EVALUATING INNOVATION IN SAUDI ARABIA: THE GLOBAL INNOVATION INDEX AND THE IMPORTANCE OF INTERNATIONAL MARKET ENGAGEMENT

Saudi Arabia's journey toward a national culture of advancement in technology and innovation has roots in the illustrious past of Islamic research and discovery. Invention and worldwide impactful contributions to science are nothing new to the Islamic world. During the Abbasid dynasty, 750 to 1258 a.h., Islamic culture, arts, and scientific advancement reached its apex. The vertex of this pinnacled legacy of achievement was the undeniable fact that the world's economy at that time benefited enormously from the furtive and creative minds of Islamic theorists, scholars, and scientists resident in the dynasty's capital, Baghdad. Lavish donations and contributions given to fund the scientific pursuits of Muslim intellectuals from Baghdad and throughout an Islamic empire stretching from Asia to Southern Europe helped to advance an already flourishing economic, commercial, and trading imperium.

It is doubtful a return to the golden age of seventh-century Islamic world preeminence of intelligentsia and innovation is what the Kingdom had in mind when its ministry of economy and planning submitted the Ninth Development Plan incorporating the notion of a knowledge-based economy as one of the document's prime directives. However, it is quite clear Saudi leaders wished to engender the Kingdom with the same widespread economic benefits the Islamic world derived from innovation 14 centuries ago by the Abbasids.

In explaining the importance of a knowledge-based economy and the direction intended for the Saudi economy over the following 15 years, the Ninth Development Plan stated:

To have been a country with no mass-generated and distributed electricity 64 years ago and then to have passed in an orderly, deliberate, and earnest fashion into becoming a nation in which some of the world's most advanced interdisciplinary research is being conducted is no small feat. The experience of the Kingdom in its creation of a national superstructure based on technology and innovation is broad-based in terms of those within its society being affected. The effort is also noteworthy because of its status as a developing country. In fact, comparatively speaking, countries in the Middle East lack the standing and recognition for innovation and the advancement in technology enjoyed by many countries with developed and developing economies around the world. Saudi Arabia, however, fares better than most in the Arabian Gulf.

The Global Innovation Index (GII) is an annual statistical analysis and publication co-produced by Cornell University, the World Intellectual Property Organization (WIPO), and the French-based graduate business school, INSEAD, which reports on a broad notion of innovation using specific metrics and measuring “the climate and infrastructure for innovation and on assessing related outcomes.”² Using a comprehensive and complex series of input and output data indices, the GII arrives at the Innovation Efficiency Ratio or more simply, “the ratio.” This ratio is obtained from measuring such critically important innovation factors, drivers, and influencers as private- and public-sector institutions, human capital and research, existing technical and general infrastructure, the relative sophistication of financial market forces available for supporting the innovative environment and the sophistication of the business (inputs), and knowledge and technology factors such as how knowledge is created and diffused within society and its impact, as well as the creative fruits of innovation such as tangible assets, intangible yields such as online activity, and other things like goods and services (outputs). The GII then uses these ratios to calculate averages yielded by the analyses for each country.

The GII is known as a useful tool to lend critical analysis to a country's approach to creating, or in the instances of some nations recrafting, the ecosystems essential to the vitality and longevity of a nation that consistently produces innovations efficiently and sustainably.

Out of the 142 nations measured in the 2013 GII's Global Innovation Index Ranking, Saudi Arabia ranked 42nd, behind its GCC neighbor the United Arab Emirates (38th) and ahead of Qatar (43rd), Bahrain (67th) and Oman (80th). A respectable position to be sure. However, the GII further evaluates and ranks each country through a series key indicators and pillars that identify a country's economic size, geographical region, and the core of its capabilities and internal infrastructure supporting its ecosystem for innovation. The GII categorizes these rankings and a country's strengths and weaknesses in the Country/Economy Profiles section.³ In viewing these rankings, a critical question arises within this chapter concerning Saudi Arabia, given its inclusion in the GII as a “high income” country and its stature as the 19th largest economy in the world as a member of the G-20: Are there areas within the GII-ranked indices in which the Kingdom might improve so as to further its standing among nations and evince a heightened state of a culture of innovation? Given Saudi Arabia's quest to achieve a knowledge-based economy, this question deserves examination. There are a number of the strengths and weaknesses identified for Saudi Arabia in the GII that prove instructive on this question.

