio comes from high performing innovation enablers, and higher innovation performance. The city is known to have world leading tech companies and manufacturers and is integrating innovation in all industries (fashion, transportation, production of electronics, manufacturing).

Although Bangalore’s innovation output ratio is relatively high with respect to its overall innovation rank, it has a low enabler score mainly due to the low score in political and economic instability as well as the social environment in the city. Despite that, the city is successfully seeing the impact of its investment on innovation on the output level, particularly in developing new products and services. In fact, Bangalore is the technology hub of India, also know as “India’s Silicon Valley” - it attracts highly skilled individuals, mainly in IT, for a lower cost of labour, which is attracting global tech giants to establish in the city. This explains the high output ratio with relatively low innovation rank.

The most significant drop in rankings was witnessed by Nairobi, going down 12 positions from 2016. Despite Kenya’s growth and status as East Africa’s largest economy, the city has one of the highest youth unemployment rate. According to a World Bank report, despite Kenya’s increasing levels of education, the majority of the jobs in the city don’t use skills beyond basic numeracy. These factors influence Nairobi’s innovation ecosystem.



2.1.4 INNOVATION LEADERS

Hong Kong leads the Innovation Index 2017. The main improvement is visible on the Intangible Output end, where the city moved up 6 positions since 2016, to the 3rd rank. The city has the highest collaboration rate, mainly due to the large number of Joint Venture and Strategic Alliance deals.

As one of the initiatives to reinforce collaboration, the Research and Development (R&D) Cash Rebate Scheme aims to reinforce the research culture among business enterprises and encourage them to establish stronger partnership with designated local public research institutions. Under this scheme, companies will receive a cash rebate equivalent to 40% of its expenditure in R&D projects.

The Hong Kong Education Bureau is promoting STEM education (science, technology, engineering and mathematics) to nurture a versatile pool of talents with different sets and levels of skills to enhance the competitiveness of Hong Kong. The bureau is endorsing this system by reviewing STEM curricula, enriching the learning activities for students, providing learning and teaching resources, enhancing professional development of schools and teachers, strengthening partnerships with community stakeholders and maintaining professional communities.

Innovation Score:

55.29Innovation Rank:

1Enablers Rank:

3

Output Ratio Score:

0.84Output Ratio Rank:

5PES Environment:

9Skills and Talent:

10

Infrastructure:

3

Performance Rank:

2Tangible Outcome:

2Intangible Outcome:

3

Government:

2Funding:

2Culture:

25

19

New York has moved down by 1 position since last year; however, it remains the top city in its innovation infrastructure, particularly in ICT. New York also stands out for the commitment of the national banks to fund innovation, particularly by facilitating for entrepreneurs the process of getting credit from financial institutes. On the performers end, New York successfully ranked first in tangible outcome, mainly due to its substantial growth, high revenue generation from innovation and the cultural and creative services exports.

An initiative that has contributed to the success of the city is the virtual and augmented reality (VR/AR) lab within the New York University's Tandon School of Engineering, that was launched to create technology focused opportunities.

An investment of $6 million was made by New York City Economic Development Corporation and the Mayor’s Office of Media and Entertainment to develop and operate a hub for virtual and augmented reality.

Innovation Score:


2Enablers Rank:

4

Output Ratio Score:


6PES Environment:

18Skills and Talent:

22

Infrastructure:

1

Performance Rank:

4Tangible Outcome:


6

Government:

10Funding:

1Culture:

12



London has moved down by 1 position since last year; however, it remains the second best city in its innovation infrastructure, due to its environmental stability. It stands out for the large number of students enrolled for higher education and the number of private investments in innovation activities. As for the city's performance, London successfully remained in the top 5 cities in their intangible outcomes, as it ranked second in collaboration because of the relatively high number of joint-venture and strategic alliances that were formed in addition to the many scientific and technical articles published this year.

This year, there was a particular focus on growing CleanTech businesses, as the government is investing more in low-carbon industries that reduce the negative impact on the environment.

The government in London is investing £114m in education colleges and training providers as part of its plan to put in place a new skills agenda that ensures all citizens have the opportunity to build upon the skills that capitalize economic needs.

Innovation Score:


1Enablers Rank:

3

Output Ratio Score:


5PES Environment:

9Skills and Talent:

10

Infrastructure:

3

Performance Rank:

2Tangible Outcome:


3

Government:

2Funding:

2Culture:

25

21

Innovation enablers measure the degree to which a city is creating an environment favourable for innovation and is allowing innovation to thrive.

Singapore has ranked 1st in its enabler score, moving up 3 positions since 2016, followed by London, Hong Kong and New York.

One underlying similarity between these top cities is that they are all multi-national cities that attract students from across the world to pursue their education.

Based on the Programme for International Students Assessment (PSIA) – released by OECD – Singapore topped the list, followed by Hong Kong, South Korea and Japan. The report highlights the relation between education and economic growth.

On another note, most cities have witnessed a decrease in their enabler ranking. The investment on innovation has been impeded with the economic slowdown, where most cities are now facing budget deficits.

2.2 INNOVATION ENABLERS

City 2017 Enabler Rank

Trend 2016 Enabler Rank


Singapore 1 4 3

London 2 2 1

Hong Kong 3 3 2

New York 4 1 4

Stockholm 5 7 5

Copenhagen 6 6 6

Seoul 7 13 7

Toronto 8 12 10

Zurich 9 8 8

Berlin 10 9 12

Paris 11 5 13

Sydney 12 11 9

Tallinn 13 _ - _ -


Dubai 15 16 16

Madrid 16 15 15

Warsaw 17 _ - _ -

Tokyo 18 14 11

Doha 19 20 18

Riyadh 20 17 19


Moscow 22 21 22

Milan 23 19 20


Shanghai 25 23 24

Beijing 26 24 25


Sao Paulo 28 26 27

Nairobi 29 28 _ -

Bangalore 30 27 _ -

Table 3: Innovation Enablers Ranking, 2015-2017



Enablers

Singapore is the leading city in Political, Economic and Social Environment pillar (PES), where the political stability, economic growth and government effectiveness contribute to this success. Singapore is also one of the top 5 cities in social environment, in terms of human development levels.

GOVERNMENT OF SINGAPORE HAS LAUNCHED THE SKILLS FUTURE INITIATIVE WHICH AIMS TO PROVIDE CITIZENS WITH OPPORTUNITIES TO DEVELOP TO THEIR FULLEST POTENTIAL BY FOCUSING ON TRAINING EMPLOYEES WITH RECENT TECHNOLOGICAL SKILLSETS AND IMPROVING EMPLOYMENT OPPORTUNITIES FOR INDIVIDUAL WORKERS.

Singapore

Political Economic and Social

Political Environment

99.10Economic

Growth

72.23Social

Environment

72.03

Enablers

New York remains at the top in the development of its infrastructure for the second year in a row. This can be due to the substantial investments in importing technologies to the city.

AN INVESTMENT OF $6 MILLION WAS MADE BY NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION AND THE MAYOR’S OFFICE OF MEDIA AND ENTERTAINMENT TO DEVELOP AND OPERATE A HUB FOR VIRTUAL AND AUGMENTED REALITY.

New York

Innovation Infrastructure

Institutions

50.97ICT

61.14Environmental

Stability

62.14

23

Enablers

Stockholm maintains its first place rank for the third year in a row. The policies to ease the process of starting a business and the available support for start-ups, has helped contribute to this success.

THIS YEAR, STOCKHOLM STARTUP WEEKEND WAS ORGANIZED TO EMPOWER ENTREPRENEURS WHO ARE IN THE PROCESS OF LAUNCHING SUCCESSFUL VENTURES. THIS EVENT FOSTERED COLLABORATION BETWEEN ENTREPRENEURS WHO PITCHED THEIR INNOVATIVE IDEAS, AND ATTENDEES WHO PROVIDED THEIR FEEDBACK.

Stockholm

Culture

Entrepreneurial

90.23Incentives

60.86

Enabler

Singapore managed to remain in the first place for the third year in a row. This could be due to the quality of regulations and their effective enforcement by the city’s authorities.

Singapore also ranks first in business environment, due the ease of starting a business, the limited costs incurred during the process and the governmental support to build start-ups.

STARTUP SG IS AN INITIATIVE LAUNCHED BY THE GOVERNMENT OF SINGAPORE TO SUPPORT FIRST-TIME ENTREPRENEURS IN TALENT DEVELOPMENT AND INCENTIVISE EQUITY CO-INVESTMENT FOR START-UPS.

Singapore

Government


Policies

93.17Regulation

100.00Business

Environment

97.29


Enablers

Moscow ranks first in Skills & Talent, this is mainly attributed to the quality of primary and secondary education.

THE RUSSIAN GOVERNMENT IS SEEKING TO ENHANCE THE GLOBAL RANKING OF ITS UNIVERSITIES BY 2020 BY ATTRACTING INTERNATIONAL STUDENTS FROM AROUND THE WORLD AND SENDING SCHOLARS ABROAD AND ENCOURAGE THEM TO RETURN TO THE COUNTRY. MOSCOW IS ALSO ONE OF THE CITIES WITH THE HIGHEST NUMBER OF LIBRARIES.

Moscow

Skills & Talent

Education

73.73Higher

Education

60.34

Enablers

New York maintains its ranking in the first place for the third year in a row, this could be due to the substantial amount of credit that private sector receives. New York is also one of the top 3 cities in private investments, making the city a tech hub and an advantageous place for start-ups.

FOR EXAMPLE, THE INNOVATE NY FUND IS A VENTURE CAPITAL FUND INVESTED IN SEED STAGE BUSINESSES TO SUPPORT INNOVATION, JOB CREATION AND HIGH GROWTH ACROSS THE STATE. THIS FUND INCLUDES BOTH NY STATE AND PRIVATE INVESTMENTS SUPPORT.

New York

Funding

Public

46.22Private

Investment

53.12Banking

91.09

25

Innovation Performance measures the tangible and intangible outputs of innovation in cities such as the development of talent, intellectual capital and collaborative partnerships for innovation.

For the second consecutive year, Tokyo ranks 1st in innovation performance. Looking at the city’s innovation enablers performance (rank 18), we see that the city has been focusing less on investing on innovation and more on the output of innovation. It has established a strong innovation infrastructure and is now at the advance stage of seeing the returns of that.

We can also see that most of the cities that dropped in their enablers score also dropped in their innovation performance score, highlighting that to building a strong basis for innovation is key to see the impact of innovation.

2.3 INNOVATION PERFORMANCE

City 2017 Enabler Rank



Tokyo 1 1 3

Hong Kong 2 4 5

Seoul 3 6 2

New York 4 3 4

London 5 5 1

Singapore 6 7 6

Shanghai 7 10 7

Beijing 8 14 8

Stockholm 9 8 11

Zurich 10 9 10


Copenhagen 12 11 13

Warsaw 13 _ - _ -

Paris 14 2 9

Dubai 15 17 15

Toronto 16 13 14

Sydney 17 15 17

Berlin 18 16 19


Tallinn 20 _ - _ -

Doha 21 18 23

Moscow 22 24 20

Madrid 23 21 25

Riyadh 24 19 21


Milan 26 22 28

Bangalore 27 28 _ -

Nairobi 28 25 _ -

Sao Paulo 29 26 22


Table 4: Innovation Performance Rank, 2015-2017



Enablers

New York witnessed the highest tangible outputs. The city’s creative outputs including creative services exports, global entertainment and media output has contributed to this success. This could also be due to growth in revenues from its total value of stocks traded and market capitalization.

THE MAYOR’S OFFICE OF MEDIA AND ENTERTAINMENT PROMOTES NEW YORK CITY AS A THRIVING CENTER OF CREATIVITY BY ISSUING PERMITS FOR FILMING PRODUCTIONS ON PUBLIC PROPERTY AND HELP FACILITATE THIS PROCESS.

New York

Tangible Outcomes

Enablers

Tokyo ranks first in intangible outputs, as the city has the greatest number of knowledge-intensive jobs and number of researchers who are engaged in the creation of new products. It also has the highest capacity to introduce new products and had issued the most number of patents this year.

TOKYO HOSTED THE BIO ASIA INTERNATIONAL CONFERENCE THIS YEAR, WHICH BROUGHT TOGETHER US AND EUROPEAN DRUG DEVELOPMENT COMPANIES INTERESTED IN RESEARCH COLLABORATIONS AND LICENSING AGREEMENTS. THE ATTENDEES WERE MAINLY MEDICAL TECHNOLOGY COMPANIES, UNIVERSITIES AND INSTITUTES, INTELLECTUAL PROPERTY FIRMS, LEGAL ORGANIZATIONS, GOVERNMENT AND PUBLIC SUPPORT AGENCIES.

Tokyo

Intangible Outcomes

Growth & Revenue Generation

75.34Technology Readiness

51.43Creative Output

60.94New Products and Services

43.26

Intellectual Capital

84.03Talent & Culture

76.85Collaboration

35.21

27

CITY LEVEL ANALYSIS - DUBAI03


3.1 MACRO OVERVIEW

For the 3rd consecutive year, Dubai has witnessed an increase in its ranking, climbing up to the 14th position out of 30 cities this year.

We have seen that cities facing economic challenges and weaknesses in economic growth tend to drop on the innovation end. Dubai on the other hand, relies on innovation to strengthen its economy and create sustainable growth, thereby diversifying due to high volatilities from oil revenues. A great emphasis has been made by the leadership to encourage innovation to achieve economic development and this has been targeted in the UAE Vision 2021.

Key Insights

• Dubai is putting significant efforts in creating an innovation enabling ecosystem

• The government in Dubai is setting long term strategies and launching various initiatives to empower innovation

• There is a lack in collaboration and strategic alliances between Dubai and other parties to link technologies and leverage global expertise.

Table 5: Macro Overview Rank, 2015-2017

Enablers 2017 Rank

2016rank

2015 rank

PES 2 13 17

Government 12 14 12

Skills & Talent 14 24 22

Funding 14 13 17

Infrastructure 27 23 25

Culture 14 11 12

Performance 2017 Rank

2016rank

2015 rank

Tangible Outcome

11 13 12

Intangible Outcome

19 20 16

Dubai Innovation IndexScore:

Rank: 14

Innovation Output RatioScore: 0.58

Rank: 15

29

3. CITY LEVEL ANALYSIS - DUBAI continued 3.2

INNOVATION ENABLERSIn line with Dubai’s aspiration to become a leading global innovation hub, Dubai’s score on each enabler pillar and sub-pillar was compared to the global best performers, to have a clear view on its current position and the requirements for it to achieve its goal.

Innovation Enablers

Pillar 2017 Rank

Trend 2016 rank

Trend 2015 rank

2017 Score

Innovation Enablers 15 16 16 51.67

Table 6: Dubai’s Innovation Enablers Rank, 2015-2017

Political Economic and Social Environment

Infrastructure

• Dubai

• Global Leader

100.00

50.00

0.00 PoliciesBusiness

Environment

Regulations

Government

Singapore

Singapore

Singapore

Singapore

Government

• Dubai

• Global Leader

100.00

50.00

0.00 ICTEnvironmental

Stability

Institutions

Infrastructure

Tallin

London

New York

Zurich

• Dubai

• Global Leader

100.00

50.00

0.00 Political Environment

Social Environment

Economic Growth

PES

Tallin

Singapore

Singapore

Dubai


• Dubai

• Global Leader

100.00

50.00

0.00

EducationHigher

Education

Skills and Talent

Moscow

Moscow

Seoul

• Dubai

• Global Leader

100.00

50.00

0.00

Entrepreneurial Culture

Incentives

Culture

New York & San Francisco

Stockholm

Tallin

• Dubai

• Global Leader

100.00

50.00

0.00 PublicBanking

Private Investments

Funding

London

Riyadh

New York

New York

Skills and Talent

Funding

Culture

31

Dubai’s innovation enabler rank has improved from 16 in 2015 and 2016, to 15th this year. The government is aware of the importance of creating sustainable innovation through constantly developing the enablers of innovation and growing the ecosystem.

Dubai has witnessed a radical increase in its Political, Economic and Social Environment (PES), mainly on the social perspective that includes happiness, human development and population demographics. Dubai ranks 1st on social environment due to its large young population.

The city is rich with a strong workforce that is at the basis of innovation. This comes in line with the improvement of skills and talent in Dubai, with a focus on education (score increased from 31.92 in 2016 to 49.23 in 2017). As part of the country’s sustainable development goals, education has been a top government priority. To this end, the government allocated 21.2% of its 2016 federal budget on the education sector, and launched numerous initiatives to attract competent and accredited teachers, strengthen the professional development of teachers, develop smart learning programs and revamp the education curricula in purpose to provide the highest level of modern education in terms of curriculum, technology and environment. The UAE Ministry of Education developed Education 2020, a plan designed to generate significant improvements in how teachers deliver their curriculum and how students learn. The market of private schools in the city is one of the largest in the world, amounting to up to $1.5 bn and includes curriculum from across the world (e.g. British, American, Indian and German). According to an article by Forbes ME, eight institutions have recently opened in the UAE, and other international schools have announced to plans to open campuses in Dubai. This has made the education sector an attractive market for both local and international private equity funds, acquiring stakes in local school operators. With the introduction of VAT in the Emirates, primary education, nursery and higher university education provided by government institutions are subject to a 0% tax, including transport services and books.

Social stability and highly skilled youth must be accompanied by several factors in order to create an efficient and sustainable innovation ecosystem. Dubai’s political environment and its highly effective government has been a main driver to attract entrepreneurs to the city, supported by a regulatory framework that is being updated to address the needs of entrepreneurs and government funding initiatives to financially support entrepreneurs to grow their ideas.

