ABU DHABI, 15th August, 2016 (WAM) — The UAE showed a significant improvement in its innovation standing on the 2016 Global Innovation Index which was officially launched today at a press conference at the European headquarters of the United Nations in Geneva, Switzerland.

The UAE ranked first among Arab countries and 41st worldwide in terms of overall performance on the index, up from second in the Arab World and 47th globally in 2015.

This year’s Global Innovation Index measured the performance of 128 countries and economies in the area of innovation which represents the majority of the global workforce and global GDP. The index is based on 82 sub-indices which measure innovation in detail and provide a clear understanding of how it drives economic growth and prosperity.

The index results attributed the outstanding progress of the UAE this year to its sustainable achievements in innovation inputs, especially the strengthening of institutions and market sophistication. The UAE has one of the best political and legislative environments in the world along with outstanding development in information technology, communications, infrastructure, and innovation linkages.

Sultan bin Saeed Al Mansouri, Minister of Economy, said that the remarkable progress made by the UAE on the index in leading Arab countries and elevating its global ranking adds to its impressive track record of comprehensive development witnessed under the leadership of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

The minister added that innovation is a major pillar in advancing the state’s economic development and is at the heart of good government policies aimed at placing the UAE among the top 10 countries in the world on the index by the Golden Jubilee of the Union, in line with UAE Vision 2021.

Al Mansouri emphasised that the outcome of the index, which has further strengthened the UAE’s regional leadership, is consistent with the innovation-related trends and efforts exerted by the state, particularly over the past few years. Innovation has become an integral part of the successful performance and competitiveness of the UAE, in terms of both public and private sector activities.

He added that these efforts culminated in the launching of the National Strategy for Innovation in 2014 which was followed by the declaration of 2015 as ‘The Year of Innovation’ in the UAE under the directives of the UAE President.

The index sub-indices showed that the country ranked first globally in the cost of redundancy dismissal, ease of paying taxes, tertiary inbound mobility and state of cluster development.

Progress in innovation inputs also included a significant improvement in market sophistication thanks to growth in investment and credit. Investments have gone up from a rank of 105 to 55, thanks to market capitalisation that increased from a rank of 73 to 32 as well as total value of stock traded that has gone up from a rank of 51 to 20 and VC deals that went up from 48 to 34.

It should also be noted that patent families went up from rank 93 to rank 68, gross expenditure on R&D from rank 63 to rank 48 and knowledge workers have increased from a rank of 57 to 25 increasing the overall innovation input contribution of the UAE.

The value of stocks traded rose from 4.7 percent of GDP in 2015 to 35.9 percent in this year’s index. Market capitalisation also rose from 18.2 percent of GDP to 50.5 percent. The domestic credit to the private sector rose from 59.1 percent of GDP to 65.4 percent.

In the business sophistication indices, the R&D performed by business rose from 0.1 percent of GDP to 0.5 percent, while the R&D financed by business is ranked 4th in the world.

The report said that one of the main contributors to the overall progress made by the UAE on the index this year is the robust improvement in the outputs sub-index across a number of important sectors.

Knowledge and technology outputs went up from 134 to 86. This dimension includes knowledge diffusion that has increased from 137 to 53 rank thanks among others to significant changes in FDI net outflows.

Across the creativity outputs index, the country achieved a rise in the number of trademark registration applications at the national level from 9.3 to 11.3 per billion USD GDP.

In his comment on the detailed results, H.E. Eng. Al Mansouri indicated that in light of the general slowdown in the global economy, the trend of many countries is to cut spending on research, development and the areas of innovation, while carefully considering the details of sub-indices of the report, which has an international credibility, especially those that measure market sophistication and investment and credit conditions in the areas of innovation, the business sophistication, R&D activities and advanced manufacturing as well as technology, knowledge and innovation outputs. All of these, by any standards, put the UAE in front of an extraordinary result that reflects major and continuing efforts by it to enhance its innovation environment.

Eng. Al Mansouri added, “The UAE focusses on building its capabilities and legislative environment to ensure the launch of a potential wealth of creative energies that fall in line with the national strategy for innovation, which emphasises the important role of innovation, research and science in establishing a high-productivity knowledge-competitive economy, moving the country to a new phase, and spreading the culture of innovation among individuals, government institutions and private sector companies, while building human capital provided with the best international expertise in various development fields, particularly those identified to lead the journey of innovation, namely, clean renewable energy, transportation, technology, education, health, water and space.”

He further revealed that the Ministry of Economy, the key sponsor of the index according to the decisions of the national agenda, recorded the percentage contribution of knowledge and innovation to the GDP at about 3 per cent. This figure ranks among the highest rates globally.

Al Mansouri pointed out that the ministry is working in collaboration with all its partners, most notably the Ministry of Education, the Central Bank of the UAE and the Federal Competitiveness and Statistics Authority, to raise the index percentage to 5 per cent by 2021. This is to achieve UAE Vision 2021’s objective of placing the country at the same level of member countries of the Organisation of Economic Cooperation and Development and other developed and leading countries in the field of innovation, most of which have percentages ranging between two and eight per cent.

In line with this, he shared that the ministry has launched 12 initiatives and 39 projects designed to drive the trend towards a knowledge economy and to support manufacturing and innovation in the UAE. These cover a wide range of creative developmental activities, such as ‘Young Industrial and Innovative Companies,’ an initiative for specialised financing of microenterprises, venture capital initiatives, and next-generation projects in the field of manufacturing, R&D and logistics. The Ministry of Economy is continuously working to support and develop such initiatives and projects.

Al Mansouri said that “Innovation is a national approach that requires thinking ahead of the game.” He added, “The UAE has all the opportunities and potential to achieve leaps in the field of innovation by adopting and implementing new technologies and standards such as the Internet of Things, a long-term 3D Printing strategy, and an inclusive knowledge, and innovation-based manufacturing strategy.”