The GII arrives at its innovation efficiency ratio by measuring critical pillars of inputs and outputs within subindices. The GII pillar inputs are: institutions, human capital and research, infrastructure, market sophistication, and business sophistication. Its pillar inputs are knowledge and technology outputs and creative outputs. Saudi Arabia achieved overall high rankings within the creative outputs pillar (24th), market sophistication pillar (38th), human capital and research pillar (39th), infrastructure pillar (41st) and business sophistication input pillar (46th). However, the Kingdom had relatively low rankings in the knowledge and technology outputs pillar (78th) and institutions pillar (77th).

Within the knowledge and technology outputs pillar, Saudi Arabia received very low-ranked scores in indicators that highlight the Kingdom's pronounced need to aid its business sector in the area of promoting the nation's exports. Weaknesses were identified within the knowledge diffusion subpillar (111th) and among its indicators were the percentage of high-tech exports minus re-exports (115th) and the percentage of communications, computer, and information services exports (114th). The knowledge creation sub-pillar also received a relatively low rank (71st) for a high-income nation, and its domestic resident patent application indicator (79th), which examined patent applications filed by the Kingdom's domestic residents through the Saudi Patent Office (SPO) and the Patent Cooperation Treaty (PCT), which was flagged as a weakness within its ecosystem.

Despite placing high in the creative outputs pillar (24th), primarily due to strengths in the Kingdom's intangible assets in ICT and business modeling, the overall scoring in this pillar also masks some revealing weaknesses. Within the creative goods and services sub-pillar (84th), an identified weakness in the percentage of creative goods exports indicator registered a ranking of 104th out of the 142 countries ranked. Although Saudis are among the most Internet-engaged societies in the world, the Kingdom fell within a low rank in the online creativity subpillar (77th). All of this points to an overarching innovation ecosystem that has some strong basic governmental and procedural backbone, but may lack a nuanced supportive system that achieves a direct and positive impact to the Saudi entrepreneur and businessperson. In a country whose business community relies heavily on the export and import of commodities, goods, and services, supporting Saudi businesses (new or established) in engaging international markets is of critical importance.

Besides the benefits stemming from the December 2013 WTO Bali accord referred to in the previous chapter, there have been a number of Saudi government programs and initiatives designed to stimulate stronger export sales of national goods and services to the world's markets.

In 1999, the Saudi Fund for Development (SFD), the Kingdom's main development financing fund since its creation in 1975, began financing the loan, surety, and insurance operations of non-oil Saudi exports. The Saudi Export Program (SEP), created pursuant to royal decree, began operations at the beginning of 2000 with the following objectives:

• Develop and diversify Saudi non-oil exports by extending credit facilities and insurance.
• Maximize the competitiveness of Saudi exporters by providing credit facilities to foreign buyers.
• Motivate Saudi exporters to explore and enter new markets by mitigating risks associated with international trade transactions such as nonpayment.
• Encourage and enhance the involvement of Saudi exporters in projects that are funded or managed by the Saudi Fund for Development.
• Maximize technical cooperation, joint financing, and reinsurance arrangements with most international and regional banks and institutions engaged in trade finance.⁴