Although banks and private funding have not risen in rank in 2017, public funding is a key strength of Dubai, putting it in the 3rd position. Public funding measures the extent and prevalence of government financial support that is put to develop new businesses. This year, the public sector has launched various initiatives to support SMEs and start-ups in providing access to funding. One such example is the crowdfunding platforms launched by DFSA to provide finance solutions to SMEs. Sustainable funding is also a government’s focus, where they have recently launched the “Hamdan Centre for the Future of Investment” which aims to promote contribution of FDIs to sustainable development.

Dubai’s innovation infrastructure remains a challenge, highlighted by the lack of spending and importing ICT goods and lack of focus on research and development. On the other hand, New York holds the first position in Innovation Infrastructure for the second year in a row. In fact, it was awarded “Best Smart City of 2016” where it was recognised for its efforts to build a smart and equitable city, led by the Mayor’s Office of Technology and Innovation. This office is working to make New York City “the most innovative, tech friendly and equitable city in the world”. It provides diverse services to citizens around innovation and technology, such as connecting organizations to talents, enhancing technology, and ensuring universal connectivity.

Another area that the city is not putting extensive focus on is environmental stability. As an oil-dependent economy, and with the long-time industry crisis, Dubai must grasp the opportunity to invest in renewable energy and environmental sustainability, away from oil dependency.

3. CITY LEVEL ANALYSIS - DUBAI continued


3.3 INNOVATION PERFORMANCE

Similarly to the Innovation Enablers, the performance pillars were also compared to the global best performers. Dubai’s innovation performance has moved back up to 15th position, after a drop between 2016 and 2015.

Innovation Performance

Pillar 2017 Rank

Trend 2016 rank

Trend 2015 rank

2017 Score

Innovation Enablers 15 17 15 29.94

Table 13: Dubai’s Innovation Performance Rank, 2015-2017

• Dubai

• Global Leader

100.00

50.00

0.00

New Products and Services

Growth and Revenue Generation

Technology Readiness

Creative Output

Tangible Outcome

Bangalore

Hong Kong

New York

New York

New York

• Dubai

• Global Leader

100.00

50.00

0.00 Intellectual Capital

Collaboration

Talent and Culture

Intangible Outcome

Tokyo

Tokyo

Tokyo

Hong Kong

Tangible Outcome

Intangible Outcome

33

Dubai’s improvement in innovation performance is largely due to the city’s strength in talent and culture. Looking into the tangible outcomes, the city is witnessing a recognizable improvement in developing new products and services and is enabling itself to become technologically ready. With a strongly enabled ecosystem, lead by a highly competent workforce, a sustainable economy, support from the government and a prosperous social environment, global businesses are attracted to establish in the UAE and more specifically in Dubai, to have a presence in the region. The government is concentrating on developing e-services, as digital technology is transforming Dubai for businesses and for the people. This has helped the city to build a reputation for itself as an economic and investment centre and an unmatched business environment in the region.

The intangible outcomes, on the other end, have dropped in rank since 2016. The main challenge lies in the intellectual capital end, where there is a minimal focus on developing patent and trademarks in the city. In order to encourage such activities, the government must pave the way for a clear process that makes it clear and simple to apply for a patent, drives research and development and attracts the proficient human capital to drive this agenda. Despite the drop in rank in the Talent and Culture pillar, it remains one of the globally best performing subcategory, driven by the large labour force participation and the presence of knowledge intensive jobs in the city. In fact, Dubai is a highly connected and digitally literate society that attracts particularly skilled employees.

Hence, the focus of Dubai in empowering its Human Capital and investing in developing a highly skilled labour force has played a major role in driving the city’s innovation journey. An inclusive and collaborative approach, embracing technological breakthroughs is being adopted, to ensure sustainable growth and a successful execution of all investment put on innovation.

3. CITY LEVEL ANALYSIS - DUBAI continued


PRIVATE SECTOR ANALYSIS - DUBAI04


4.1 SURVEY RESPONSES

The private sector survey was sent out to a large number of organizations in Dubai, from different industries, covering different company sizes (in both revenues and number of employees). The survey provides a thorough view on the present state and the outlook of innovation in a city. This bottom-up approach, combined with the macroeconomic top-down approach, provides a complete perspective on innovation in a city.

RESPONSES BY INDUSTRIES

RESPONSES BY NUMBER OF EMPLOYEES PER FIRM

41%35% 4%16% 4%

21 – 100 Employees

20 Employees



1000+ Employees

RESPONSES BY FIRM SIZE

47%34% 2%17%

10 – 100 Million AED

< 10 Million AED

> 1 Billion AED

100 Million – 1 Billion AED

Agriculture, Fishing & Forestries 1% Construction & Real

Estate 9%Education, Training &

Research 1%

Energy & Utilities (oil & gas, electricity, water) 6%

Food & Beverage, Hospitality & Leisure, Entertainment 3%

Healthcare 1%

ICT 4%

Manufacturing 12%

Media & Marketing 2%

Professional Services 20%

Transport & Logistics 9%

Wholesale & Retail Trade 34%

Figure 4: Private Sector Survey Responses

Number of Respondents:

2007 responses

Mode of Outreach:

Online & Phone Survey

Survey Respondents:

Dubai Private Sector Firms

37

4. PRIVATE SECTOR ANALYSIS - DUBAI continued 4.2

PRIVATE SECTOR INNOVATION PERFORMANCE OVERVIEW

The survey results show that the private sector has successfully maintained its continuous growth in the Private Sector Innovation Score, increasing by 1.2% from 2016 to 2017, following a 6% increase in the previous year.

Similarly to the city level analysis, the private sector has also witnessed a significant increase in the Skills and Talent pillar, further emphasizing the importance of developing human capital to encourage innovation throughout all the sectors.

Pillar 2017 2016 2015

Enabler 65.75 61.82 56.34

Capability 61.75 62.27 53.96

Organization Enabler 51.90 63.06 48.29

Strategy, Leadership & Culture 54.43 59.24 51.11

Management of Innovation 70.62 63.01 65.15

Skills and Talent 70.04 51.77 44.83

Activity 69.76 61.40 58.72

Accessing New Ideas 67.21 69.19 62.3

Implementing new ideas 72.32 53.56 46.68

Table 17: Private Sector Enabler Detailed Score, 2015-2017

Pillar 2017 2016 2015

Impact 53.06 58.73 58.62

Impact - Tangible 51.57 60.05 57.79

Growth & Revenue Generation 40.84 48.82 43.79

New Products & Services 56.08 64.17 59.35

Technology Readiness 57.79 67.16 70.22

Impact - Intangible 54.54 57.40 59.45

Intellectual Capital 32.28 29.26 31.30

Collaboration 59.64 63.42 69.82

Talent & Culture 71.71 79.52 77.22

Table 18: Private Sector Impact Detailed Score, 2015-2017

Table 16: Overall Private Sector Innovation Score, 2015-2017

57.10

2015

60.79

2016

61.52

2017

6.4%ä

Change

1.2%ä

Change

OVERALL PRIVATE SECTOR INNOVATION SCORE


2017 Top 33% 2017 Bottom 33%

Overall Score 68.20 50.60

Capability

Organization Enabler 57.30 44.16

Strategy, Leadership and Culture 60.77 47.89

Management of Innovation 77.59 65.00

Collaboration 71.01 47.92

Skills and Talent 76.55 65.25

Activity

Implementing New Ideas 78.42 67.72

Accessing New Ideas 75.16 63.02

Table 19: Overall Private Sector Bottom 33% and Top 33% Detailed Score

The score for the private sector has been constantly improving since 2015 as organizations are putting more efforts to stay on top of innovation breakthroughs and are carrying out initiatives to ensure their innovation readiness.

Despite this improvement, the percentage increase this year in innovation performance (1.2%) is less significant than last year (6%). In fact, Dubai’s economy is based on trading: adopting ideas from abroad and implementing them in the local market, rather than developing innovative ideas locally v/s in-house. With the market large enough to accommodate businesses of all sizes, there is little aspiration for private organizations’ leaders to invest in research and development and in developing new products and services. Despite the government’s elaborative efforts to spur innovation, they haven’t been able to elaborate effectively with the private sector, therefore creating a gap in the innovation ecosystem.

“THE GOVERNMENT INNOVATES BECAUSE IT REALIZES THAT THE ENVIRONMENT IS CONSTANTLY EVOLVING AND RECOGNIZES THE NEED FOR INNOVATION, THE PRIVATE SECTOR DOESN’T SEE THIS UNTIL THERE IS A THREAT”

Mr. Shehab Al Gargash

39

City wide alignment The government in Dubai is focusing on enabling innovation, while the private sector is still finding it difficult to comprehend its importance. The efforts made by the public sector, such as accelerators, innovation hubs and funds, are not in collaboration with the wider community of private organizations. In the UAE, the government is expected to lead the path of innovation, by encouraging public and private collaboration.

4. PRIVATE SECTOR ANALYSIS - DUBAI continued

We differentiated the firms as follows: 33% of the overall firms with the highest impact score and 33% of those with the lowest impact scores. This gives us an insight as what top companies are doing right and focusing on vs. what the bottom tier is lagging on.

The improvement in the Private Sector Innovation Score could be due to the increase in investment in innovation enablers (capability and activity): the expansion in new businesses in Dubai has contributed to the improvement of business conditions, explaining the increase in innovation enablers across private organizations. The lack of R&D and collaboration between different stakeholders has resulted in a decrease in organization enablers, and strategy, leadership and culture scores. The lack of spending on R&D can be explained by the cutting down of costs due to the economic slowdown.

On the other hand, there was an improvement in skills and talent, management of innovation, accessing and implementing new ideas: private organizations have been putting a strong emphasis on finding highly skilled employees and retaining talent, as people are the main drivers of innovation. In fact, the score in Skills and Talent has improved the most from this year and even from 2015 to 2017, increasing by 41% and 63% respectively.

The contrast between development of those pillars, and drop in R&D and collaboration can be explained by the fact that in response to the high competition in the private sector, organizations are focusing on bringing in talent to bring new ideas to the market rather than spend time and invest on developing their own products and services.

Impact scores this year have dropped on all pillars, with a 10% decrease. Organizations do not project a large percentage of their growth to stem from innovation. There are not enough efforts put in place to improve the business model and encourage internal innovation. Minimal intellectual property patents show the lack of efforts put in R&D, and testing and developing new ideas. One way to explain this is the fact that the talent found in Dubai are mostly expats, who would rather go back to their countries to develop their innovations. This is an opportunity for the government to invest in its own people and empower local universities, and for the private sector to hire local employees and further develop their people.

INNOVATION IS A LONG TERM INVESTMENT AND BOTH TANGIBLE AND INTANGIBLE OUTCOME CANNOT BE SEEN WITHIN A FEW YEARS.

THE UPCOMING GLOBAL EVENT EXPO 2020 SERVES AS A CATALYST TO PROMOTE GROWTH IN THE PRIVATE SECTOR. IN FACT, PRIVATE ORGANIZATIONS ARE EXPECTING AN ECONOMIC UPTURN THAT UNDERPINS BUSINESS CONFIDENCE. THE EVENT WILL ENABLE COLLABORATION AMONG STAKEHOLDERS, DUE TO THE SUBSTANTIAL GLOBAL EXPOSURE FROM THIS EVENT.

92%

of Private Sector Organizations see that

developing the right business strategy that supports and

encourages innovative thinking will improve the

firm's innovation capability

73%

of organizations see that collaboration with external partners is a challenge in the ecosystem in Dubai

Government RoleOrganizations see that the major roles of the government are to set (in order of importance):

1. Formal policies and regulations to protect IP

2. Initiatives to boost innovation output (incubators, innovation awards, accelerators)

3. Financing and Funding (Government backed Innovation Funds)

“DUE TO THE GEOPOLITICAL SITUATION, LONG TERM SUSTAINABLE INNOVATION INITIATIVES ARE NEEDED, AS THEY ARE NOT AFFECTED BY SHORT TERM VOLATILITY”

Faisal Belhoul


4.3 INDUSTRY PERFORMANCE

Following last year’s improvement in innovation across all industries, only half were able to maintain this success while the rest witnessed a drop in their innovation score.

Industry 2017 2016 2015

Construction & Real Estate 60.59 1.5% 59.69 5.4% 56.61

Education, Training & Research 61.64 -0.9% 62.26 8.3% 57.51

Energy & Utilities (Oil & Gas, Electricity, Water)

60.47 -1.7% 61.54 7.7% 57.12

Food & Beverage, Hospitality & Leisure, Entertainment

61.39 0.08% 61.34 5.0% 58.44

Healthcare 61.04 -1.8% 62.16 3.2% 60.25

ICT 62.72 3.8% 62.1 4.7% 59.29

Manufacturing 62.70 2.92% 60.92 4.3% 58.43

Media & Marketing 60.35 -5.6% 63.99 6.5% 60.06

Professional Services 61.95 7.8% 57.46 5.4% 54.54

Transport & Logistics 61.45 -3.3% 63.57 10.9% 57.33

Wholesale & Retail Trading 61.23 3.31% 59.37 0.5% 59.08

Agriculture, Fishing & Forestry 62.25 -7.21% 67.52 22.7& 55.01

Table 20: Industry Innovation Score and trend 2015 - 2017

This year, the Professional Services industry witnessed the highest increase in score, while ICT had the highest overall innovation score. Organizations in this industry are the most successful in implementing new ideas to enhance their efficiencies. They also invest in digital technology, which is used to update their business model and hence create new value offerings and enhance customer experience. Another key practice that strengthened this industry was the creation of a culture that encourages risk-taking by rewarding efforts on innovation.

The Transport and Logistics Industry is doing significantly well in innovation. In fact, organizations in this sector are relying on processes that support high technology tasks to streamline, automate and integrate their activities in order to meet customer needs in providing greater reliability at a lower cost.

“PRIVATE ORGANIZATIONS NEED TO UNDERSTAND THAT THEY HAVE TO DISRUPT THEIR BUSINESSES AND ACCEPT FAILURE TO COME UP WITH NEW INNOVATIONS”

H.E. Majid Saif Al Ghurair

41

Other industries whose scores have increased are Construction & Real Estate, Manufacturing, Wholesale & Trading and Food & Beverage, Hospitality & Leisure and Entertainment. The latter’s strength mainly lies in the organisation's openness to use ideas and suggestions from external and internal stakeholders which has helped them improve their innovation capabilities. Construction & Real Estate’s score increased continuously since 2015 because of the various strategies that were developed to encourage innovative thinking (e.g. recognizing innovation and rewarding employees).

Industries that have witnessed only a marginal decrease in score are Education, Training & Research and Media & Marketing, as both industries receive a minimal to no support from government services and/or co-funding with other collaboration partners to foster innovation and enhance their innovation agenda. Education institutes only play the role of education houses and are not involved with the wider community. For example, organizations do not leverage university labs and students to carry out research activities. Another reason for this decline, could be the fragmentation of the education sector, where there is no link between the different segments (high school, undergraduate schools and post-graduates schools), causing a disconnect in the learning and developing process.


90%

of firms in the ICT industry have put in place initiatives to reward and recognize innovation,

one of the highest among other industries

• Media & Marketing

• ICT

are the 2 industries that invest the most in digital technology, with 33% of organizations investing more than 15% of their revenues in the same

“INNOVATION IS A NATURAL INSTINCT FOR ANY BUSINESS, WHERE YOU NEED TO INNOVATE TO SURVIVE AND INTEGRATE IT IN YOUR DAY TO DAY LIFE”

Faisal Belhoul

“COLLABORATION BETWEEN EDUCATION INSTITUTES AND PRIVATE ORGANIZATIONS IS A KEY DRIVER OF INNOVATION”

H.E. Majid Saif Al Ghurair


4.4 INNOVATION PERFORMANCE BY COMPANY SIZE

In order to get a deeper insight on the private sector performance vis-à-vis innovation in Dubai, we have studied the performance of companies based on the size: small and medium sized enterprises with revenues less than 10 million AED, and large organization with revenues equal or more than 10 million AED.

Pillar Small Medium Enterprises(Revenues <10 million AED)

Large Organizations(Revenues >10 million AED)

Year 2017 2016 2015 2017 2016 2015

Overall Score 61.38 58.51 56.61 63.19 61.08 57.63

Enabler 66.98 59.07 55.59 67.88 61.66 57.14

Capability 62.18 58.07 52.46 63.02 60.59 55.50

Organization Enabler 48.56 62.58 46.08 48.81 63.56 50.60

Strategy, Leadership & Culture 55.12 58.21 48.90 55.57 60.57 53.36

Management of Innovation 72.46 61.14 64.44 74.25 64.98 65.86

Skills and Talent 72.57 50.36 48.04 73.47 53.25 41.52

Activity 71.78 60.08 58.73 72.74 62.74 58.78

Accessing New Ideas 69.35 68.09 59.07 70.46 70.34 65.78

Implementing New Ideas 74.22 52.06 50.85 75.02 55.13 42.40

Performance – Impact 50.18 57.39 58.64 53.81 59.92 58.60

Tangible Impact 49.19 59.04 57.90 52.58 61.11 57.66

Growth and Revenue Generation 38.35 47.54 44.64 41.80 50.17 42.90

New Products and Services 55.69 63.22 57.41 59.01 65.16 61.34

Technology Readiness 53.54 66.35 71.64 56.93 68.01 68.75

Intangible Impact 51.17 55.74 59.39 55.03 58.73 59.53

Intellectual Capital 20.73 26.57 29.89 27.16 31.90 32.71

Collaboration 58.26 62.88 74.29 61.25 63.99 65.33

Talent and Culture 74.50 77.76 73.98 76.68 80.30 80.55

Table 21: Dubai’s Innovation Performance per Company Size Detailed Score, 2015-2017

Large organizations are doing better than the smaller ones in fostering innovation in Dubai and this has been consistent throughout the years. In fact, larger organizations have more access to talent as they can afford the costs of bringing in highly skilled employees from abroad, which helps them drive their innovation agenda. The difference is more evident at the impact level of innovation. New products and services are emerging from the large organizations, much more than SMEs, which is reflected in the revenues they are generating from innovation. These big players leverage universities and research labs to learn more about innovations, while the smaller organizations rely on social media, which could be a more affordable medium.

