Regional Forum on Industrial Property for Africa and the Middle East

Innovation strategies in the Arab world
Prepared by:
Mustafa Nasereddin
Arab Society for Intellectual Property
(ASIP)

Introduction:
Innovation is not a new concept to the Arabs. It is a historical fact that the Arabs were the preservers of Greco-Roman science and culture in the initial stages of the Arab Golden Age.

There were astonishing achievements by Arab and Muslim scholars and scientists during the period from approximately 750 to 1050 A.D. This period is often called the "Golden Age" of the Arab World. Great advances were made in the Abbasid Islamic Empire (with its capital in Baghdad) even up to 1258 when the Mongols invaded the empire and destroyed its capital. Great achievements also continued in Muslim Spain, in Cairo, Egypt at later time periods, but the glorious "Golden Age" was the best period for science and mathematics. These achievements greatly influenced learning in Europe, as well. Without the Arab and Muslim achievements at this time, much of the learning from ancient Greece, Rome, and Egypt would have been lost forever.

An important reason for the Golden Age was the establishment of a paper mill in Baghdad. Paper was first invented in China and then the Arabs learned how it was made. The development of paper made it possible for a great many people to get books and learn from them. This was an important advance, which affected education and scholarship.

Another important reason for the "Golden Age" was the development of Arabic into the language of international scholarship. This was one of the most significant events in the history of ideas. Scholars could communicate with one another, and ideas were translated from Greek, Latin, ancient Egyptian, Chinese, and languages from other parts of the world.

Jabir Ibn Haiyan, known in Europe by the name Geber, is generally known as the Father of Chemistry. He was one of the leading scientists in Kufa (in present day Iraq). His major contribution was in the field of Chemistry. He is famous for writing twenty-two books on chemistry and alchemy. He introduced experimental investigation into alchemy, which led to modern Chemistry.

The Islamic Empire, through its massive work of translating Greek and Roman texts into Arabic, learned about the manufacture of glass lenses. Arab scientist Ibn Sahl developed the first accurate theory of refraction of light. He gave world science the understanding needed to develop all the optical tools and theories later developed in 17th century Europe. Abu Ali Hasan Ibn al-Haitham was known in Europe as Alhazen. He studied the human eye and described how we see. His Book of Optics recognized that sight is visual images entering the eye, made perceptible by adequate light.

Astronomy was important to Muslims because of their religion! They needed to know the beginning of the month of Ramadan, the hours of prayer, and the direction of Mecca. By observing the position of the sun and moon, Muslims could know the direction of Mecca. As Islam expanded to an empire over 6,000 miles wide, astronomers could help them know these things.

Arabs further developed the earliest astrolabe, a great astronomical tool. (They improved upon the Greek invention.) It was used to determine one's latitude (or place on the earth) by looking at the position of the stars and sun. It was especially important to travelers.

As for Water Management and Hydraulic Technology, by far, the most original reservoirs are to be found in the region of Qayrawan in Tunisia Since then, and due to overwhelming reasons, the Arabs fell behind on the path to progress. Having said that, we should under no circumstance listen to doomsayers and the skeptics who are purveying the belief that the future of innovation is doomed in the Arab World. Logic, and even more the facts of the ground dictate a different belief. Despite the difficulties I will allude to below, I strongly believe the future is bright.

The Primary Problems Facing Innovation in the Arab World:

1- The linguistic barrier: The Arabic language is a powerful civilization tool for the Arabs, and it represents the pillar of all that we are. The Arabic language for us exceeds the letters, words and sentences that it produces. It is an art form and communication method that, in comparison to other languages, is far more fluid and layered.

Nevertheless, at the opening chapter of the 21st century, we are facing a linguistic barrier that seems to hinder innovation. This has been a standing issue since the industrial revolution, and has become far more damaging since the information revolution of the past decade or so.

The problem is that I believe some Arab linguists have been too reluctant to accept the new linguistic concepts of scientific and technological advances that have not yet been fully, and in some cases not even partially, assimilated within everyday life. This is part of more general and sinister problems facing the Arab world.
Nevertheless, I believe that this problem is beginning to end. With almost 60-70 % of the Arab population being under the ages of 35, it is becoming clear that this new generation is far capable of adapting themselves and their culture to the new information and communication technologies.

Linguistic innovation will constitute the first building block of a new structure that will be able to speed up the assimilation of both concepts and applications.