To qualify for the program, the minimum value of the export transaction financed under the program is US$27,000 (SR 100,000), and the exported goods should be of Saudi origin or have local value added content of more than 25 percent. Although the beneficiaries of the program are primarily intended to be Saudi companies, foreign companies manufacturing in and exporting from the Kingdom are also eligible to apply for export financing and the other SEP offerings. Foreign private-or public-sector buyers of Saudi goods and services are also eligible to apply to the SEP. The SEP also extends direct funding through supplier credits that assist Saudi exporters in extending required credit to their foreign importers. If a Saudi business or foreign investor in the Kingdom is engaged in a project outside Saudi Arabia that requires Saudi goods or services, the SEP will provide local buyer credits permitting those goods or services to be sourced in the Kingdom and used in the execution of the project outside the Kingdom. In 2004, just a few years after granting its first loan facilities, the SFD board of directors approved financing for 22 non-crude oil export operations with a total value of approximately US$93 billion (SR 350 billion). By 2004 and since its inception, the SFD board had approved 51 applications for trade finance and export credit facilities, with a total value of US$309 million (SR 11.6 billion).⁵

When a nation attempts to grow its technological prowess and fortify the capacity of its private sector to innovate, commercialize inventions, and increase exports, one of the proven ways to do this is by ensuring optimal avenues for cross-border trade and investment. For those with experience in international trade, the old adage “investment follows exports” is a familiar one and axiomatic in its application. This is not always the case, and much depends on the motivations and intentions of the new-to-market exporter. For Saudi Arabia these days, if a U.S. exporter seeks a trading relationship with the Saudi market, a long-term strategy for market engagement is the only viable path to pursue. The sharing of technology or some type of knowledge transfer will invariably figure into the relationship if the effort is to be meaningful to the interests of the company and to those of the Kingdom. In regard to attracting emerging U.S. technologies into the Kingdom and supporting growth in capacity for innovation within Saudi companies, the facilitation of bilateral trade between the United States and Saudi Arabia should be viewed as an essential and elemental tool.

Under the leadership of His Excellency, Saudi Minister of Commerce and Industry, Tawfiq al-Rabiah, assistance to small and medium-sized enterprises has taken center stage. In 2013, Minister Al-Rabiah began work in establishing an export promotion entity whose responsibilities would be to aid the nation's exporters in entering markets around the world. I had the privilege of sitting down and speaking with Minister Al-Rabiah about the entity that he had in mind to take Saudi non-oil exports to new, higher levels. We discussed the nature of the work such agencies of the U.S. government and other nations do in service to their exporting communities. We even discussed possible names for the planned organization. It was evident from my conversation with the minister that he had a clear vision of how the government should be serving the international market interests of Saudi exporters.

The Ministry of Commerce and Industry (MOCI) has diplomats in Saudi embassies advancing the commercial interests of the Kingdom in its critically important markets. As president and chief executive officer of the USSABC, I continue to have the privilege of working with the diplomats in the commercial sections of the royal Saudi embassy in the United States and their consulates in New York City, Houston, and Los Angeles. In a market the size of that of the United States, fielding inquiries and channeling requests from the many Saudi and American businesses for information and the opportunity to connect across borders is a daunting daily responsibility. The Saudi consul generals and the MOCI commercial officers in the United States do a decent job in coping with the enormity of the task of assisting Saudi exporters and promoting U.S. investment in the Kingdom. However, the new export promotion entity Minister Al-Rabiah was to create was meant to go beyond the basics. Since much of the Saudi government's efforts in export promotion is geared toward increasing non-oil exports, and since large Saudi companies tend to dominate the oil and hydrocarbon downstream sectors, my impression was that this new export promotion entity would intuitively benefit the country's SMEs.

The Saudi Export Development Authority (SEDA) was created under the MCI. Mr. Ahmad Al-Hakbani, a former senior official with the Saudi Industrial Property Authority (MODON), was named its first secretary general. Mr. Al-Hakbani would later become a deputy minister in the MOCI. Upon assuming the post of SEDA's secretary general, he immediately began work setting up SEDA and staffing the new organization. I met with Secretary General Al-Hakbani and had an extended discussion concerning the promotion of Saudi exports and what would constitute best practices for a government entity such as SEDA as it seeks to fulfill its mission. I told him I was of the opinion that although it is not perfect, I considered the American system of assisting U.S. exporters into foreign markets a prime example of how a nation effectively champions the interests of its exporting community. At the top of this structure is the U.S. Department of Commerce (USDOC), the International Trade Administration (ITA), and its U.S. and Foreign Commercial Service (most commonly known as “the Commerce Service”). From its offices in more than 100 U.S. cities and within U.S. embassies and consulates in 75 countries around the world, the Commercial Service serves American exporting companies in providing technical and substantive trade data and assistance with market entry and expansion strategies every day.