On the other hand, SMEs are outperforming the larger organizations in their innovation strategy and their organization enablers. In fact, SMEs dedicate more of their revenues to invest in R&D and digital technology, and receive more support from government incentives and initiatives – this is due to the fact that SMEs rely on innovation to prove their added value, while large organizations have their reputation well established in the market.

Big players in the private sector see a larger importance on the role the government plays in fostering innovation. This could mean that the initiatives that the government is setting are mainly focusing on the requirement of SMEs, such as innovation hubs and accelerators, while big players have other requirements around formal laws, policies and regulations for the protection of intellectual property.

There is also a consistency across the private sector throughout the years on most pillars: when the score of large organizations drop in a certain year, it also drops for the SME, and vice versa. This could show that there is a strong collaboration between big and small enterprises.

43

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score


Strategy, Leadership and Culture 57.89 71.97 57.50 49.89 51.21 42.25


Collaboration 70.07 61.56 70.00 47.48 79.29 56.25


Activity Score



Table 24: Construction and Real Estate’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5 DETAILED INDUSTRIES

4.5.1 CONSTRUCTION AND REAL ESTATE

Enablers 64.52

Capability 61.60 Activity 67.87

Organisation Enabler

61.18Accessing new Ideas

65.34

Strategy, Leadership & Culture

52.23Implementing new ideas

70.39

Management of Innovation

53.84

Skills and Talent 68.98

Table 22: Construction and Real Estate’s Enablers Score

Impact 52.73

Impact - Tangible 50.57 Impact - Intangible 54.90


41.30Intellectual Capital

35.38

New Products & Services

53.34 Collaboration 59.47



69.85

Table 23: Construction and Real Estate’s Impact Score

Overall score

60.59Output Ratio

0.82



Dubai’s Construction and Real Estate sector is looking optimistic for the coming years, as real estate developers initiate mega-projects in anticipation of World Expo 2020.

Many renowned real estate developers are working with the Dubai government to deliver world-class projects before the start of Expo 2020. The results of this collaboration are already showing in the form of mega projects initiated throughout the emirate.

Some of the important projects are Jumeirah Central, Dubai Creek Harbour, Dubai South, Schon Properties and Mirdif Hills. The city of 2.7 million people is rapidly growing to become a global symbol of the limitless power and potential of the human mind, of the future as we don't know it and of leadership and vision that inextricably links humanitarian interests with science, progress and investment.

Dubai is one of the world's most appealing real estate investment destinations. The Dubai Land Department's (DLD's) Annual Report reveals a total of 60,595 real estate transactions in 2016, exceeding Dh259 billion in value. The year saw foreign investment in the Dubai real estate market approaching Dh44 billion from 22,834 investors across 136 nationalities.

In a regional survey by Cluttons, Dubai overtook London as the most preferred property investment location for 2017. While Indian, British and Pakistani investors in real estate top the list, Chinese investors are becoming particularly aggressive in the Dubai market. This shows that this sector is mature and a safe haven for investments.

While Dubai’s main distinction from the US and Europe remains in the supply of luxurious homes, it is now increasing focus on diversifying the real estate market and providing affordable mid-market property segment. In recent times, there has been a surge in demand for affordable housing owing to improved regulations within the local real estate sector and the overall growth of the population, economy, tourism, number of visitors and infrastructure. The need for high-quality, affordable housing and apartments is on the rise as an increasing number of young professionals and families are looking for spacious houses that are value for money.

From 2016 to 2017, the overall innovation score of the sector went from 59.69 to 60.59. The main drivers of this push lie in the firm’s activities of bringing new ideas and implementing them in the local market. Yet, the sector is lagging on the capabilities and tangible impact, where it is scoring lower than the overall private sector average.

45

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 75.00 89.29 72.25 55.36 61.11 55.25


Activity Score



Table 27: Education, Training and Research’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.2 EDUCATION, TRAINING AND RESEARCH

Enablers 64.52



51.38Accessing new Ideas

65.31


55.63Implementing new ideas

68.75


69.11


Table 25: Education, Training and Research’s Enablers Score

Impact 56.53



46.25Intellectual Capital

32.50





74.69

Table 26: Education, Training and Research’s Impact Score

Overall score

61.64Output Ratio

0.88



Dubai is confidently set to create a knowledge-based economy. As part of the Ministry of Education Strategy 2010-2020, major efforts have been put in the education sector.

Earlier this year, the ministry announced a plan to begin a process to standardize their education systems to support a unified and highly-performing education sector across the nation. This will create a system capable of keeping up with future changes and developments.

The critical aspect for the private education sector is the transparency of the regulatory framework; clear policies and procedures for licensing of new institutions and transparent inspection criteria and ranking.

Another key aspect for the education sector is the integration of technology and innovation to the school curricula and school operations to ensure the best educational outcomes for students.

The top 33% firms in this industry focused mainly on their innovation activities, and specifically on implementing new ideas in the market (e.g. the integration of technology and innovation to schools, as mentioned above). On the other hand, bottom 33% are more focused on seeing the impact of innovation, and mainly on intellectual capital, in which they score 25% higher than the overall private sector bottom tier. This is explained by the extensive research activities and constant trainings that is strengthening the intangible impact in that sector.

47

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 67.73 84.38 65.75 50.87 71.38 59.25


Activity Score



Table 30: Energy and Utilities' Bottom 33% and Top 33% Detailed Scores, 2015-2017

4.5.3 ENERGY AND UTILITIES

Enablers 64.43



52.95 Accessing new Ideas

66.75


53.97 Implementing new ideas

69.28


68.24


Table 28: Energy and Utilities' Enablers Score

Impact 52.54




34.69




57.30 Talent & Culture

68.99

Table 29: Energy and Utilities' Impact Score

Overall score

60.47Output Ratio

0.82



Dubai government is embracing the energy revolution, working through renewable generation and saving on utilities.

In fact, savings on electricity and water achieved in Dubai between 2009 and 2016 amount to $263.2m (AED967m), an effort lead by Dubai Electricity and Water Authority (DEWA). In line with that, Dubai aims to generate 25% of its energy from renewable sources by 2030.

The energy and utilities sectors are introducing digital innovations to enable data driven strategies, as part of the Smart Dubai initiative.

With DEWA’s commitment to the nation’s strategic directions – i.e. UAE Vision 2021 and the Dubai Plan 2021 – the latter has appointed Honeywell to support in delivering a smart energy project to provide smart meters. This project will support in creating a smart sustainable city.

The overall innovation score of the Energy and Utilities sector has decreased since 2016. This is mainly due to the decrease in the capability and impact scores. While innovation activities have taken a big step forward, the region still struggles to have the a leadership that sets suitable enablers for innovation. Due to the struggles of oil companies, growth and revenue generation has significantly dropped this year.

49

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 65.81 82.80 76.50 46.32 59.72 58.25


Activity Score



Table 33: Food, Beverage, Hospitality, Entertainment’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.4 FOOD AND BEVERAGE, HOSPITALITY, ENTERTAINMENT

Enablers 65.60




69.32



73.28


69.12


Table 31: Food, Beverage, Hospitality, Entertainment’s Enablers Score

Impact 52.99




35.46





71.32

Table 32: Food, Beverage, Hospitality, Entertainment’s Impact Score

Overall score

61.39Output Ratio

0.81



The F&B industry in Dubai is characterized by national industries and foreign investment. Free zones have been the key elements of diversification and industrialization in the F&B industry and have helped promote the development of foreign investment as well as export-oriented units. Similar to the GCC region, Dubai’s F&B industry remains largely dependent on imports.

The GCC is increasingly looking at developing capabilities in F&B manufacturing in the long-term, but challenges remain in the rising cost of imports and intense competition from imported products in the domestic market- mainly due to easy availability of products from India, China, Levant- Egypt etc. Dubai is an attractive city for multinational corporations. F&B industry in Dubai has seen strong FDI flows with international players like Fonterra, Mars, etc. establishing in Dubai.

As a multi-cultural city with a dynamic population, Dubai serves as an excellent market for innovation in F&B products. Further, Dubai has a highly mature and sophisticated retail industry that could provide support for testing and introduction of niche high-end products (organic, fortified and health foods).

The industry’s innovation score has slightly increased from 2016 to 2017. It is evident that the focus has been more on developing innovation activities, and less on developing capabilities. In fact, the capability score of the top tier performing firms in this industry, is only equal to the average of the overall private sector capability score, while the activity score stands out to be much higher than industry average (at 76.72). On the other hand, the impact has been apparent, as the firms mainly constitute of global/regional players or local firms big in size, who have had the ability to invest in innovation activities for a long time, and have access to international leading practices and innovation.

51

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 62.50 83.33 85.75 53.13 72.22 66.75


Activity Score



Table 36: Healthcare’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.5 HEALTHCARE

Enablers 65.47




68.87



66.91


72.06


Table 34: Healthcare’s Enablers Score

Impact 52.19

Impact - Tangible 49.18 Impact – Intangible 55.19



31.37





75.00

Table 35: Healthcare’s Impact Score

Overall score

61.04Output Ratio

0.80



The UAE Vision 2021 states that “the UAE [will] … invest continually to build world-class healthcare infrastructure, expertise and services in order to fulfill citizens’ growing needs and expectations.

The healthcare infrastructure in the U.A.E. is internationally recognized. In fact the evolution of healthcare services has been a top priority for all seven emirates The U.A.E.’s healthcare system has been striving to keep up with immigration-driven population growth and struggling to control rises in per-capita healthcare spending caused by increasing levels of affluence and chronic disease. Private sector initiatives (e.g. New Medical Centre and Al Noor Hospital) play a crucial role in the overall long-term development of the healthcare system.

Despite this development, people, both expats and locals, are still going abroad for medical treatment, mainly to Singapore, Thailand, India and recently to North America.

The challenges being faced in this sector, that are creating significant barriers for partnerships, include inconsistent pharmaceutical pricing, outdated medical malpractice policies, inconsistent licensing procedures and insurance issues, unavailable medical information, and inadequate healthcare education and training.

With the recent focus from the government on healthcare, the latter is still investing in innovation, and more specifically on Skills and Talent, that increased by 32% from 2016. In fact, the healthcare system requires highly skilled people, supported by developed research activities, for which the impact cannot be seen in a year or two, but will only show in the long term.

53

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 72.10 82.80 4.33 52.01 69.83 43.00


Activity Score



Table 39: ICT’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.6 ICT

Enablers 66.13




68.42



71.62


72.44


Table 37: ICT’s Enablers Score

Impact 56.01

Impact - Tangible 55.83 Impact – Intangible 56.19



34.90





72.94

Table 38: ICT’s Impact Score

Overall score

62.76Output Ratio

0.85



Developing knowledge-based industries has been a key tenet of Dubai’s long-term strategy, as outlined in the UAE Vision 2021.

The UAE has emerged as an IT hub over the past few years, particularly since the establishment of Dubai Internet City in 2000 and other economic zones since. Numerous global IT firms have established themselves here and many oversee Middle East and Africa operations from the country.

The government realizes the need to encourage IT innovation and has launched numerous initiatives to support IT entrepreneurship. The UAE ICT Fund, which operates under the Telecommunications Regulatory Authority (TRA), has been actively looking out for such ideas, and has been offering incubation and funding.

Despite these efforts, very few home-grown IT companies have a significant presence in the value-added services market, due to severe competition. The market is dominated by global services player, who have the advantage of low-cost offshore delivery capabilities and skills pools. This has resulted in the lack of establishment of local IT firms that are focused on sustainable, innovative, and intellectual property-based ICT products or services. Local IT research and development activities remain limited.

Another challenge faced is to attract foreign IT firms to invest in large delivery centres or IT manufacturing plants. This is a result of the lack of a substantial local IT skills pool: the cost of available skills is high relative to several Asian nations, and even a few Middle East countries. Therefore, the focus is on industries that are less labour intensive or less sensitive to labour costs.

Both top and bottom 33% of companies in the ICT sector are focusing mostly on empowering their innovation capabilities, and scoring higher than the overall private sector firms respectively. Impact is also highly performing, as ICT firms are highly technologically ready and are introducing new products and services to the market. This is a result of the increase in intellectual capital activities, that rose from 2016 by almost 20%.

55

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 74.68 81.53 72.00 50.16 64.51 57.35


Activity Score



Table 42: Manufacturing’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.7 MANUFACTURING

Enablers 66.92




68.29



74.31


71.55


Table 40: Manufacturing’s Enablers Score

Impact 54.27




32.56





73.28

Table 41: Manufacturing’s Impact Score

Overall score

62.70Output Ratio

0.81



GCC governments have been focusing on growing the Manufacturing sector as it has potential to grow non-oil GDP and steer countries toward a future free of petrochemical dependence.

As oil prices remain below fiscal break-even levels, governments are nurturing these abilities through long-term growth commitments. The manufacturing sector is now Dubai’s third largest. The city’s Department of Economic Development (DED) expects around US$19 million to be spent on R&D by manufacturing companies, as the sector expands from a current value of $11.2 billion to $16.1bn by 2030.

The gulf region is a main player in the Fourth Industrial Revolution, driven by technologies such as artificial intelligence (AI), advanced analytics, robotics and the Internet of Things (IoT) that are blurring the lines between machinery and software. Among the region’s manufacturing players, everything from production lines to service delivery is being dialled up by digital transformation. Microsoft, for example, with Dynamics 365 – have taken great care in integrating IoT into their products, making sensor-based analytics the key to delivering on all success goals.

Digital transformation engages customers and transforms products, leading to increased profitability; it empowers employees, which means attracting and keeping the right talent; and it optimises operations, combatting rising costs and regulatory obligations, and this has a major impact on the business model of manufacturing firms and impacts their core processes as well as their day to day operations. Astute technology investment can be the difference between being a leader or a follower; a winner or a loser; a survivor or a victim.

Of all respondents, the manufacturing industry forms 14% of the top tier respondents: being one of the biggest and most profit generating industry in Dubai, organizations in this sector are investing in innovation to remain competitive in the market. The sector is performing above the average - of all private sector industries in Dubai – in all Capability, Activity and Impact.

57

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 63.54 83.33 85.75 51.04 72.22 66.75


Activity Score



Table 45: Media and Marketing’s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.8 MEDIA AND MARKETING

Enablers 65.60




67.94



71.79


72.96


Table 43: Media and Marketing’s Enablers Score

Impact 49.85




24.29





65.89

Table 44: Media and Marketing’s Impact Score

Overall score

60.35Output Ratio

0.76



The media and marketing sector in Dubai and the UAE has witnessed a massive growth in all fields, after HH Sheikh Mohammed Bin Rashid Al Maktoum, provided his support for press freedom, on condition that journalists should abide by integrity and neutrality norms and seek the truth that would contribute to the development of society.

The Dubai Film and Television Commission (DFTC) has unveiled a new vision to become the new global media hub and attract and develop talent in the media sector. Digital media production is to be the main focus to drive such vision, nurturing a sustainable environment and fostering the latest innovations impacting the creative economy.

Despite these efforts, innovation in the media and marketing sector has significantly declined, placing it below the private sector’s average on all pillars except for activities. Taking a deeper look into the performance of organizations within this industry, we see that the top tier performing companies, with an average overall innovation score of 65.8%, all are putting extensive focus on developing the skills and investing in their talents, while the bottom tier have shown challenges in having the sufficient skills for innovation. This highlights the crucial role of human capital in developing sustainable innovation within an organization.

59

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 73.23 82.61 75.00 48.37 60.71 44.25


Activity Score



Table 48: Professional Services' Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.9 PROFESSIONAL SERVICES

Enablers 65.84




67.01



72.03


71.75


Table 46: Professional Services' Enablers Score

Impact 54.17




32.26





72.39

Table 47: Professional Services' Impact Score

Overall score

61.95Output Ratio

0.82



Dubai, and the region as a whole, is witnessing sustained growth in demand for professional services providers.

This is driven by the greater sophistication in financial services that requires specialist advisory work, the increase in cross-jurisdictional trade and transactions, along with the healthy profitability and expansion of the banking sector. In the GCC particularly, banks are witnessing steady asset growth, with successful establishment and growth of new banks, and national banking giants making acquisitions across the region. State-owned enterprises and regional businesses are focusing on streamlining operations, improving business strategies and divesting non-core operations. The opening of regional equity markets to greater foreign investment, has driven the need for advisory services in areas such as corporate governance, operational and financial restructuring, deal structuring and strategic planning. In addition, segments such as succession planning are growing in importance, given that almost three quarters of family businesses in the Middle East are moving from the second to the third generation.