2- The unbalanced relationship with the West: Without dwelling on this issue, and repeating the clichéd echoing in the media today, we have to be clear that there is a problem facing anything comes from the West. I do not under any circumstance acknowledge there is a clash of civilizations between the Arabs and the West, but I do see that there is a cultural friction between the two. Some might date it to the emergence of the Arab-Israeli conflict, while others might date it to the Colonial Period, and some might even date it to the Crusades a millennia ago. To have such an animosity towards and fear of the “other” is natural but it is self-defeating and this fact applies to the Arabs as much as it does to the West. In terms of innovation, however, it is self-destructive, particularly in the current period of ICT development and advances.

Many of us believe that this animosity to the West emanates from an internal self-doubt and defeatism, and therefore should be countered and eliminated.

There are a few Arab globalist intellectuals, who believe that we can build a mutually beneficial relationship with the West, and particularly with the ICT sectors. Eventually, the Arab World will have the symbiotic relationship that Asia now has with the West. Innovation will be the way to and the product of this relationship.

In this context, the West should also assist in building an innovation base in the Arab World rather than attract the innovators to the West. In essence the brain drain will not help the West on the long run, but rather it will limit its ability to have a solid base for it investments in the Arab World. Without capable brains to run your local operations at a lesser cost the Western businesses will have to send their own experts at a higher cost. The development of the local innovative talents would be far cost effective and mutually beneficial.

3- The absence of functional and modernized structures: Because of several reasons, whether political or socio-economic, there is a clear absence of the concept of structural thinking in the Arab World. Although there are examples of such scientific approach and function in a few academic and private sector institutions, those places remain islands in a raging sea of fatalistic and confused thinking. This is most endemic in the governmental and educational sectors, and to a lesser degree, in the legal system.

Innovation cannot prosper in such chaos. Let me mention here the example of IP protection that I believe will clarify why lack of a structure, in this case legal structure, creates a hostile environment for innovation. Put simply, without IP protection, the whole innovation process cannot function. An innovator without faith in the economic and legal system will take his ideas somewhere else. A banker or any other source of funding cannot risk investing in an IP property unless he is sure of its long-term benefits, and without IP protection, this cannot be guaranteed. Needless to say, the consumer, who sometimes doubles as an investor will have no incentive to participate in an economic system where IP rights don’t exist, at least not in a way where he contributes in economic development of the country and region.

Therefore we believe that Arab governments with the assistance of the private sector should endeavor at building the necessary structures, particularly the ICT and legal structures, with the in valuable assistance of international organizations such the EPO and other similar institutions.

4- The lack of “creative” investment: Some might say that all this sounds too theoretical and too academic, and a businessman might have to say, using a movie cliché, “Show me the money.” In other words, what is the real and practical business problem facing innovation in the midst of this entire address on linguistics, cultural friction, and lack of structures? The fact is without money, all ideas are floating in a vacuum or merely inside the head of the innovator, and here lies the dilemma of most innovators. Money for investment in innovative ideas comes from banks, and banks by nature, are conservative institutions and do not like taking risks. This is not merely an Arab-banking trait but also applies to banks of highly industrialized nations. And who can blame them when we discover that on average 80% of all ventures fail. That’s 8 out of every ten investments any bank makes.

Other than that, an innovator can use his own money or use his property as collateral to borrow the money from a bank. Another source is a so-called “Angel”, a rich friend or relative who’s willing to lend some spare sum and does not expect to get it back. In absence of both solutions, there has to be a way out for the innovator.
Thus, the relatively modern concept of High-Risk Venture (HRV) banking is born. This is none existent yet in the Arab world, and is very rare outside of the USA.

In short, innovation without money will not see the light of day. Therefore, sources and mechanisms of “creative” funding must be found and established.
The Structural Solutions
It is beyond any doubt that technological innovation and economic growth go hand in hand as proven in history. In fact, innovation has been the engine powering the building of empires. The most extreme of these cases has been the Industrial Revolution. In Britain, it resulted in both the enrichment of the British economy and the building of an empire spanning the five continents. In the USA, the victory of the Northern Federal Forces over the Southern Confederates was the victory of an industrialized economy over an agrarian economy. The result of this was the expansion of the US power to the rest of the world by the end of the 20th century. Even Germany and Japan who were decimated by World War Two have risen to be great economic powers today.

Germany’s impressive economy has been central to the building of the European Union. Japan also has been brilliant at adapting existing technologies and building upon them innovatively, and providing a model for the successful Asian economies such as South Korea and Singapore.

It is at this intersection between present and future is where we should focus and where we should seek the solutions to the problems facing innovation in the Arab World. Those solutions should be based on historical evidence and current experience.