Having worked in international trade for many years working in the private sector, running the State of New Jersey's international trade office, and working for the USDOC's ITA and its Commercial Service, I have a profound appreciation for the important work international trade professionals perform in expanding the market horizons of U.S. businesses around the world. It has also given me a better understanding of how the benefits of a well-rounded bilateral commercial relationship between trading nations can be shared more fully if clarity of purpose exists between them. Although not a substitute for careful economic planning, a measured and expanded trading relationship between two countries can lead to greater sharing of technology through induced private-sector relationships such as joint ventures, strategic alliances, technology licensing, mergers and acquisitions, and research and development agreements.

Governments have a critical role to play in contributing to welcoming environments conducive to business wherein companies from trading and investing nations are supported in their efforts to make new business linkages with local businesses that lead to the sharing of knowledge. This is one of the best ways to inspire a knowledge-based economy. Only by creating a community of knowledge that recognizes less the national borders that separate and focuses more on collectively exceeding the current bounds of technical knowledge can a sustainable knowledge-based economy exist and flourish for a nation. From my experience, helping more U.S companies to export to the Saudi market, and assisting more Saudi companies to export to the United States, contributes to the creation of this “community of knowledge” and in turn strengthens the Kingdom.

Although the USDOC keeps statistics on actual export deals it facilitates between U.S. companies and their foreign customers, the amount of technology transferred to the Kingdom through U.S.–Saudi joint ventures and Saudi commercial patents inspired by U.S. technologies are incalculable. The United States and its business communities continue to contribute to the positive direction innovation is taking inside the Kingdom. Other nations are partnering with Saudi Arabia contributing to the growth in its storehouse of innovations and inventions. Saudi Arabia continues to make impressive investments in shaping its environment of innovation and both the private and public sectors in the country are determined participants. Within the private sector, some of the biggest and best-known companies are helping to contribute to this milieu. With the massive spending the Saudi government has devoted to its public-sector institutions in the area of technology building, however, a look at some of the Kingdom's foremost public institutions leading the advancement of technology building and dissemination is merited.

Before proceeding further with the subject of the state of innovation in Saudi Arabia, a brief mention should be made of the difference between innovation and invention.

INNOVATION VERSUS INVENTION

When it comes to actualizing the development of technological advancement within the Kingdom, much of the discourse within Saudi Arabia has experienced a decided inclination toward emphasizing innovation as opposed to the concept of invention. In what constitutes the foundational document for the Kingdom's future science and technological development and the precursor for all subsequent industry-specific sector and sub-sector development plans from a technological viewpoint, the national science and technology policy speaks heavily as to the path to growing innovative capacity yet mentions the word “invention” only a couple of times. I think it is important throughout this discussion of Saudi Arabia's pursuit of a knowledge-based economy and the nurturing of its knowledge-based industries (KBI) that we be mindful of the distinction between “innovation” and “invention.”

Most technology historians and experts agree that invention is not the same as innovation. To put it simply, invention is always in the first instance and what follows in terms of improvement of the original is some form of innovation. One of the world's greatest twentieth-century business management theorists and authors, and the inventor of the concept of “management by objectives,” Peter F. Drucker, highlighted in his book Innovation and Entrepreneurship,⁶ what has been observed by economists as the “invention of invention.” Drucker observes that it was during the onset of World War I when the so-called inventor emerged from his and her dark and occluded laboratories to a world that began to recognize their research as having an impact on the world as it was known. From articles fashioned for war to the new industrial processes of the day, and then beyond to miraculous medical discoveries, the names of inventors began to receive sustained and worldwide notoriety.⁷

Inventors were known then, as they are today, for opening the doors of the intangible to the possibilities of the tangible through the diligence and perseverance in applying their intellect and ideas to the problems and questions of the day. Although the actualization of invention may occur with the emergence of the new thing itself, particularly in the mechanical engineering of machinery, actualization, or the practical application of an invention, is recognized as transpiring through the process of innovation. The examination of existing inventions and then taking those ideas and making something tangible of it that benefits some or all of the world is what innovators do. To put it another way, invention is the luminous spark. Innovation, however, is the fire…the flame that may burn in many different directions and to untold heights.