Some specific drivers of business opportunity include big growth in the wealth management segment with a tripling of assets under management in the MENA region and a quadrupling of asset managers. Assets under management in the broader Middle East and Africa region are expected to rise to US$1.5 trillion by 2020, from a total of US$600 billion in 2012. This represents a CAGR of nearly 12%. This will require greater legal, accounting and IT advisory services in areas such as fund administration and custody. Furthermore, DIFC is in the heart of the QISMUT (Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey) region, which constitutes 80% of global Islamic banking assets. Across QISMUT, Islamic banking assets are set to reach US$1.6 trillion by 2020.

The Professional Services industry witnessed the highest increase in score, from 2016 to 2017. in fact, it has increased in all 4 pillars. This highlights the fact that innovation is a continuous process that needs to be established from the bottom upward (enabling the required capabilities within your organization to successfully implement innovation activities and finally see this impact on your organization).

61

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 71.77 83.92 75.00 48.02 70.31 59.25


Activity Score



Table 51: Transport and Logistics‘ Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.10 TRANSPORT AND LOGISTICS

Enablers 65.44




66.41



71.67


71.11


Table 49: Transport and Logistics' Enablers Score

Impact 53.48




34.54





72.08

Table 50: Transport and Logistics‘ Impact Score

Overall score

61.45Output Ratio

0.82



Dubai has undergone tremendous growth over the years. Today, it holds the place as a significant player in international trading and transport logistics.

This growth is a result of the Dubai government’s strategy in developing sectors that have been the key contributors to economic growth, including transport and logistics, as detailed in the Dubai Strategic Plan (DSP) 2015. DSP 2015 leverages on the UAE’s foremost advantage, its inherent strategic location on the globe. This has cemented Dubai as the leading sea-air multimodal transport hub in the world – a cost-effective transport mode that provides considerable savings in transit time and freight cost.

The transport and logistics sector has proven to be resilient to global economic crisis. In fact, it was one of the strengths that the government focused on in order to weather the effects of the oil crisis, as the city’s merits as a logistics hub continued to attract investors from abroad.

The growth of Dubai and the UAE as a logistics hub also poses challenges, foremost of which is the issue on cargo security. As screening of cargo becomes more strict, the challenge for managing bodies in the country is to find a balance between addressing the need for cargo security while permitting international trade and commerce to thrive. A solution to such a challenge could be the formation of a think tank, composed of industry specialists from all economic sectors, who will each provide smart solutions that will contribute to the creation of resolutions that will ensure the country’s progress moving forward.

Despite the significant improvement in the overall innovation performance in transport and logistics sector from 2015 to 2016, this has not been sustained in 2017 as a result of a drop in the development of capabilities. Although there have been significant activities in accessing and implementing new ideas, the growth of organizations and the maturity of their products and service offerings are declining. This confirms that without a strong innovation infrastructure enabled by the right capabilities, new ideas can have a minimal impact on the company’s performance.

63

2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 68.94 81.00 82.25 45.53 66.06 60.00


Activity Score



Table 54: Wholesale and Retail Trading‘s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.11 WHOLESALE AND RETAIL TRADING

Enablers 65.97




67.37



73.31


70.14


Table 52: Wholesale and Retail Trading‘s Enablers Score

Impact 51.74




30.32





71.60

Table 53: Wholesale and Retail Trading‘s Impact Score

Overall score

61.23Output Ratio

0.79



Dubai’s business activity improved last month, boosted by the city’s wholesale and retail firms.

Emirates NBD’s Dubai Economy Tracker Index rose to 55.6 in October from 55.2 in September, after falling from 56.3 in August. A reading of below 50 indicates that the non-oil private sector economy is in decline while a reading above 50 suggests that it is expanding. The bank reported that output and new orders rose at a strong rate during the month across wholesale and retail, among other sectors, even as firms have had to cut prices to secure new business. Dubai’s wholesale and retail trade sector was the primary driver of the emirate’s business activity in October. The sector’s index rose to 60 in October, its highest reading since the survey began in March 2015, on strong output and new orders.

Retail activity is picking up in the emirate, which had earlier suffered from a strong dirham and lower purchasing power.

Emaar Malls, the retail business majority-owned by Emaar Properties, reported an 11 per cent rise in third quarter profits. The company reported that footfall at the Dubai Mall, the UAE's largest retail destination, received a record 58 million visitors in the first nine months of the year.

The wholesale and retail trade is among the biggest industries in Dubai, and has significantly improved its innovation score over the years. Skills and talent has been one of the main focuses in the industry, where the score has improved by 40% since last year. Such improvement is reflected on the activities, where more ideas are being implemented and brought to the market.

Since such an industry highly relies on importing goods from abroad, minimal efforts are being put by the leadership to spur innovation and support such activities.

It is also important to note that out of the top 33% respondents, almost 35% of them are in the wholesale and retail trading sector, showing that they are leading the innovation agenda.

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2017 Top 33%

2016 Top 33%

2015 Top 33%

2017 Bottom 33%

2016 Bottom 33%

2015 Bottom 33%


Capability Score




Collaboration 93.75 95.83 52.25 75.00 53.33 45.50


Activity Score



Table 57: Agriculture, Fishing and Forestry‘s Bottom 33% and Top 33% Detailed Score, 2015-2017

4.5.12 AGRICULTURE, FISHING AND FORESTRY

Enablers 66.68




72.40



71.88


71.43


Table 55: Agriculture, Fishing and Forestry‘s Enablers Score

Impact 54.60




12.50





79.69

Table 56: Agriculture, Fishing and Forestry‘s Impact Score

Overall score

62.65Output Ratio

0.82



The agriculture sector employs 7% of the work force and is estimated at 0.8% of GDP.

In conjunction with 2017 as the Year of Giving, H. H. Sheikh Mohammed bin Rashid Al Maktoum, launched the UAE Food Bank as a humanitarian foundation. The idea behind this step is to distribute food to those in need while eliminating wastage of food. Surplus fresh and dry foods will go to charities that feed the needy in the UAE and abroad.

The UAE's Ministry of Climate Change and Environment has put a priority on increasing the use of hydroponic technology among farmers, which will require the use of little to no soil in agriculture activities. This method will save up to 70% of water while avoiding harmful chemicals.

67

RECOMMENDATIONS05


Initiatives Next steps

In 2017, the UAE cabinet issued a manual that defines the framework of Public Private Partnerships. A law was also put in place by the government of Dubai that aims to encourage the private sector participation in the development of projects and the diversification of investments in different fields. The process of tendering and awarding projects between the private and public sector has also increased transparency and fairness, to encourage further collaborations.

DESPITE THESE EFFORTS, COLLABORATION IN THE PRIVATE SECTOR HAS DECREASED BY 6% FROM 2016 TO 2017

• Encourage collaboration among public sector entities to leverage synergies in innovation ecosystem

• Encourage collaboration among private sector to empower SMEs

• Increase awareness of the various initiatives in place

In its efforts to enhance talent and raise the level of education in the city, Dubai has attracted a number of world renowned educational institutions to open a branch in Dubai. Dubai’s political and economic stability attracted foreign institutions to establish a regional presence in Dubai. Another government initiative has been a visa scheme - to attract foreign talents, entrepreneurs, pioneers and talented minds from various fields. The plan intends to make it easier for such talents to get an entry visa in the UAE. This will eventually raise competitiveness among industries and empower the local economy.

DUBAI HAS WITNESSED A 54% INCREASE IN ITS SKILLS AND TALENT SCORE FROM 2016 TO 2017

• Set initiatives to encourage international students to study in Dubai

• Set incentives to bring back local students studying abroad to return to Dubai

• Provide and empower research labs with needed support (e.g. funding, talent)

It is clear that Dubai recognizes the primary role that technology plays in spurring innovation. Earlier this year, Sheikh Mohammed bin Rashid Al Maktoum launched the UAE Strategy for Artificial Intelligence and, for the first time in global practice, the UAE cabinet appointed a Minister of State for Artificial Intelligence, in the ambition to be at the forefront of the global technological revolution. This year, the UAE has significantly climbed up in Global Digital Government Rankings from 40th to 34th from 2016 to 2017. Also, by its use of information and communication technology to improve the quality of services provided by the digital government,

DUBAI’S PUBLIC SECTOR TECHNOLOGY READINESS SCORE HAS INCREASED 7% FROM 2016 AND 2017

• Follow a “Demand-Side Innovation Policies” to support and increase the uptake of innovations in society

In 2017, in Dubai, there has been a 38% increase in the number of companies that now have an innovation strategy in place to increase their productivity and leverage existing innovations from across the world to improve their operations. This is directly linked to Dubai’s collaboration with international key players.

THE PERFORMANCE OF THE PRIVATE SECTOR IN IMPLEMENTING NEW IDEAS HAS INCREASED BY 35%

• Incentivize to help companies collaborate with other private sector organizations around the world

• Raise awareness on the role of innovation within organization’s operation, beyond the technological aspect

Collaboration within the Ecosystem

Education and Readiness for

Innovation

Policies that Support Technology Adoption

Global Connectivity to Accelerate

Innovation

5.1 PROGRESSING THROUGH PREVIOUS RECOMMENDATIONSThe Dubai Innovation Index 2016 identified 4 key areas for the city to focus on in order to bridge the major gaps in the ecosystem to foster innovation. These recommendations were addressed, showing that Dubai is focusing on improving its innovation ecosystem and fulfilling the needs of both the private and public sector.

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5.2 OUR RECOMMENDATIONS

Strengthen technology skills along with innovation, creativity and leadership capabilities

Cities are faced with an array of choices when looking at the future. This requires an understanding of the possibilities – both desired and undesired to plan accordingly. The megatrends are the tremendous forces reshaping society: the economic shifts that are redistributing power, wealth, competition and opportunity around the globe; the disruptive innovations, radical thinking, new business models, and resource scarcity that are impacting every sector. The private sector businesses need a clear and meaningful purpose and mandate to attract and retain talent, customers and partners in the decade ahead.

The rapid advances in technological innovation, such as automation, robotics and AI, will dramatically change the way businesses are conducted. Understanding the gap between the skills businesses possess now and what they will need in the future would require thinking beyond simplistic concepts like we need more STEM skills and towards a workforce that adapts to technological requirements and advancements. The workforce in the future needs not only to adapt to organization change but be willing to acquire new skills and experiences throughout their lifetime.

Both public and private sector organizations should support the development of people by enabling opportunities to train continuously, encouraging and incentivizing adaptability.


Provide More Funding Opportunities

Although the public sector is putting great efforts to foster and fund innovation initiatives, banks and the private sector (e.g. Venture Capital) are still lagging on that end; banks have a very high debt interest rate for start-ups., and the number of venture capital deals in the ecosystem is still low. This will create more opportunities and drive entrepreneurs

An example:

In Singapore, leading in Private Investments funding, the government is providing incentives to attract entrepreneurs and venture capitalists by easing regulations and allocating money for seed and early stage start-ups. Multinational organizations and Family owned conglomerates have a big part in the investments in Venture Capital. In New York, crowdfunding is an alternative that entrepreneurs are going to for financial support.

In order to succeed, organizations should make talent and technical capabilities management a matter of urgency - or risk losing the battle to harness technological breakthroughs and innovation in their industry sector. They must also understand the future, the implication of that on their business and proactively prepare for it.

4

Enhance Collaboration with the Global Ecosystem

Dubai has been enhancing collaboration within its ecosystem - between the public and private sector as well as among the private sector - to build a mature innovation ecosystem. Efforts now must be focused on global collaboration. This will allow leveraging of global innovations, maximize operational efficiencies, and will support private organizations to scale up faster.

An example:

An example of global collaboration is the EU Gateway | Business Avenue, an initiative funded by the European Union to support European based companies to enter the Asian market by establishing long-lasting business collaboration between the two regions.

3

Focus on New Products Development

Dubai has been making significant efforts to attract technically skilled talents and to develop its educational infrastructure. With this being strongly established, the city must now ensure that it has the right strategy and framework to support the development of products and services from within its organizations: this means, there must be a focus on supporting research and having an effective and simple process to apply for an Intellectual Property.

An example:

Tokyo, the city with the highest intellectual capital score, has established an Intellectual Property High Court as an initiative by the government “to create, protect, and exploit intellectual property so as to revitalize the economy.”

2

1Collaborate with Educational Institutes

Collaboration between organization and academic institutes must be empowered in Dubai. This applies for both public and private organizations. Examples of such collaborations can be for Research and Development, or internship/part time jobs for students. The government must play a role in connecting private firms and universities and encouraging collaborations through incentives.

An example:

Amazon, the leading e-commerce company, launched a program to collaborate with four universities to help tackle complex technology problems on Artificial Intelligence. Amazon will fund the universities to carry out their research, and students will get to patent their ideas.

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APPENDIX 06


APPENDIX 1: REFERENCES

Source:

1 PwC. (2017, October). Middle East Economy Watch. Retrieved from https://www.pwc.com/m1/en/publications/economy-watch/pdf/middle-east-economy-watch-october-2017.pdf

2 IMF. (2017, April). World Economic Outlook. Retrieved from file:///C:/Users/dhalaby001/Downloads/text%20(2).pdf

3 Kwok, D., & Siu, T. (2017). Hong Kong's economy cools in third quarter, but on track for strong 2017. Retrieved from https://www.reuters.com/article/us-hongkong-economy-gdp/hong-kongs-economy-cools-in-third-quarter-but-on-track-for-strong-2017-idUSKBN1DA14L

4 Finance (2017) Chinese FDI hits $40bn in 2015 for Europe and north America. Available at: http://businessandfinance.com/news/chinese-fdi-hits-40bn-2015-europe-north-america/ (Accessed: 12 January 2016).

5 World Bank. (2017, September). World Bank warns of 'learning crisis' in global education. Retrieved from http://www.worldbank.org/en/news/press-release/2017/09/26/world-bank-warns-of-learning-crisis-in-global-education

6 Tokyo Metropolitan Government Accelerator Program “FinTech Business Camp Tokyo”. (2017). Retrieved from http://www.seisakukikaku.metro.tokyo.jp/bdc_tokyo/assets/pdf/en/fintechaccelerator/bosyuuyoukou.pdf

7 UNESCO. (n.d.). Transforming Education: The Power of ICT Policies. Retrieved from http://unesdoc.unesco.org/images/0021/002118/211842e.pdf.

8 Masudi, F. (2017, January). Education 2020: How private sector schooling in UAE will expand. Retrieved from http://gulfnews.com/news/uae/society/education-2020-how-private-sector-schooling-in-uae-will-expand-1.2008234

9 Arabian Business. (2017, September). UAE sets up council to link education to private sector needs. Retrieved from http://www.arabianbusiness.com/industries/education/379727-uae-sets-up-council-to-link-education-to-private-sector-needs

10 Arabian Industry. (2017, October). Affordability in Dubai's private school sector. Retrieved from http://www.arabianindustry.com/education/features/2017/oct/24/market-update-affordability-in-dubais-private-school-sector-5665309/

11 Smith, B. (2017, May). Dubai: 120 new schools to open over next decade, says KHDA. Retrieved from https://thepienews.com/news/dubai-private-schools-report-khda/

12 AbdulAziz Janahi, M. (2017, June). Innovation at the heart of UAE’s successful economic development. Retrieved from https://www.thenational.ae/business/innovation-at-the-heart-of-uae-s-successful-economic-development-1.72330

13 Bazeley, A. (2017, June). Virtual reality lab in Brooklyn, an NYC-NYU joint, to open in late 2017. Retrieved from https://www.amny.com/real-estate/virtual-reality-lab-in-brooklyn-an-nyc-nyu-joint-to-open-in-late-2017-1.13768201

14 Koh, D. (2017, November). Hong Kong Government plans to invest $18 billion in Innovation & Technology ecosystem. Retrieved from https://www.opengovasia.com/articles/7317-hong-kong-government-plans-to-invest-18-billion-in-innovation-technology-ecosystem

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APPENDIX 1: REFERENCES – APPENDIX

Source:

Bangalore

1 Jochelle Mendonca. (2017). Accenture sets up big innovation hub in Bengaluru. Retrieved January, 2018, from http://economictimes.indiatimes.com/tech/ites/accenture-sets-up-big-innovation-hub-in-bengaluru/articleshow/59785965.cms

2 ET Bureau. (2017). BIAL and Accenture to set up Co-Innovation Centre Read more at: //economictimes.indiatimes.com/articleshow/60275730.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. Retrieved January, 2018, from http://economictimes.indiatimes.com/articleshow/60275730.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Berlin

1 World Innovation Convention. (n.d.). World Innovation Convention. Retrieved January, 2018, from http://inno-world.com/

2 Lufthansa Innovation Hub. (n.d.). The Hub. Retrieved January, 2018, from http://hub.lh.com/

3 GTEC. (n.d.). Gtec Center. Retrieved January, 2018, from http://gtec.berlin

Beijing

1 Beijing Institue of Technology. (n.d.). Laboratory Survey. Retrieved January, 2018, from http://baicirs.bit.edu.cn/english/

2 Innovation Entreprise. (n.d.). Big Data & Analytics Innovation Summit. Retrieved January, 2018, from https://theinnovationenterprise.com/summits/big-data-beijing-2017.