1-Combining the entrepreneur and the academic
At this intersection of history, the nature of the entrepreneur from the 20th to the 21st century has changed, due mainly to the rise of the role of academia in the life of the average businessman. In other words, while a generation or two ago businessmen were mostly of a non-academic background, most businessmen today are bi-lingual university degree holders, and in many cases have graduate degrees. When this higher education meets with technological innovation, the business world will definitely be radically different than days past.

A clear difference in today’s world is the increasing role academics play both in shaping governmental policy and reforming the private sector. Stir the factor of globalization into the pot, as represented by the WTO increasing membership, and we are presented with a picture of a future that is almost unrecognizable to most businessmen of the past.

2- Establishing a knowledge-based economy
The main element in all of this is a factor as old as time, knowledge. The new globalized -academized business world has to deal with knowledge differently first by defining it. Here, we will allude to two definitions made by Dr. Michael Ryan; an E-commerce lecturer and International political economy specialist in Georgetown University, and a recurrent visitor to Jordan in the capacity of IP advisor to the Jordanian Government, there’s “explicit knowledge”, which is quantifiable and can be put in a textbook or manual, and there’s “tacit knowledge”, which is formed by individualistic talents, technological know-how and personal managerial skills. In other words, this “tacit knowledge” can only be learnt through personal interaction between individuals working in a particularly conducive business/academic environment.

What is that exactly? According to Ryan, this environment is a business-oriented academic think-tank, or a research department within a firm. This marriage of research and business forms a vital “intellectual cluster” that works on finding business solutions and on developing long-term strategies. The point is that firms in this way can capitalize on “social capital”, or the people who interact and exchange ideas, and “intellectual capital”, the individual skills of each member of this social circle, in what is fast becoming a “network economy”. A perfect example of a network economy is the IT Industry, and in particular Silicone Valley in California, USA.

Arab universities must also exceed their role as mere academic institutions. Arabs must take heed of western universities who have created Research and Development (R&D) centers for scientific research, complete with state of the art equipment and private sector funding. They have also done the same, in terms of social sciences, by establishing the so-called (Think-tank). The value of these two concepts exceeds far beyond the campus walls, and their work’s influence is clear.

Applying the (R&D) and the (Think Tank) concepts in the Arab Academic institutions, with funding and cooperation of the private sector, can be of mass-interest and socially beneficial, as well as marketable and profitable at that same time.

3-Solving the Appropriability Problem
IP protection deals with the concerns of all these parties, and particularly solves the “appropriability problem (AP)”, or how to appropriate the investment, or find its place in the market, and attempt to guarantee the returns on this investment. The appropriability problem solution guarantees IP protection that includes, functional courts with enforcement powers and specialized IP lawyers. Furthermore, the appropriability problem solution maintains the competitive edge that any free-market needs by rewarding successful products/services and weeding out the failures. Without IP protection, the line between the two is blurred and everyone loses.

The Practical Solutions
With the structural changes in place, though, the success of Arab innovation fares better, but not with out taking the following practical steps:

1- Creating “technology hubs”, like the Silicone Valley, in those parts where “explicit knowledge” and “tacit Knowledge” come together, and where innovators, bankers and businessmen meet. This is a clear and declared objective of some Arab Governments, such as that of Dubai, Tunisia, Jordan and Egypt.

2- Allowing “labor market mobility”, which is the freedom to locate and hire flexible, talented and mobile labor force to encourage the free movement of “social capital”.

3- Focusing on “institution building”, particularly an efficient and knowledgeable court system, to instill confidence in the market.

4- Building an effective Incubator Sector, a specific IP business service that provides a middle ground where innovation and business meet:

5- Establish Country & Emerging Economy National eStrategies

6- Enhance Human Capacity Development, Knowledge Creation and Sharing

7- Improve Connectivity, Increase Access and Lower Costs

8- Support the interconnection of education and research networks among Arab countries and industrialized countries,

9- Expand opportunities for training, education and knowledge sharing for people living in rural and remote areas through distance learning;

10- Support university-based “networked centers of excellence” focusing on research and learning at the intersection between IP, ICT and development.

11- Enhance the eAwareness of senior policy makers with a particular accent on the benefits of eGovernance for enhancing democracy, transparency and government accountability;

12- Promote initiatives in the field of cyber-mentoring, for example enabling the international business community to provide advice and counsel remotely to local entrepreneurs in developing countries.

13- Foster Enterprise and Entrepreneurship for Sustainable Economic Development

14- Promote Private-public partnerships involving companies, local entrepreneurs, governments, non-profit organizations and labor organizations in order to foster local enterprise, innovation and lifelong learning.; these should include an emphasis on basic education (including mathematics and sciences), as well as on vocational training and the development of core ICT skills.