Drucker offers another explanation of how innovators take what exists and bring forth things from them new resources with economic benefit. Drucker said:

Another important point Drucker makes is that innovation does not have to be a “thing.” Many examples exist through which innovators have taken existing systems in the realms of social engineering, industrial production, and business management, hospital management, and health care service delivery systems, as well as mass media and communications and created new value, resources, and ways of doing things, as a result actualizing and expanding the original idea or creative system.

The applied inherent talents, abilities, collective skill sets, sustained focus, and the drive and determination of a nation's people established an optimal pursuit of excellence in technological achievements. These attributes have always been possessed by the Kingdom and they are serving it well as it develops the kind of knowledge-based economy necessary for sustained prosperity. Of course, it is useful to have a clear plan and dedicated fiscal resources devoted to the execution of a plan. The goal of moving the country from one dependent on its natural resources to one whose future is anchored by commercially exploitable and expandable ingenuity, innovation, and invention has motivated its leaders to produce a myriad of plans and initiatives.

Later in this book, we will return to Peter Drucker and his particular views on the role of the entrepreneur in innovating within economies and societies. The point to keep in mind when one considers innovation in Saudi Arabia is that Drucker believed that innovation is not an economic or a social term, but technical terminology. These technical terms encompass the multi faceted phenomena in which there is a transmutation from an old value experienced within an economy or society through resources the old value created when it emerged, to a new value with novel resources to be used by a seemingly always-expanding populace. In Innovation and Entrepreneurship, Drucker stated: “Systematic innovation therefore consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation.”

TECHNOLOGICAL AND SCIENTIFIC DISCOVERY IN SAUDI ARABIA

In the life of a nation, all journeys to unvisited horizons are best undertaken with a good road map. The course charted by the Kingdom to fulfilling its aspirations of becoming a country positively transformed by its scientific and technological innovative achievements is summarily embodied in “The Comprehensive, Long-Term, National Science and Technology Policy” (NSTP). This document, spanning the period 2001 to 2020, offers official guidance in the principles it sets forth and that the Kingdom is following to have science, technology, and innovation (STI) serve the people. According to its 1986 foundational charter, KACST was directed to propose a national policy for the development of science and technology and to devise the strategy and plans necessary to implement them. The arrival of the NSTP document was the culmination of three years of deliberations among stakeholders, including more than 500 participants from research, academia, the private sector, government, and nongovernmental organizations. The Kingdom of Saudi Arabia was the first country in the region to undertake the creation and implementation of a national policy on science and technology. KACST, the premier Saudi entity at the forefront of the advancement of Saudi Arabia into the ranks of the world's knowledge-based economies, collaborated with the MoEP in authoring NSTP. It was adopted by the council of ministers on July 8, 2002.

As adopted, the NSTP contains 10 strategic principles that establish broad areas of concentration and affords stakeholders that support the Kingdom's gains in science, technology, and innovation a reference point and methods for ensuring an integration of effort. As a reference point, the plan also serves as both a catalyst and an aid in promoting the effective realization of the objectives and goals of the Kingdom's national development plans. The 10 strategic principles provide an unambiguous narrative of Saudi leaders' thinking in regard to how the dynamism of Saudi Arabia's economic, societal, and cultural forces go forward together in serving the common goal of making it one of the world's strongest competitive nations in science, technology, and innovation. The NSTP strategic principles were meant to aid the long-term process of transitioning the Kingdom to a knowledge-based society.