Copenhagen

1 University of Copenhagen. (n.d.). The Copenhagen Innovation and Entrepreneurship Lab. Retrieved January, 2018, from http://ccc.ku.dk/partnerships/ciel/

2 Lars Lippert. (2016). IBM establishes Client Innovation Center in Copenhagen, Denmark – January 2017. Retrieved January, 2018, from https://www.ibm.com/blogs/nordic-msp/ibm-establishes-client-innovation-center-in-copenhagen-denmark-january-2017

Hong Kong

1 Innovation and Technology Fund. (n.d.). Technology Voucher Programme (TVP). Retrieved January, 2018, from http://www.itf.gov.hk/l-eng/TVP.asp

2 Innovation and Technology Bureau. (n.d.). Innovation and Technology Fund for Better Living. Retrieved January, 2018, from http://www.itb.gov.hk/en/fbl/

3 Innovation and Technology Fund. (n.d.). Research and Development Cash Rebate Scheme. Retrieved January, 2018, from https://www.itf.gov.hk/l-eng/crs.asp.

4 Top Universities. (n.d.). Study in Hong Kong. Retrieved January, 2018, from https://www.topuniversities.com/where-to-study/asia/hong-kong/guide.

Sydney

1 Amanda Hoh. (2017). EnergyLab: Program to accelerate creation of renewable energy start-ups launches in Sydney. Retrieved January, 2018, from http://www.abc.net.au/news/2017-04-13/renewable-energy-startup-accelerator-launches-in-sydney/8442594

2 Department of Industry. (n.d.). Sydney School of Entrepreneurship. Retrieved January, 2018, from https://www.industry.nsw.gov.au/business-and-industry-in-nsw/innovation-and-research/sydney-school-of-entrepreneurship.

3 Ai business. (n.d.). University of Sydney & UBTECH Launch $7.5 million AI Research Centre. Retrieved January, 2018, from https://aibusiness.com/university-sydney-ubtech-launch-7-5-million-ai-research-centre/.



Source:

Johannesburg

1 The plan to make Johannesburg home to a digital revolution. (n.d.). Retrieved from http://theconversation.com/the-plan-to-make-johannesburg-home-to-a-digital-revolution-43125

2 Africa News Network. (2017, November). City of JHB to establish innovation hubs. Retrieved from http://www.ann7.com/city-of-jhb-to-establish-innovation-hubs/

Kuala Lumpur

1 Deloitte. (n.d.). Greater Kuala Lumpur ASEAN’s rising hub for talent and innovation. Retrieved January, 2018, from http://www.investkl.gov.my/assets/multimediaMS/file/Greater_KL_ASEAN_rising_hub_for_talent_and_innovation.pdf

2 TN50 Youth Canvas. (n.d.). Retrieved January, 2018, from https://mytn50.com/?language=eng.

3 Crest. (n.d.). Retrieved January, 2018, from http://crest.my/v2/

London

1 Sustainable Bridges. (2017). Better Futures: Sustainable Bridges Help Mayor Sadiq Khan Launch 1.6m Clean Tech Incubator. Retrieved January, 2018, from http://www.sustainablebridges.co.uk/2017/06/16/better-futures-sadiq-khan-presents-1-6m-clean-tech-incubator/

2 Plexal. (n.d.). Overview. Retrieved January, 2018, from http://www.plexal.com/about/

3 London Government. (n.d.). London Sustainable Development Commission. Retrieved January, 2018, from https://www.london.gov.uk/what-we-do/environment/leadership-and-policy/london-sustainable-development-commission.

4 James Titcomb. (2017). Government backs driverless car trials in London. Retrieved January, 2018, from http://www.telegraph.co.uk/technology/2017/04/24/government-backs-driverless-car-trials-london/

Madrid

1 Electrans. (n.d.). Ferrovial and Renault to back EV car-sharing in Madrid. Retrieved January, 2018, from https://www.electrans.co.uk/ferrovial-renault-back-ev-car-sharing-madrid/.

2 Indra. (2016). Indra leads a european project to test autonomous driving on roads in lisbon, madrid and paris. Retrieved January, 2018, from http://www.indracompany.com/en/noticia/indra-leads-european-project-test-autonomous-driving-roads-lisbon-madrid-paris

3 Anabel Sarrate. (n.d.). SAP Innovation Forum Madrid 2017. Retrieved January, 2018, from https://www.opentext.com/events-and-webinars/event-detail?id=701D00000014RhZIAU.

Mexico City

1 OECD. (2017). Embracing Innovation in Government Global Trends. Retrieved January, 2018, from https://www.oecd.org/gov/innovative-government/embracing-innovation-in-government.pdf.

2 OECD. (2017). Mexico. Retrieved January, 2018, from https://www.oecd.org/eco/surveys/Mexico-2017-OECD-economic-survey-overview.pdf.

Milan

1 MIT Technology Review Insights. (2016). Think Italy. Think Innovation, Impact, and Integration. Retrieved January, 2018, from https://www.technologyreview.com/s/602272/think-italy-think-innovation-impact-and-integration/.

Moscow

1 Moscow Mayor Official Website. (2017). Innovation is a driving force behind Moscow’s economic development. Retrieved from https://www.mos.ru/en/news/item/31242073/

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Source:

Nairobi

1 Quartz Africa. (2017). Kenya’s newest tech hubs are sprouting outside its “Silicon Savannah” in Nairobi. Retrieved from https://qz.com/1059305/kenyas-newest-tech-hubs-are-sprouting-outside-its-silicon-savannah-in-nairobi/

New York

1 Call for Innovations. (n.d.). Retrieved January, 2018, from https://www1.nyc.gov/site/forward/innovations/call-for-innovations.page.

2 CS4All: NYC. (n.d.). Retrieved January, 2018, from https://csnyc.org/our-work/cs4all.

3 About Digital.NYC. (n.d.). Retrieved January, 2018, from http://www.digital.nyc/about

4 NYC Entrepreneurial Fund. (n.d.). Retrieved from www1.nyc.gov/nycbusiness/description/nyc-entrepreneurial-fund.

Paris

1 Lucia CHAVEZ PAZ. (2017). Renault opens an Innovation Lab in Paris devoted to the future of mobility. Retrieved January, 2018, from https://media.group.renault.com/global/en-gb/groupe-renault/media/pressreleases/87187/renault-ouvre-a-paris-un-open-innovation-lab-dedie-au-futur-de-la-mobilite1.

2 Cisco. (2016). Go #InsideInnovation at Paris Innovation & Research Lab. Retrieved January, 2018, from https://newsroom.cisco.com/video-content?type=webcontent&articleId=1762584.

Dubai

1 Michael J. Coren. (2017). Dubai wants to make 25% of car trips driverless by 2030, and it’s starting with Tesla taxis. Retrieved January, 2018, from https://qz.com/911900/dubai-wants-to-make-25-of-car-trips-driverless-by-2030-and-its-starting-with-tesla-taxis/.

2 Global Innovation Summit. (n.d.). Retrieved January, 2018, from http://www.innovationsummit.ae/

3 Sherouk Zakaria. (2017). Dubai's Smart Lab accelerates AI move. Retrieved January, 2018, from https://www.khaleejtimes.com/news/general/smart-lab-accelerates-ai-move.

4 Sherouk Zakaria. (2017). Dubai to introduce robots in government services soon. Retrieved January, 2018, from https://www.khaleejtimes.com/news/government/artificial-intelligence-to-soon-make-life-better-in-dubai.

Riyadh

1 Yamamah, A. (no date) Microsoft innovation center. Available at: http://yu.edu.sa/index.php/microsoft-innovation-center/ (Accessed: 17 January 2017).

2 FUTURE INVESTMENT INITIATIVE – RIYADH, SAUDI ARABIA. (2017). Retrieved from https://www.austarab.com.au/future-investment-initiative-riyadh-saudi-arabia/

San Francisco

1 VISA. (n.d.). One Market San Francisco. Retrieved January, 2018, from https://usa.visa.com/visa-everywhere/innovation-centers/san-francisco.html.

2 Jason Shueh. (2016). San Francisco Opens Superpublic Innovation Lab. Retrieved January, 2018, from (http://www.govtech.com/civic/San-Francisco-Opens-Superpublic-Innovation-Lab.html

3 F6S. (n.d.). Programs in San Francisco. Retrieved January, 2018, from https://www.f6s.com/programs?cities[]=121744&sort=open.



Source:

Sao Paulo

1 José Goldemberg. (2017). São Paulo's Emerging Innovation District. Retrieved January, 2018, from https://www.wilsoncenter.org/blog-post/sao-paulos-emerging-innovation-district.

2 GOVLAB. (2016). City of são paulo: Agents of open government Brazil’s largest city is embarking on a massive experiment to have citizens educate its public employees. Retrieved January, 2018, from http://www.thegovlab.org/static/files/smarterstate/saopaulo.pdf

3 Reuters. (2017). Facebook opened a 'hack station' in Brazil to teach startup skills to thousands of locals. Retrieved January, 2018, from http://uk.businessinsider.com/facebook-unveils-center-to-teach-brazilian-coders-entrepreneurs-2017-8?r=US&IR=T

Warsaw

1 Innovation World Cup Series. (n.d.). Innovation World Cup Conference 2017 | Warsaw. Retrieved January, 2018, from http://www.innovationworldcup.com/event/innovation-world-cup-conference-2017-warsaw/

Shanghai

1 James Chou. (n.d.). Announcing the first batch to join the new microsoft accelerator shanghai. Retrieved January, 2018, from https://www.microsoftaccelerator.com/2017/01/23/announcing-the-first-batch-to-join-the-new-microsoft-accelerator-shanghai/#more-453.

2 Innovation Entreprise. (n.d.). Big Data & Analytics Innovation Summit. Retrieved January, 2018, from https://theinnovationenterprise.com/summits/big-data-analytics-shanghai-2017.

3 Innovation Entreprise. (n.d.). Digital Marketing & Strategy Innovation Summit. Retrieved January, 2018, from https://theinnovationenterprise.com/summits/digital-marketing-strategy-shanghai-2017.

4 ShanghaiTech. (n.d.). Overview. Retrieved January, 2018, from https://robotics.shanghaitech.edu.cn/.

Singapore

1 National Research Foundation. (n.d.). Singapore Week of Innovation & Technology. Retrieved January, 2018, from https://www.nrf.gov.sg/events/switch.

2 Mindy Tan. (2016). Spring appoints 7 new accelerators for startups in emerging sectors. Retrieved January, 2018, from https://www.iesingapore.gov.sg/Media-Centre/News/2016/5/Spring-appoints-7-new-accelerators-for-startups-in-emerging-sectors.

3 Dean Koh. (2017). Fostering public-private sector partnerships in Singapore. Retrieved January, 2018, from https://www.opengovasia.com/articles/7182-exclusive-fostering-public-private-sector-partnerships-in-singapore.

4 Ong, J. (2017, February). Singapore Budget 2017 aims for innovative economy, quality environment and inclusive society. Retrieved from https://www.channelnewsasia.com/news/singapore/singapore-budget-2017-aims-for-innovative-economy-quality-enviro-7595454

Stockholm

1 Investment Stockholm. (2017). 10 biggest Stockholm tech startup stories of 2016. Retrieved January, 2018, from (http://www.investstockholm.com/news/10-biggest-stockholm-tech-startup-stories-of-2016/

2 The City of Stockholm adopts a new strategy – aims to be the smartest city in the world. (2017). Retrieved from http://international.stockholm.se/news/2017/04/the-city-of-stockholm-adopts-a-new-strategy/

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Source:

Tokyo

1 Tokyo Institute of Technology. (n.d.). Life Science and Technology Open Innovation Hub. Retrieved January, 2018, from http://www1.bio.titech.ac.jp/lihub/index_eng.html

2 Accenture. (n.d.). Accenture Launches Accenture Digital Hub in Japan to Help Clients Drive Digital Transformation. Retrieved January, 2018, from https://newsroom.accenture.com/news/accenture-launches-accenture-digital-hub-in-japan-to-help-clients-drive-digital-transformation.htm.

3 Rebecca Campbell. (n.d.). Blockchain Research Lab to Launch in Edinburgh and Tokyo with Ethereum Cofounders. Retrieved January, 2018, from https://www.cryptocoinsnews.com/blockchain-research-lab-launch-edinburgh-tokyo-ethereum-cofounders/.

4 Pete Rizzo. (2016). Bank of Tokyo is Planning to Use Blockchain for Contract Management. Retrieved January, 2018, from https://www.coindesk.com/bank-tokyo-use-blockchain-contract-management-2018/.

Toronto

1 Zillidy. (n.d.). Toronto Government Grants: Free Money for Your Small Business. Retrieved January, 2018, from http://zillidy.wpengine.com/blog/toronto-government-grants-free-money-for-your-small-business/

2 OECD. (2015). Education policy outlook Canada. Retrieved January, 2018, from http://www.oecd.org/edu/EDUCATION%20POLICY%20OUTLOOK%20CANADA.pdf

3 Kate Allen. (2017). Uber opening Toronto research hub for driverless car technology. Retrieved January, 2018, from https://www.thestar.com/news/canada/2017/05/08/uber-opening-toronto-research-hub-for-driverless-car-technology.html.

4 FITC. (n.d.). FITC Toronto 2017. Retrieved January, 2018, from http://fitc.ca/event/to17/

Zurich

1 Samuel Schlaefli. (2015). Broad support for the Innovation Park in Dübendorf. Retrieved January, 2018, from https://www.ethz.ch/en/news-and-events/eth-news/news/2015/03/breite-unterstuetzung-fuer-innovationspark-duebendorf.html.

2 IBM. (n.d.). IBM Innovation Centers. Retrieved January, 2018, from https://www-356.ibm.com/partnerworld/wps/servlet/ContentHandler/isv_inv_tsp_iic_zurich_overview.

3 Ingrid Lunden. (2017). MindMaze buys Gait Up to add motion analysis to its VR platform. Retrieved January, 2018, from https://techcrunch.com/2017/06/08/mindmaze-buys-gait-up-to-add-motion-analysis-to-its-vr-platform/.

Tallinn

1 Tallin Enterprise Department. (2017, November). Tallinn - The city where the future is now. Retrieved from https://www.visittallinn.ee/eng/visitor/discover/articles-guides/tallinn-innovative-city


APPENDIX 2: BENCHMARKING WITH OTHER INNOVATION STUDIES

Dubai Private Sector Innovation Index HOW IS IT DIFFERENT?

Innovation Study

Data Collection Modes

Data evaluation methodology

Weight Scaling Normalising Averaging

Global Innovation Index

• Macro data

- quantitative/objective/hard data (55 indicators),

- composite indicators/index data (19 indicators),

• survey/qualitative/subjective/soft data (5 indicators)

36/79 indicator assigned half weight

41 indicators were scaled at source for economy comparisons to be valid – This was done through division by gross domestic product (GDP) in current US dollars, purchasing power parity GDP in international dollars (PPP$ GDP), population or the total unit corresponding to the particular statistic. (The scaling factor in each case was the value corresponding to the same year of the particular indicator)

The 79 indicators were normalized into the [0, 100] range, with higher scores representing better outcomes. Normalization was made according to the min-max method

The GII relies on seven pillars. Each pillar is divided into three sub-pillars, and each sub-pillar is composed of two to five individual indicators. Each sub-pillar score is calculated as the weighted average of its individual indicators. Each pillar score is calculated as the weighted average of its sub-pillar scores.

For the sake of transparency and replicability of results, no additional effort was made to fill missing values. Missing values are indicated with ‘n/a’ and are not considered in the sub-pillar score.

Abu Dhabi Innovation Index

• Macro data

- quantitative/objective/hard data

- survey/qualitative/subjective/soft data

• Survey questionnaire (survey conducted in person)

the scoring is a non-weighted average

‘Min-max’ normalization method.

This approach scales the data for each indicator over a common range [in this case, 1 to 7, 1 being the lowest].

the scoring is a non-weighted average

79



Innovation Study




Innovation in Public Sector Organisations – NESTA UK

• Survey questionnaire

the scoring is a non-weighted average.

The different approaches to scoring for each answer were harmonized by attributing each answer either ‘1’ or ‘0’ to indicate whether the associated variable was having an overall positive impact (‘1’) on this aspect (sub-category) of innovation or not (‘0’) and then averaged the scores for each of these sub-categories, representing each score as an indices of 0-100 per cent.


European Public Sector Innovation Scoreboard

• Macro data


- composite indicators/index data survey/qualitative/subjective/soft data


Weights were rescaled for countries with some but not all of the factors in the Postsecondary education and patent activity metrics.


Bloomberg Innovation Index

• Macro data


- composite indicators/index data




Innovation Study




Innovation in Government Services – Thomson Reuters

• Macro data


Given the list of stakeholders, government goals and their representative metrics, each sector was then scored by a weighted average on baseline, excellence and innovation-level score. The weights are 0.2 (20%), 0.3 (30%) and 0.5 (50%) respectively.

In order to mitigate the effect of different units/ scale on sector-score formulas, metric data were normalized (to be between 0 and 1).

Dubai Innovation Index

• Macro data


- composite indicators/index data

• Survey questionnaire


All indicators that are ratio measurements are first multiplied by the ratio base to obtain the actual value and then scaled by city-country population ratio or city-country GDP ratio depending on the nature of the value, i.e. whether it is population dependent or economic performance dependent.

Once the scale values have been computed, all values of a particular indicator are normalized across cities on a 0 – 100 scale using the min-max normalization method.


81

APPENDIX 3: METHODOLOGY AND ASSUMPTIONSTop-Down

MACRO DATA

1. Data SourcesData was obtained from multiple sources and sources were selected on the basis of:

• Trusted sources: A qualitative judgement was made to mark a source as trusted based on the use of source data in other studies. Widely used data sources such as World Bank, UNESCO were selected, whereas unreliable sources such as blog posts were ignored.

• Availability of data for selected country/city set: Selection of source data was made in accordance with ensuring that data points were available for maximum number of countries/cities selected for comparison.

• Recentness of data: To ensure valid comparison, data sources were carefully examined and selected to ensure the latest available data is obtained for each indicator.

2. Data Indicator Types• Composite Indices: These data indicators are indices in itself derived through mathematical combination of a number of

individual data indicators. E.g. 2.3.2 Energy Sustainability, which is a composite index measuring 3 dimensions, Energy Security, Energy Equity and Environmental Sustainability.

• Hard Data: These data indicators are hard factual data obtained from a direct trusted source. For example, Unemployment as a % of total labour force (World Bank).

3. Methodology for Computation of ScoresComputation of scores from the raw data collected across categories of Enablers and Performance of innovation can be described in 3 steps, Data Scaling, Data Normalisation and Data Averaging.

3.1 Data Scaling: Scaling country data to city data

• Data obtained from various sources pertains to a particular country (except data gathered from QS World University Rankings and Brookings Institute). To introduce homogeneity of data indicators and aid fair comparisons across cities, the country data gathered from these sources was scaled to city level using either city GDP or city population as a scaling factor for respective cities. Since different indicators reflect data from different years, an appropriate scaling factor was used depending on the source year of the data in question. Eg: For Gross Expenditure in Research and Development (% GDP) [Data source: 2013], the city and country GDP of 2013 was used to scale the indicator down to city level.

• Example of Scaling:

Step 1: Gross Expenditure in Research and Development (GERD) financed by abroad (% GDP). Here, GDP (country) represents the denominator. Hence, to obtain the GERD value for the country, the figure from the data source is first multiplied by GDP (country).

GERD____________ x GDP (country) = GERD (country)GDP (country)



MACRO DATA

Step 2: Value Scaling: Depending on the nature of the value (i.e., either it is population dependent or economic performance dependent), an appropriate scaling factor is used. As GERD is dependent on economic performance, the total GERD figure obtained is then scaled down to its city value by using GDP as its scaling factor.

All hard data measures have been scaled using the method described above.

3.1.1 Scaling exceptions

Referring back to the data indicator types, due to the nature, source and method of collection and evaluation of Composite Index data, these data types have not been put through the data scaling process:

• Composite Indices: It is extremely challenging to scale indicators classified under this data type. The primary reason for this is that composite indices comprise of a number of hard data or survey data elements. In order to put these data indicators through a logical scaling process, the root of each data indicator that forms a part of the overall index would have to be identified and scaled to city level by the base measure of each specific individual indicator. Due to the complexity of this task and lack of availability of the data required to conduct this scaling exercise, composite data indicators are taken as it is and are not scaled. Moreover, since the cities selected are assumed to be one of the largest economic performers of the country, it is safe to deduce the composite indicator directly applies to the selected cities.

Descriptions of data sources, classification of indicators by data types (hard data or composite index) and scale factor used is detailed out in Appendices 4 and 5.

3.1.2 Scaling Assumptions

All indicators are evaluated at their absolute value which is then scaled down using the appropriate scale factor (population scale factor or GDP scale factor) to represent data for the city in question. Scaled down absolute values of indicators are then compared across cities to arrive at scores of pillars and overall scores. Justification of using absolute scores for comparison across cities is that:

1. The theme of innovation is highly absolute and for this study the measurement of innovation across cities is done through data indicators that fall under two categories, hard data and composite indices. Hard data indicators are taken at absolute value and not as a ratio of the city’s GDP or population. The absolute value of indicators is normalised across the selected cities to allow for comparison. This study backs Innovation for cities as a qualitative theme that should not be measured and evaluated as a ratio to the size and type of economy of a particular city but just consider the absolute amount or value of innovation at the city level. Here the assumption is made that since the study compares cities, and these cities are one of the largest and most economically significant cities within the country, it would be justifiable to directly compare absolute values of data indicators of one city to another across the 28 cities. Hence, data indicators for cities are absolute value indicators and not represented as a ratio of GDP or Population; these data indicators are normalized across the selected set of cities to allow for comparison.

2. Evaluating indicators as ratios of GDP or Population instead of absolute figures would force the assumption that a particular indicator of innovation at country level applies equally to all cities within the country. To avoid this assumption and ensure a comparison specific to cities instead of countries, the scaling methodology is applied.

GDP (city)GERD (country) x _______________ = GERD (city) GDP (country)

83


MACRO DATA

3.2 Data Normalisation

In order to account for and eliminate the effect of different units and scales of the variety of data indicators on the scores for enabler and performance pillars and overall scores, a normalisation method is applied.

• Once the scale values have been computed, all values of a particular indicator are normalized across cities on a 0 – 100 scale using the min-max normalization method.

• Min-Max normalization method takes data that is measured in its engineering units and transforms it to a value between 0 and 100 (i.e. the scale defined in this case). It is advantageous as it preserves the relationships among original data values and does not introduce any bias. The lowest (min) value is set to 0 and the highest (max) value is set to 100. The normalized value is then defined as:

3.3 Data Averaging: Simple averages not weighted averages

In order to arrive at the overall innovation score, as well as the scores for each specific pillar and sub-pillar under enablers and performance, the method of averaging normalized values has been followed.

We use the simple average method instead of the weighted average method because of the advantages of the former over the latter, such as:

• Simplification of process

• Challenges in justifying weights due to variety of indicators

• Lack of concrete evidence to justify specific weights

16–10________ x 100 = 60 10

Data value – Minumum Value_______________________

The Range of Values

Example, consider different city population with values 10, 14, 16, 17, 20.

The minimum value is 10

The maximum values is 20

The data has a range of 10

For a city population reading of 16, the normalized value is 60



MACRO DATA

4. Missing data consideration:For certain indicators where data for a particular Country/City is unavailable, the missing data is not considered while calculating average scores. This approach is followed to ensure fairness in comparison and overcome underestimation of scores due to absence of data. It is ensured that missing data is not considered as 0 value.

In order to complement the macro level data analysis, Dubai Chamber of Commerce and Industry (DCCI) conducted an innovation-based survey at the micro level.

1. Data Collection: A survey consisting of 19 questions (categorized as Capability, Activity and Impact questions) was conducted through telephone interviews and e-surveys. Each question is marked on a scale of 1 (low innovation) to 5 (high innovation) the average score for each question is calculated (without considering N/A responses).

2. Scaling and Averaging: the average score for each question is calculated (without considering N/A responses). Since all data collected is across the same scale and unit, normalisation is not required here. However, to allow for comparison with macro data, the innovation scale of 1 – 5 described above is transformed to a 0 – 100 scale. The average score for each question is then calculated by multiplying the no. of responses with the assigned score across the 0 – 100 scale, and averaged out across total no. of responses.

Example:

Question 1

Innovation Scale 0 (1) 25 (2) 50 (3) 75 (4) 100 (5)

No. of responses 407 628 772 121 79 Total Responses = 2007

3. Total Innovation Micro Score: We use the simple average method to calculate the capability, activity and impact scores by averaging the calculated scores of questions under each category.

Next, the total innovation micro score is calculated by first taking the average of tangible and intangible scores to get the impact score and then taking the aggregate of capability, activity and impact scores to get the overall score.

4. Innovation Ratio: Lastly, the innovation ratio is calculated using the following formula:

(407x0) + (628x25) + (771x50) + (121x75) + (79x100)Score for Questions 1 x ______________________________________________ = 35.51 (2007)

Capability + Activity

Innovation Score (Micro) =2

2

+Impact Tangible + Impact Intangible

2

Innovation Score (Micro) =

Impact Tangible + Impact Intangible

2

Capability + Activity

2

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APPENDIX 3: METHODOLOGY AND ASSUMPTIONSMethodology and Assumptions – Top-Down

MACRO DATA

5. Survey Methodology:• The survey comprised of 25 Questions tagged as measures of Innovation Capability, Activity, Impact (Tangible) and Impact

(Intangible) and 6 Demographic responses to segregate the sources of responses.

• The survey audience was limited to private sector companies of Dubai but not restricted to industries and was targeted towards firms across all industries in Dubai registered with Dubai Chamber of Commerce and Industry.

• The survey was conducted across two platforms, one was an on-line platform powered by Qualtrics and the other was through phone interviews conducted by a leading market research company in Dubai.

6. Survey AssumptionsSelf Assessment: It is acknowledged that since respondents answered the survey on behalf of the firm and a questions were linked to the firm’s capability to innovate, activities in innovation and the tangible and intangible impact of their efforts in innovation, a certain degree of bias could be expected from respondents. It was attempted to curb this by including a disclaimer in the introduction that all survey responses would be treated in anonymity and the results would only be used to increase support for industries struggling to innovate and continue efforts to sustain innovation at high performing industries in innovation.

Activity is measured only at Micro level and embedded within Enabler measures at Macro level: Activity cannot be measured at macro level hence measured at micro level and industry level activity is what contributes to the city’s activity.

The model has 2 key elements of measurement at Macro level viz. Enablers and Performance. Enablers link to Capability and Activity measures at Micro level and Performance links to Impact at micro level. A direct comparison is seen between Performance and Impact as it is understood that impact at firm level adds up to the overall city’s performance.

However, Enabler scores at macro level are linked with Capability and Activity scores at micro level. Since indicators to evaluate activity of innovation of the private sector at macro level are very limited or mostly non-existent, all activity measures are made at micro level through the survey. It is understood that the enablers of innovation provided by the city which is measured at macro level contribute to and enable the private sector’s activities in innovation.

Where, I = all private sector industries Where, Ii = selected industries (i)

Private sector impact = ∑ impact (I)

I


Ref. No Data measure Description Type Scaling factor

0_1 Enablers

1 Political Economic and Social Environment

1_1 Political Environment

1_1_1 Political Stability and Absence of Violence/Terrorism

Index that captures perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism. Scores are standardized.

Composite Index

None

1_1_2 Rule of Law Index (Order and Security)

Combination of qualitative assessment of questions around: Crime is effectively controlled, Civil conflict is effectively limited, People do not resort to violence to redress personal grievances

Composite Index

None

1_1_3 Government Effectiveness Index that captures perceptions of the quality of public and civil services and the degree of their independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies. Scores are standardized.

Composite Index

None

1_2 Economic Growth

1_2_1 Rate of Real GDP Annual Growth for Cities

Annual percentage growth rate of GDP for cities at market prices based on constant local currency. Aggregates are based on constant 2005 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

Hard Data None - Done by Cities

1_2_2 GDP per Capita Change (%) Change in GDP per capita from 2013-2014 Hard Data None - Done by Cities

1_2_3 Unemployment, total (% total labor force)

Unemployment refers to the share of the labor force that is without work but available for and seeking employment.

Hard Data Population ratio

1_3 People

1_3_1 Happy Planet Index The HPI measures the extent to which countries deliver long, happy, sustainable lives for the people that live in them. The index uses global data on life expectancy, experienced well-being and ecological footprint to calculate this.

Composite Index

None

1_3_2 Human Development Index (HDI)

The HDI is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.

Composite Index

None

1_3_3 Population ages 15-64 Total population between the ages 15 to 64 is the number of people who could potentially be economically active. Population is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of the country of origin.


2 Infrastructure

2_1 ICT

2_1_1 Computer Software Spending Computer software spending includes the total value of purchased or leased packaged software such as operating systems, database systems, programming tools, utilities, and applications. It excludes expenditures for internal software development and outsourced custom software development. The data are a combination of actual figures and estimates. Data are reported as a percentage of GDP.

Hard Data GDP ratio

APPENDIX 4: DATA TYPES AND SCALING FACTORS

87


Ref. No Data measure Description Type Scaling factor

2_1_2 ICT Goods Import (% total goods imports)

Information and communication technology goods imports include telecommunications, audio and video, computer and related equipment; electronic components; and other information and communication technology goods. Software is excluded.

Hard Data None

2_2 Institutions

2_2_1 GERD Financed by Abroad Total domestic intramural expenditure on R&D during a given period as a percentage of GDP. Intramural R&D expenditure is all expenditure for R&D performed within a statistical unit or sector of the economy during a specific period, whatever the source of funds.

Hard Data GDP ratio

2_2_2 GERD: Performed by Business Enterprise

Gross expenditure on R&D performed by business enterprise as a percentage of GDP.

Hard Data GDP ratio

2_3 Environmental Stability

2_3_1 GDP (PPP) per kg of oil equivalent (Energy Use)

Purchasing power parity gross domestic product (PPP$ GDP) per kilogram of oil equivalent of energy use. Energy use or total primary energy supply (TPES) is calculated as the production of fuels + inputs from other sources + imports – exports – international marine bunkers +/– stock changes. It includes coal, crude oil, natural gas liquids, refinery feedstocks, additives, petroleum products, gases, combustible renewables and waste, electricity, and heat. Domestic supply (also called ‘energy apparent consumption’) differs from final consumption in that it does not take account of distribution losses. The supply (or use) of energy commodities is converted to kilograms or tons of oil equivalent (koe, toe) using standard coefficients for each energy source.

Hard Data None

2_3_2 Energy Sustainability Index (Energy Performance)

Energy performance indicators consider supply and demand, the affordability of and access to energy, and the environmental impact of a country’s energy use. Measures 3 dimensions: Energy Security, Energy Equity and Environmental Sustainability

Composite Index

SAME

2_3_3 Environmental Performance Environmental Performance Index measures across: Is the average Health Impacts, Air Quality, Water and Sanitation, Water Resources, Agriculture, Forests, Fisheries, Biodiversity and Habitat and Climate and Energy

Composite Index

SAME

3 Government

3_1 Policies

3_1_1 Total Tax Rate, % profits Total tax rate measures the amount of taxes and mandatory contributions payable by businesses after accounting for allowable deductions and exemptions as a share of commercial profits. Taxes withheld (such as personal income tax) or collected and remitted to tax authorities (such as value added taxes, sales taxes or goods and service taxes) are excluded.

Hard Data SAME

3_1_2 Trade tariffs, %duty Trade-weighted average tariff rate | 2013

An applied tariff is a customs duty that is levied on imports of merchandise goods. This indicator is calculated as a weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data).

Hard Data SAME

3_2 Regulation

3_2_1 Regulatory Enforcement Combination of qualitative assessment of questions around: government regulations are effectively enforced, Government regulations are applied and enforced without improper influence, Administrative proceedings are conducted without unreasonable delay, Due process is respected in administrative proceedings, The Government does not expropriate without adequate compensation

Composite Index

SAME

3_2_2 Regulatory Quality Index that captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development. Scores are standardized.

Composite Index

SAME



Ref. No Data measure Description Type Scaling Factor

3_3 Business Environment

3_3_1 Logistics Performance A multidimensional assessment of logistics performance, the Logistics Performance Index (LPI) compares the trade logistics profiles of 160 countries and rates them on a scale of 1 (worst) to 5 (best). The ratings are based on 6,000 individual country assessments by nearly 1,000 international freight forwarders, who rated the eight foreign countries their company serves most frequently. The LPI’s six components include: (1) the efficiency of the clearance process (speed, simplicity, and predictability of formalities) by border control agencies, including customs; (2) the quality of trade- and transport-related infrastructure (ports, railroads, roads, information technology); (3) the ease of arranging competitively priced shipments; (4) the competence and quality of logistics services (transport operators, customs brokers); (5) the ability to track and trace consignments; and (6) the frequency with which shipments reach the consignee within the scheduled or expected delivery time. Details of the survey methodologyare in Arvis et al.’s Connecting to Compete 2014: Trade Logistics in the Global Economy (2014). Scores are averaged across all respondents.

Composite Index

None

3_3_2 Ease of Doing Business Index Ease of doing business ranks economies from 1 to 189, with first place being the best. A high ranking (a low numerical rank) means that the regulatory environment is conducive to business operation. The index averages the country's percentile rankings on 10 topics covered in the World Bank's Doing Business. The ranking on each topic is the simple average of the percentile rankings on its component indicators. 1=most business-friendly regulations)

Composite Index

None

4 Skills and Talent

4_1 Education

4_1_1 Literacy Rate, Adult total (% of people ages 15+)

Adult (15+) Literacy Rate (%) Total is the percentage of the population age 15 and above who can, with understanding, read and write a short, simple statement on their everyday life. Generally, ‘literacy’ also encompasses ‘numeracy’, the ability to make simple arithmetic calculations. This indicator is calculated by dividing the number of literates aged 15 years and over by the corresponding age group population and multiplying the result by 100.

Hard Data None

4_1_2 Government Expenditure on Education per Pupil, Secondary, % GDP per capita

Government spending on education divided by the total number of secondary students, as a percentage of GDP per capita. Government expenditure (current and capital) includes government spending on educational institutions (both public and private), education administration, and subsidies for private entities (students/households and other private entities).

Hard Data None

4_1_3 School Life Expectancy, years Total number of years of schooling that a child of a certain age can expect to receive in the future, assuming that the probability of his or her being enrolled in school at any particular age is equal to the current enrolment ratio for that age.

Hard Data None

4_1_4 Number of Libraries/1000 population

The total number of libraries in a country/1000 population (it represents administrative units and not service points, since not all sources report service points consistently).


4_2 Higher Education

4_2_1 School Enrollment, Tertiary (% gross)

Gross enrolment ratio. Tertiary (ISCED 5 and 6). Total is the total enrollment in tertiary education (ISCED 5 and 6), regardless of age, expressed as a percentage of the total population of the five-year age group following on from secondary school leaving.