As with many stated policies, programs, and agendas created and promulgated by the Kingdom, one must keep in mind one of the primary motivations of the country's leaders in directing the development and advancement of the country is being guided by the teachings, values, and principles of Islam. The validity of laws, regulations, and initiatives are often judged by it. Having such policies and programs adhere to and being in consonance with Saudi and Arab cultural values are also important considerations. As a lead-in to the enumeration of the NSTP strategic principles, KACST states: “The Science and Technology National Policy (STNP) is based upon the teachings, values, and principles of Islam that encourage learning, education, and perfection of work. The Plan also draws upon the Arab and Islamic cultural heritage.” ⁹

What is equally evident about the NSTP as a policy, and indeed what is clear about the development of this policy since its adoption and the many policy documents generated in its wake, is the recognition of how integral the private sector is to its success.

In the NSTP, there are 10 explicit references to the private sector and role it can and should play in the development of science, technology, and innovation. Five out of the 10 strategic principles comment specifically on how the science and research and development communities, government, and the private sector should be interacting among themselves to bring about greater awareness of the importance science, technology, and innovation are to society. The principles state a policy wherein the Saudi private sector is motivated “to assume a leading role in the implementation and management of scientific and technological activities” and “to invest in and support the activities of [the] science, technology, and innovation.”

The Fifth Strategic Principle states: “Promoting, developing, and diversifying the financial support sources allocated for the activities of the national science, technology, and innovation system in a way that guarantees performing its tasks properly, through the following policies,” goes on to call for the creation of methods to increase research and development resources from various sources, including the companies, so that it comprises 1.6 percent of the Kingdom's GDP by the year 2020.¹⁰ The Fifth Principle also calls for the development of “mechanisms” and “approaches” to motivate private-sector institutions to “invest in and support the activities of [the] science, technology, and innovation.¹¹

The NSTP was the antecedent of numerous development plans plotting the way forward for the advancement of specific knowledge-based industries, the protection of national security interests, the improvement of science and research-based educational curricula, and the commercialization of scientific and technological discoveries made in the Kingdom. After the NSTP's adoption in 2002, the National Science, Technology, and Innovation Plan (NSTIP) was developed to aid in the execution of the policies set forth in the NSTP. A critical component of the NSTIP is the establishment of programs designed to strengthen strategically important technologies to the Kingdom. In doing so, the NSTIP developed eight strategic programs for the advancement of a long-term national strategy to build a knowledge-based economy and society through the creation of a globally competitive science, technology, and innovation ecosystem by the year 2015. The ultimate stated goal of the Kingdom to become one of the advanced nations in science, technology, and innovation by 2025 is aided by the NSTIP.

The Kingdom's approach to the development of an enhanced science, technology, and innovation environment is both long-term based and centered on its institutions and stakeholders. A review of any of the Kingdom's development plans and policy pronouncements pertaining to its goals of achieving the status of one of the top globally competitive knowledge-based economies will reveal many references to the interface between and among its public, private, and academic institutions and sector participants. These stakeholders are viewed as integrally important in the formation of national innovation systems essential to ensuring positive economic and societal change throughout the Kingdom. National gains in science and technological skill and ability are not the ultimate goal here. More is required for such gains and the creation of an ever-expanding national base of knowledge leading superior innovation. In its Strategic Technology Program Summary document, KACST and MoEP stated:

The NSTP and the NSTIP policy, program, and implementation documents are uniform in their conceptual understanding of how government should interact with the private sector. In affirming the important role the private sector plays in the process of delivering impactful and nationally beneficial innovation, NSTP and NSTIP prime documents also recognize some limitations of business in moving the national agenda for a knowledge-based society forward. The summary document goes on to say:

We have discussed early on the role government can play in opening up markets to striving entrepreneurs and SMEs, especially export markets, for a nation's goods, services, and exportable innovations. We will discuss later the critical issue of access to capital from within the Kingdom and tapping into internationally sourced funding available to assist in the growth of the Kingdom's new and innovative businesses. A well-rounded discussion of innovation in Saudi Arabia would be wholly lacking, however, without referring in some detail to those public academic and research institutions that arguably are among the greatest agents of change in the nation's STI ecosystems.