Hard Data None

4_2_2 Graduates in Science and Engineering, %

The share of all tertiary graduates in manufacturing, engineering, and construction over all tertiary graduates.

Hard Data None

4_2_3 No. of Universities in Top 200 World University Rankings

No. of universities in top 200 world university rankings - ranked using six indicators i.e., academic reputation, employer reputation, student-to-faculty ratio, citations per faculty, international faculty ratio and international student ratio.

Hard Data None - Done by Cities

89



4_2_4 Assessment in Reading, Mathematics & Science

The Organisation for Economic Co-operation and Development (OECD) Programme for International Student Assessment (PISA) develops three yearly surveys that examine 15-yearold students’ performance in reading, mathematics, and science. The scores are calculated in each year so that the mean is 500 and the standard deviation 100. The scores for China come from Shanghai; those for India from Himachal Pradesh and Tamil Nadu (average); those for the United Arab Emirates from Dubai; and those for the Bolivarian Republic of Venezuela from Miranda.

Hard Data None - Scores of UAE are from Dubai and others from specific Cities (SAME)

5 Funding

5_1 Public

5_1_1 Claims on Central Government, etc. (%GDP)

Claims on central government (IFS line 52AN or 32AN) include loans to central government institutions net of deposits.

Hard Data None

5_1_2 Central government debt, total (% of GDP)

Debt is the entire stock of direct government fixed-term contractual obligations to others outstanding on a particular date. It includes domestic and foreign liabilities such as currency and money deposits, securities other than shares, and loans. It is the gross amount of government liabilities reduced by the amount of equity and financial derivatives held by the government. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the fiscal year.

Hard Data None

5_1_3 GERD Financed by Government (% of total GERD)

Gross expenditure on R&D finance by government as a percentage of GDP.

Hard Data None

5_2 Private Investment

5_2_1 Inward FDI Flow (US$ Million) Amount of Total Foreign investment inflows Hard Data GDP ratio

5_2_2 Value of Greenfield Investments by Destination (US$ Million)

A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees

Hard Data GDP ratio

5_2_3 Number of Venture Capital Deals (fractional counting)

Thomson Reuters data on private equity deals, per deal, with information on the location of investment, investment company, investor firms, and funds, among other details. The series corresponds to a query on venture capital deals from 1 January 2014 to 31 December 2014, with the data collected by investment location, for a total of 19,309 deals in 73 countries in 2014. The data are reported per trillion PPP$ GDP.

Hard Data GDP ratio

5_3 Banking

5_3_1 Ease of Getting Credit The ranking is the simple average of the percentile rankings on the component indicators of the ease of getting credit index: strength of legal rights index (range 0–10); and depth of credit information index (range 0–6).

Composite Index

None

5_3_2 Domestic Credit to Private Sector

Financial resources provided to the private sector, such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable,that establish a claim for repayment. For some countries, these claims include credit to public enterprises.

Hard Data GDP ratio




6 Culture

6_1 Entrepreneurial

6_1_1 The Global Entrepreneurship & Development Index

The main contribution of the GEDI Institute is the GEI index, a breakthrough advance in measuring the quality and dynamics of entrepreneurship ecosystems at a national, regional and local level.

Composite Index

None

6_1_2 Number of Days to Start a Business

Time required to start a business is the number of calendar days needed to complete the procedures to legally operate a business. If a procedure can be speeded up at additional cost, the fastest procedure, independent of cost, is chosen

Hard Data None

6_2 Incentives

6_2_1 Maximum Working Days per Week

Maximum working days per week Hard Data None

6_2_2 Paid Annual Leave (average for workers with 1, 5 and 10 years of tenure, in working days)

Paid annual leave in working days (average for workers with 1, 5 and 10 years of tenure)

Hard Data None

6_2_3 Cost of Redundancy Dismissal, salary weeks

The redundancy cost indicator is the sum of the cost of advance notice requirements added to severance payments due when terminating a redundant worker, expressed in weeks of salary. The average value of notice requirements and severance payments applicable to a worker with 1 year of tenure, a worker with 5 years of tenure, and a worker with 10 years of tenure is used to assign the score.

Hard Data None

0_2 Performance

1 Tangible Output

1_1 New Products and Services

1_1_1 Manufacturing Value Added (annual % growth)

Annual growth rate for manufacturing value added based on constant local currency. Aggregates are based on constant 2005 US dollars. Manufacturing refers to industries belonging to ISIC divisions 15-37. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3.

Hard Data None

1_1_2 Services etc., Value Added (annual % growth)

Annual growth rate for value added in services based on constant local currency. Aggregates are based on constant 2005 US dollars. Services correspond to ISIC divisions 50-99. They include value added in wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services. Also included are imputed bank service charges, import duties, and any statistical discrepancies noted by national compilers as well as discrepancies arising from rescaling. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3.

Hard Data None

1_2 Growth and Revenue Generation

1_2_1 Market Capitalization Market capitalization (also known as ‘market value’) is the share price times the number of shares outstanding. Listed domestic companies are the domestically incorporated companies listed on the country’s stock exchanges at the end of the year. Listed companies do not include investment companies, mutual funds, or other collective investment vehicles.

Hard Data GDP ratio

1_2_2 Total Value of Stocks Traded Total value of shares traded during the period. This indicator complements the market capitalization ratio by showing whether market size is matched by trading.

Hard Data GDP ratio

91



1_2_3 New Business Density Number of new firms, defined as firms registered in the current year of reporting, per thousand population aged 15–64 years old.


1_2_4 Gross Value Added at Factor Cost (current US$)

Gross value added at factor cost (formerly GDP at factor cost) is derived as the sum of the value added in the agriculture, industry and services sectors. If the value added of these sectors is calculated at purchaser values, gross value added at factor cost is derived by subtracting net product taxes from GDP. Data are in current U.S. dollars

Hard Data GDP ratio

1_3 Technology Readiness

1_3_1 ICT Access The ICT access index is a composite index that weights five ICT indicators (20% each): (1) Fixed telephone lines per 100 inhabitants; (2) Mobile cellular telephone subscriptions per 100 inhabitants; (3) International Internet bandwidth (bit/s) per Internet user; (4) Percentage of households with a computer; and (5) Percentage of households with Internet access. It is the first sub-index in ITU’s ICT Development Index (IDI).

Composite Index

None

1_3_2 ICT Goods Exports (% total goods exports)

Information and communication technology goods exports include telecommunications, audio and video, computer and related equipment; electronic components; and other information and communication technology goods. Software is excluded

Hard Data None

1_4 Creative Outputs

1_4_1 Cultural & Creative Services Exports., % total trade

Creative services exports (% of total exports) according to the Extended Balance of Payments Services Classification EBOPS 2002—that is, EBOPS code 264 Information services; code 278 Advertising, market research and public opinion polling; code 288 Audiovisual and related services; and code 897 Other, personal, cultural and recreational services as a percentage of total trade. The score for the United States of America (USA) includes the category Film and TV tape distribution in the absence of available data for code 288 Audiovisual and related services. The category Film and tape distribution is specific to the USA and does not have a code. However, these transactions have been classified by the USA under the EBOPS item 266 (Royalties and licence fees).

Hard Data None

1_4_2 Global Entertainment & Media Output

The Global entertainment and media outlook (the Outlook) provides global analysis for consumer and advertising spend with like-for-like, five-year historical and forecast data across 13 industry segments in 59 countries. The Outlook allows one to compare and contrast regional growth rates and consumer and advertising spend. The segments covered by the Outlook are: TV subscriptions and license fees; TV advertising; Internet access; radio; out-of-home advertising; video games; filmed entertainment; newspaper publishing; consumer magazine publishing; business-to-business markets; Internet advertising; and consumer and educational book publishing and music. The score and rankings for the Global Media Expenditures for the 59 countries considered in this report are based on advertising and consumer digital and non-digital data in US$ millions at average 2012 exchange rates for the year 2012. These results are reported normalized per thousand population, 15–69 years old, for the year 2013.

Hard Data GDP ratio




1_4_3 Creative Goods Exports, % Total value of creative goods exports, net of re-exports (current US$) over total trade. ‘Total trade’ is defined as the sum of total imports code G100 goods and code S200CS commercial services (excluding government services) plus total exports of code G100 goods and code S200CS commercial services (excluding government services), divided by 2. According to the fifth edition of the International Monetary Fund’s Balance of Payments Manual, the category ‘goods’ covers general merchandise, goods for processing, repairs on goods, goods procured in ports by carriers, and nonmonetary gold. The ‘commercial services’ category is defined as being equal to ‘services’ minus ‘government services, not included elsewhere’.

Hard Data None

2 Intangible Outputs

2_1 Intellectual Capital

2_1_1 PCT Patents, Applications/million pop

The capacity of firms to develop new products will determine their competitive advantage. One indicator of the rate of new product innovation is the number of patents. This indicator measures the number of PCT patent applications

Hard Data None

2_1_2 Number of Trademark Applications Issued to Residents by the National Office

Number of trademark applications at the national trademark office, based on equivalent class counts. ‘Class count’ refers to the number of classes specified in a trademark application or registration. Data are scaled by PPP$ GDP (billions).

Hard Data GDP ratio

2_2 Creation of Culture

2_2_1 Knowledge-intensive Jobs Knowledge-intensive jobs correspond to the International Labour Organization (ILO) aggregate category “Managers, professionals, and technicians,” as provided in the ILOSTAT Database. For a few countries, when aggregate data were not available, authors have manually calculated the share of knowledge-intensive jobs (as a percentage of total employment) summing the following ISCO- 88 categories: (1) Legislators, senior officials and managers; (2) Professionals; and (3) Technicians and associate professionals.


2_2_2 Researchers headcount Researchers per million population, fulltime equivalence. Researchers in R&D are professionals engaged in the conception or creation of new knowledge, products, processes, methods, or systems and in the management of the projects concerned. Postgraduate PhD students (ISCED97 level 6) engaged in R&D are included.


2_2_3 Labor Force Participation Rate, total (% of total population ages 15+) (modeled ILO estimate) - World Bank 2013

Labor force participation rate is the proportion of the population ages 15 and older that is economically active: all people who supply labor for the production of goods and services during a specified period.

Hard Data None

2_3 Collaboration

2_3_1 Scientific & Technical Articles Number of scientific and technical journal articles (per billion PPP$ GDP) Hard Data None

2_3_2 No. of JV-Strategic Alliance Deals (fractional counting)

Thomson Reuters data on joint ventures/strategic alliances deals, per deal, with details on the country of origin of partner firms, among others. The series corresponds to a query on joint venture/strategic alliance deals from 1 January 2014 to 31 December 2014, for a totalof 1,623 deals announced in 2014, with firms headquartered in 104 participating economies. Each participating nation of each company in a deal (n countries per deal) gets, per deal, a score equivalent to 1/n (with the effect that all country scores add up to 1,623). The data are reported per trillion PPP$ GDP.

Hard Data GDP ratio

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APPENDIX 5: DATA INDICATORS AND SOURCES

Ref. No Data measure Description Year Source

0_1 Enablers

1 Political Economic and Social Environment

1_1 Political Environment

1_1_1 Political Stability and Absence of Violence/Terrorism

Index that captures perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism. Scores are standardized.

2015 World Bank, World Governance Indicators, 2015 update. (http://info.worldbank.org/governance/wgi/index.aspx#home)

1_1_2 Rule of Law Index (Order and Security)

Combination of qualitative assessment of questions around: Crime is effectively controlled, Civil conflict is effectively limited, People do not resort to violence to redress personal grievances

2016 Refer Rule of Law Sources Table

1_1_3 Government Effectiveness

Index that captures perceptions of the quality of public and civil services and the degree of their independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies. Scores are standardized.


1_2 Economic Growth

1_2_1 Rate of Real GDP Annual Growth for Cities

Annual percentage growth rate of GDP for cities at market prices based on constant local currency. Aggregates are based on constant 2005 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

2015 Calculated using city GDP from various sources

1_2_2 GDP per Capita Change (%)

Change in GDP per capita from 2015-2016 2014 Brookings Institute 2013/2014

1_2_3 Unemployment, total (% total labor force)

Unemployment refers to the share of the labor force that is without work but available for and seeking employment.

2016 World Bank, World Development Indicators

1_3 People

1_3_1 Happy Planet Index The HPI measures the extent to which countries deliver long, happy, sustainable lives for the people that live in them. The index uses global data on life expectancy, experienced well-being and ecological footprint to calculate this.

2016 New Economics Foundation, Happy Plant Index 2016

1_3_2 Human Development Index (HDI)

The HDI is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.

2015 UNDP Human Development Index 2015

1_3_3 Population ages 15-64 Total population between the ages 15 to 64 is the number of people who could potentially be economically active. Population is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of the country of origin.

2016 (https://wefsurvey.org)

2 Infrastructure

2_1 ICT

2_1_1 Computer Software Spending

Computer software spending includes the total value of purchased or leased packaged software such as operating systems, database systems, programming tools, utilities, and applications. It excludes expenditures for internal software development and outsourced custom software development. The data is a combination of actual figures and estimates and is reported as a percentage of GDP.

2015 IHS Global Insight, Information and Communication Technology Database; International Monetary Fund, World Economic Outlook 2014 database, April2015 (current US$ GDP). (http://www.ihsglobalinsight.com/ProductsServices/ProductDetail2370.htm; http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/download.aspx)




2_1_2 ICT Goods Import (% total goods imports)

Information and communication technology goods imports include telecommunications, audio and video, computer and related equipment; electronic components; and other information and communication technology goods. Software is excluded.

2015 World Bank, World Development Indicators, http://data.worldbank.org/indicator/TM.VAL.ICTG.ZS.UN

2_2 Institutions

2_2_1 GERD Financed by Abroad

Total domestic intramural expenditure on R&D during a given period as a percentage of GDP. Intramural R&D expenditure is all expenditure for R&D performed within a statistical unit or sector of the economy during a specific period, whatever the source of funds.

2015 UNESCO Institute for Statistics, UIS online database (2005–13).(http://stats.uis.unesco.org)

2_2_2 GERD: Performed by Business Enterprise

Gross expenditure on R&D performed by business enterprise as a percentage of GDP.

2013-2015

UNESCO Institute for Statistics,UIS online database (2004–13). (http://stats.uis.unesco.org)

2_3 Environmental Stability

2_3_1 GDP (PPP) per kg of oil equivalent (Energy Use)

Purchasing power parity gross domestic product (PPP$ GDP) per kilogram of oil equivalent of energy use. Energy use or total primary energy supply (TPES) is calculated as the production of fuels + inputs from other sources + imports – exports – international marine bunkers +/– stock changes. It includes coal, crude oil, natural gas liquids, refinery feedstocks, additives, petroleum products, gases, combustible renewables and waste, electricity, and heat. Domestic supply (also called ‘energy apparent consumption’) differs from final consumption in that it does not take account of distribution losses. The supply (or use) of energy commodities is converted to kilograms or tons of oil equivalent (koe, toe) using standard coefficients for each energy source.

2014 International Energy Agency, World Energy Balances online data service (2014–15). (http://www.iea.org/stats/)

2_3_2 Energy Sustainability Index (Energy Performance)

Energy performance indicators consider supply and demand, the affordability of and access to energy, and the environmental impact of a country’s energy use. Measures 3 dimensions: Energy Security, Energy Equity and Environmental Sustainability

2016 World Energy Council, Energy Trilemma Index, https://www.worldenergy.org/data/trilemma-index/

2_3_3 Environmental Performance

Environmental Performance Index measures across: Is the average Health Impacts, Air Quality, Water and Sanitation, Water Resources, Agriculture, Forests, Fisheries, Biodiversity and Habitat and Climate and Energy

2015 epi.yale.edu//epi/country-rankings

3 Government

3_1 Policies

3_1_1 Total Tax Rate, % profits

Total tax rate measures the amount of taxes and mandatory contributions payable by businesses after accounting for allowable deductions and exemptions as a share of commercial profits. Taxes withheld (such as personal income tax) or collected and remitted to tax authorities (such as value added taxes, sales taxes or goods and service taxes) are excluded.

2016 World Bank: World development indicators: http://data.worldbank.org/indicator/IC.TAX.TOTL.CP.ZS

3_1_2 Trade tariffs, %duty Trade-weighted average tariff rate | 2013

An applied tariff is a customs duty that is levied on imports of merchandise goods. This indicator is calculated as a weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data).

2016 World Economic Forum,Executive Opinion Survey 2016(https://wefsurvey.org), International Trade Centre, Trade Competitiveness Map Data

3_2 Regulation

3_2_1 Regulatory Enforcement

Combination of qualitative assessment of questions around: government regulations are effectively enforced, Government regulations are applied and enforced without improper influence, Administrative proceedings are conducted without unreasonable delay, Due process is respected in administrative proceedings, The Government does not expropriate without adequate compensation

2016 Refer Rule of Law Sources Table

3_2_2 Regulatory Quality Index that captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private-sector development. Scores are standardized.


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3_3 Business Environment

3_3_1 Logistics Performance

A multidimensional assessment of logistics performance, the Logistics Performance Index (LPI) compares the trade logistics profiles of 160 countries and rates them on a scale of 1 (worst) to 5 (best). The ratings are based on 6,000 individual country assessments by nearly 1,000 international freight forwarders, who rated the eight foreign countries their company serves most frequently. The LPI’s six components include: (1) the efficiency of the clearance process (speed, simplicity, and predictability of formalities) by border control agencies, including customs; (2) the quality of trade- and transport-related infrastructure (ports, railroads, roads, information technology); (3) the ease of arranging competitively priced shipments; (4) the competence and quality of logistics services (transport operators, customs brokers); (5) the ability to track and trace consignments; and (6) the frequency with which shipments reach the consignee within the scheduled or expected delivery time. Details of the survey methodology are in Arvis et al.’s Connecting to Compete 2014: Trade Logistics in the Global Economy (2014). Scores are averaged across all respondents.

2016 World Bank and Turku School ofEconomics, Logistics Performance Index2014; Arvis et al., 2014, Connecting to Compete2014: Trade Logistics in the Global Economy. (http://lpi.worldbank.org/)

3_3_2 Ease of Doing Business Index

Ease of doing business ranks economies from 1 to 189, with first place being the best. A high ranking (a low numerical rank) means that the regulatory environment is conducive to business operation. The index averages the country's percentile rankings on 10 topics covered in the World Bank's Doing Business. The ranking on each topic is the simple average of the percentile rankings on its component indicators. 1=most business-friendly regulations)

2016 World Bank, World Development Indicators: http://data.worldbank.org/indicator/IC.BUS.EASE.XQ

4 Skills and Talent

4_1 Education

4_1_1 Literacy Rate, Adult total (% of people ages 15+)

Adult (15+) Literacy Rate (%) Total is the percentage of the population age 15 and above who can, with understanding, read and write a short, simple statement on their everyday life. Generally, ‘literacy’ also encompasses ‘numeracy’, the ability to make simple arithmetic calculations. This indicator is calculated by dividing the number of literates aged 15 years and over by the corresponding age group population and multiplying the result by 100.

2016 UNESCO Institute for Statistics; http://www.uis.unesco.org/

4_1_2 Government Expenditure on Education per Pupil, Secondary, % GDP per capita

Government spending on education divided by the total number of secondary students, as a percentage of GDP per capita. Government expenditure (current and capital) includes government spending on educational institutions (both public and private), education administration, and subsidies for private entities (students/households and other private entities).

2013 UNESCO Institute for Statistics, UIS online database (2005–13). (http://stats.uis.unesco.org)

4_1_3 School Life Expectancy, years

Total number of years of schooling that a child of a certain age can expect to receive in the future, assuming that the probability of his or her being enrolled in school at any particular age is equal to the current enrolment ratio for that age.

2014 UNESCO Institute for Statistics,UIS online database (2004–13). (http://stats.uis.unesco.org)

4_1_4 Number of Libraries/1000 population

The total number of libraries in a country/1000 population (it represents administrative units and not service points, since not all sources report service points consistently).

2016 https://www.oclc.org/global-library-statistics.en.html

4_2 Higher Education

4_2_1 School Enrollment, Tertiary (% gross)

Gross enrolment ratio. Tertiary (ISCED 5 and 6). Total is the total enrollment in tertiary education (ISCED 5 and 6), regardless of age, expressed as a percentage of the total population of the five-year age group following on from secondary school leaving.

2016 World Bank, The Global Information Technology Report/The Global Financial Centres Index, UNESCO

4_2_2 Graduates in Science and Engineering, %

The share of all tertiary graduates in manufacturing, engineering, and construction over all tertiary graduates.

2012 UNESCO Institute for Statistics, UIS online database (2005–13). (http://stats.uis.unesco.org)

4_2_3 No. of Universities in Top 200 World University Rankings

No. of universities in top 200 world university rankings - ranked using six indicators i.e., academic reputation, employer reputation, student-to-faculty ratio, citations per faculty, international faculty ratio and international student ratio.

2013 QS World University Ranking 2015 (http://www.topuniversities.com/university-rankings/world-university-rankings/2015#sorting=rank+region=+country=+faculty=+stars=false+search=)




4_2_4 Assessment in Reading, Mathematics & Science

The Organisation for Economic Co-operation and Development (OECD) Programme for International Student Assessment (PISA) develops three yearly surveys that examine 15-yearold students’ performance in reading, mathematics, and science. The scores are calculated in each year so that the mean is 500 and the standard deviation 100. The scores for China come from Shanghai; those for India from Himachal Pradesh and Tamil Nadu (average); those for the United Arab Emirates from Dubai; and those for the Bolivarian Republic of Venezuela from Miranda.

2015 OECD Programme for International Student Assessment (PISA) (2010–12).(www.pisa.oecd.org/)

5 Funding

5_1 Public

5_1_1 Claims on Central Government, etc. (%GDP)

Claims on central government (IFS line 52AN or 32AN) include loans to central government institutions net of deposits.

2016 International Monetary Fund, International Financial Statistics and data files/World Development Indicators

5_1_2 Central government debt, total (% of GDP)

Debt is the entire stock of direct government fixed-term contractual obligations to others outstanding on a particular date. It includes domestic and foreign liabilities such as currency and money deposits, securities other than shares, and loans. It is the gross amount of government liabilities reduced by the amount of equity and financial derivatives held by the government. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the fiscal year.

2015 International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates

5_1_3 GERD Financed by Government (% of total GERD)

Gross expenditure on R&D finance by government as a percentage of GDP.

2015 Unesco Institute for Statistics (available at http://data.uis.unesco.org/Index.aspx?queryid=244)

5_2 Private Investment

5_2_1 Inward FDI Flow (US$ Million)

Amount of Total Foreign investment inflows 2016 UNCTAD (http://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx)

5_2_2 Value of Greenfield Investments by Destination (US$ Million)

A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees

2015 UNCTAD (http://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx)

5_2_3 Number of Venture Capital Deals (fractional counting)

Thomson Reuters data on private equity deals, per deal, with information on the location of investment, investment company, investor firms, and funds, among other details. The series corresponds to a query on venture capital deals from 1 January 2014 to 31 December 2014, with the data collected by investment location, for a total of 19,309 deals in 73 countries in 2014. The data are reported per trillion PPP$ GDP.

2015 Thomson Reuters, Thomson One Banker Private Equity database; International Monetary Fund, World Economic Outlook 2015 database, 2016 (PPP$ GDP). (http://banker.thomsonib.com; http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/download.aspx)

5_3 Banking

5_3_1 Ease of Getting Credit

The ranking is the simple average of the percentile rankings on the component indicators of the ease of getting credit index: strength of legal rights index (range 0–10); and depth of credit information index (range 0–6).

2015 World Bank, Ease of Doing Business Index 2015, Doing Business 2015. (http://www.doingbusiness.org/reports/global-reports/doing-business-2015)

5_3_2 Domestic Credit to Private Sector

Financial resources provided to the private sector, such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment. For some countries, these claims include credit to public enterprises.

2015 International Monetary Fund,International Financial Statistics and data files; and World Bank and OECD GDP estimates; extracted from the World Bank’s World Development Indicators database (2004–13). (http://data.worldbank.org/)

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6 Culture

6_1 Entrepreneurial

6_1_1 The Global Entrepreneurship & Development Index

The main contribution of the GEDI Institute is the GEI index, a breakthrough advance in measuring the quality and dynamics of entrepreneurship ecosystems at a national, regional and local level.

2015 Global Entrepreneurship Index 2015

6_1_2 Number of Days to Start a Business

Time required to start a business is the number of calendar days needed to complete the procedures to legally operate a business. If a procedure can be speeded up at additional cost, the fastest procedure, independent of cost, is chosen

2015 World Bank/International Finance Corporation; Doing Business 2015: Going Beyond Efficiency; www.doingbusiness.org

6_2 Incentives

6_2_1 Maximum Working Days per Week

Maximum working days per week 2014 Doing Business 2014, World Bank Group

6_2_2 Paid Annual Leave (average for workers with 1, 5 and 10 years of tenure, in working days)

Paid annual leave in working days (average for workers with 1, 5 and 10 years of tenure)

2014 Doing Business 2014, World Bank Group

6_2_3 Cost of Redundancy Dismissal, salary weeks

The redundancy cost indicator is the sum of the cost of advance notice requirements added to severance payments due when terminating a redundant worker, expressed in weeks of salary.The average value of notice requirements and severance payments applicable to a worker with 1 year of tenure, a worker with 5 years of tenure, and a worker with 10 years of tenure is used to assign the score.

2016 World Bank, Doing Business 2016: Going Beyond Efficiency. (http://www.doingbusiness.org/reports/global-reports/doing-business-2015 )

0_2 Performance

1 Tangible Output

1_1 New Products and Services

1_1_1 Manufacturing Value Added (annual % growth)

Annual growth rate for manufacturing value added based on constant local currency. Aggregates are based on constant 2005 U.S. dollars. Manufacturing refers to industries belonging to ISIC divisions 15-37. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3.

2016 World Bank national accounts data, and OECD National Accounts data files/World Development Indicators

1_1_2 Services etc., Value Added (annual % growth)

Annual growth rate for value added in services based on constant local currency. Aggregates are based on constant 2005 U.S. dollars. Services correspond to ISIC divisions 50-99. They include value added in wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services. Also included are imputed bank service charges, import duties, and any statistical discrepancies noted by national compilers as well as discrepancies arising from rescaling. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3.


1_2 Growth and Revenue Generation

1_2_1 Market Capitalization Market capitalization (also known as ‘market value’) is the share price times the number of shares outstanding. Listed domestic companies are the domestically incorporated companies listed on the country’s stock exchanges at the end of the year. Listed companies do not include investment companies, mutual funds, or other collective investment vehicles.

2015 Standard and Poor’s and World Bank and OECD GDP estimates; extracted from the World Bank’s World Development Indicators database (2006–12). (http://data.worldbank.org/)

1_2_2 Total Value of Stocks Traded

Total value of shares traded during the period. This indicator complements the market capitalization ratio by showing whether market size is matched by trading.

2016 Standard and Poor’s and World Bank and OECD GDP estimates; extracted from the World Bank’s World Development Indicators database (2006–16). (http://data.worldbank.org/)




1_2_3 New Business Density Number of new firms, defined as firms registered in the current year of reporting, per thousand population aged 15–64 years old.

2014 World Bank, Doing Business 2014, Entrepreneurship (2007–12). (http://www.doingbusiness.org/data/exploretopics/entrepreneurship)

1_2_4 Gross Value Added at Factor Cost (current US$)

Gross value added at factor cost (formerly GDP at factor cost) is derived as the sum of the value added in the agriculture, industry and services sectors. If the value added of these sectors is calculated at purchaser values, gross value added at factor cost is derived by subtracting net product taxes from GDP. Data are in current U.S. dollars


1_3 Technology Readiness

1_3_1 ICT Access The ICT access index is a composite index that weights five ICT indicators (20% each): (1) Fixed telephone lines per 100 inhabitants; (2) Mobile cellular telephone subscriptions per 100 inhabitants; (3) International Internet bandwidth (bit/s) per Internet user; (4) Percentage of households with a computer; and (5) Percentage of households with Internet access. It is the first sub-index in ITU’s ICT Development Index (IDI).

2016 International Telecommunication Union, Measuring the Information Society 2014, ICT Development Index 2014. (http://www.itu.int/en/ITU-D/Statistics/Pages/publications/mis2014.aspx)

1_3_2 ICT Goods Exports (% total goods exports)

Information and communication technology goods exports include telecommunications, audio and video, computer and related equipment; electronic components; and other information and communication technology goods. Software is excluded

2015 World Bank indicator 2015

1_4 Creative Outputs

1_4_1 Cultural & Creative Services Exports., % total trade

Creative services exports (% of total exports) according to the Extended Balance of Payments Services Classification EBOPS 2002—that is, EBOPS code 264 Information services; code 278 Advertising, market research and public opinion polling; code 288 Audiovisual and related services; and code 897 Other, personal, cultural and recreational services as a percentage of total trade. The score for the United States of America (USA) includes the category Film and TV tape distribution in the absence of available data for code 288 Audiovisual and related services. The category Film and tape distribution is specific to the USA and does not have a code. However, these transactions have been classified by the USA under the EBOPS item 266 (Royalties and licence fees).

2015 World Trade Organization, Trade in Commercial Services database, itself based on the fifth (1993) edition of the International Monetary Fund’s Balance of Payments Manual and Balance of Payments database (2004–13). (http://stat.wto.org/StatisticalProgram/WSDBStatProgramSeries.aspx?Language=E;http://unstats.un.org/unsd/tradeserv/EBOPS2002_eng.pdf)

1_4_2 Global Entertainment & Media Output

The Global entertainment and media outlook (the Outlook) provides global analysis for consumer and advertising spend with like-for-like, five-year historical and forecast data across 13 industry segments in 59 countries. The Outlook allows one to compare and contrast regional growth rates and consumer and advertising spend. The segments covered by the Outlook are: TV subscriptions and license fees; TV advertising; Internet access; radio; out-of-home advertising; video games; filmed entertainment; newspaper publishing; consumer magazine publishing; business-to-business markets; Internet advertising; and consumer and educational book publishing and music. The score and rankings for the Global Media Expenditures for the 59 countries considered in this report are based on advertising and consumer digital and non-digital data in US$ millions at average 2012 exchange rates for the year 2012. These results are reported normalized per thousand population, 15–69 years old, for the year 2013.

2015 The source of the data for the base of these calculations was derived from PwC’s Global entertainment and media outlook, 2013–2017; United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects: The 2012 Revision (population data). (http://www.pwc.com/outlook; http://stats.uis.unesco.org; http://esa.un.org/unpd/wpp/Excel-Data/population.htm)

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1_4_3 Creative Goods Exports, % Total value of creative goods exports, net of re-exports (current US$) over total trade. ‘Total trade’ is defined as the sum of total imports code G100 goods and code S200CS commercial services (excluding government services) plus total exports of code G100 goods and code S200CS commercial services (excluding government services), divided by 2. According to the fifth edition of the International Monetary Fund’s Balance of Payments Manual, the category ‘goods’ covers general merchandise, goods for processing, repairs on goods, goods procured in ports by carriers, and nonmonetary gold. The ‘commercial services’ category is defined as being equal to ‘services’ minus ‘government services, not included elsewhere’.

2015 United Nations, COMTRADE database; 2009 UNESCO Framework for Cultural Statistics, Table 3, International trade of cultural goods and services based on the 2007 Harmonised System (HS 2007); World Trade Organization, Trade in commercial Services database, itself based on the fifth (1993) edition of the International Monetary Fund’s Balance of Payments Manual and Balance of Payments database (2008–13).

2 Intangible Outputs

2_1 Intellectual Capital

2_1_1 PCT Patents, Applications/million pop

The capacity of firms to develop new products will determine their competitive advantage. One indicator of the rate of new product innovation is the number of patents. This indicator measures the number of PCT patent applications

2016 Author's calculation based on OECD; Patent Database, 2016 and World Bank; World Development Indicators database

2_1_2 Number of Trademark Applications Issued to Residents by the National Office

Number of trademark applications at the national trademark office, based on equivalent class counts. ‘Class count’ refers to the number of classes specifiedin a trademark application or registration. Data are scaled by PPP$ GDP (billions).

2015 World Intellectual Property Organization, WIPO Statistics Database; International Monetary Fund, World Economic Outlook database, 2016 (PPP$ GDP) (2010–13).

2_2 Creation of Culture

2_2_1 Knowledge-intensive Jobs Knowledge-intensive jobs correspond to the International Labour Organization (ILO) aggregate category “Managers, professionals, and technicians,” as provided in the ILOSTAT Database. For a few countries, when aggregate data were not available, authors have manually calculated the share of knowledge-intensive jobs (as a percentage of total employment) summing the following ISCO- 88 categories: (1) Legislators, senior officials and managers; (2) Professionals; and (3) Technicians and associate professionals.

2015 International Labour Organization (ILO); ILOSTAT Database; http://www.ilo.org/ilostat

2_2_2 Researchers headcount Researchers per million population, full time equivalence. Researchers in R&Dare professionals engaged in the conception or creation of new knowledge, products, processes, methods, or systems and in the management of the projects concerned. Postgraduate PhD students (ISCED97 level 6) engaged in R&D are included.

2015 UNESCO Institute for Statistics,UIS online database (2005–15). (http://stats.uis.unesco.org)

2_2_3 Labour Force Participation Rate, total (% of total population ages 15+) (modeled ILO estimate) - World Bank 2013

Labour force participation rate is the proportion of the population ages 15 and older that is economically active: all people who supply labor for the production of goods and services during a specified period.

2016 International Labour Organization, Key Indicators of the Labour Market database/World Development Indicators

2_3 Collaboration

2_3_1 Scientific & Technical Articles

Number of scientific and technical journal articles (per billion PPP$ GDP)

2016 Special tabulations from Thomson Reuters, Web of Science, Science Citation Index (SCI) and Social Sciences Citation Index (SSCI); International Monetary Fund, World Economic Outlook 2016 database, (PPP$ GDP).

2_3_2 No. of JV-Strategic Alliance Deals (fractional counting)

Thomson Reuters data on joint ventures/strategic alliances deals, per deal, with details on the country of origin of partnerfirms, among others. The series corresponds to a query on joint venture/strategic alliance deals from 1 January 2014 to 31 December 2014, for a totalof 1,623 deals announced in 2014, with firms headquartered in 104 participating economies. Each participating nation of each company in a deal (n countries per deal) gets, per deal, a score equivalent to 1/n (with the effect that all country scores add up to 1,623). The data is reported per trillion PPP$ GDP.

2016 Thomson Reuters, Thomson OneBanker Private Equity, SDC Platinum database; International Monetary Fund World Economic Outlook database, (PPP$ GDP)(2014). (http://banker.thomsonib.com;http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/download.aspx)


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