KING ABDULAZIZ CITY FOR SCIENCE AND TECHNOLOGY (KACST)

KACST was established in 1977 as the Saudi Arabian National Centre for Science and Technology (SANCST), but renamed in 1985. There is no public academic or research institution in Saudi Arabia that has proven itself more as the most important positive agent of change over as much of a sustained period in the country's history than KACST. One could argue that the research conducted in the field of oil and gas by Saudi Aramco over last few decades produced some of the greatest changes for the Kingdom's economic prosperity and the global energy industry. I believe, however, that the Kingdom's historical record since 1977, the year that KACST was founded, shows KACST has exceedingly contributed to the progressive transformation of the Kingdom's capabilities to affect new scientific, technological, and innovative change across a wide swath of industries. Within the industrial, agricultural, and service sectors mandated to its developmental pursuits, the record contains an impressive array of accomplishments. KACST summarizes its main responsibilities and objectives as follows:

Strategic Objectives

• A sustained planning mechanism for all scientific disciplines.
• Scientifically knowledgeable and capable government agencies.
• A developed R&D infrastructure with fully functioning centers of excellence in all scientific disciplines.
• Strong interaction between the private sector and research centers.
• Regional leaders in patent ownership and issuance. Advanced incubator systems and output.
• World leaders in strategic technologies, including water and oil and gas.
• Enhanced interaction networks between all scientific agencies.¹⁴

The officials selected to manage critically important institutions such as KACST have been of exceptional quality. KACST's formal structure is headed by a supreme council followed by the president of KACST, His Excellency Dr. Mohammed Ibrahim Al-Suwaiyel. KACST President Dr. Al-Suwaiyel, who served the Kingdom as a vice president of KACST before the appointment to his first term as president in 2007, has skillfully guided the journey of KACST from an institution whose primary role began as an issuer of research grants, repository of science and technology databases, and Internet provider, to one of the region's most prolific generators of funded advancements in science, technology, and innovation.

There are two office branches reporting to the office of the president that are critically important to the successful fulfillment of KACST's mission. Besides the office of the president, the offices of vice president for research institutes, headed by His Highness Prince Dr. Turki Bin Saud Mohammed Al-Saud, and vice president for scientific research support headed by the Most Honorable Dr. Abdulaziz M. Alswailem, the primary drivers for the realization of the myriad of KACST project goals and objectives.

KACST is at once the nation's regulator, promoter, primary scientific, and technology researcher, funding agency and chief policy executor. As KACST president, Dr. Al-Suwaiyel described the agency in a January 3, 2011, interview with Muslim science: “[T]oday, it has become the office of the science advisor, the de facto science ministry, the national laboratories, and the key science funding body in the Kingdom. It is kind of like OSTP, science ministry, national laboratories, and National Science Foundation (NSF) in the United States combined.”¹⁵

President Dr. Al-Suwaiyel made reference to the Office of Science and Technology Policy (OSTP) in the United States. This office, established by the U.S. Congress in 1976, advises the president of the United States and senior officials within the Executive Office of the President on the effects of science and technology on domestic and international affairs. The 1976 congressional act authorizing the OSTP to lead interagency efforts to develop and implement sound science and higher education communities, and other nations toward this end.¹⁶ On its website, the agency states its mission is “threefold; first to provide the president and his senior staff with accurate, relevant, and timely scientific and technical advice on all matter of consequence; second to ensure that the policies of the executive branch are informed by sound science; and third, to ensure that the scientific and technical work of the executive branch is properly coordinated so as to provide the greatest benefit to society.”¹⁷

OSTP's initiatives include such disparate subjects as combating climate change, improving science, technology, engineering, and mathematics education, and promoting open data and technical information sharing to “spurring innovation.” The OSTP also has broad authority and responsibility in the process of budgeting and crafting priorities of U.S. research and development funding of federal agencies engaged in R&D activities. It is this dual function KACST and OSTP share in common within their respective countries that makes Dr. Al-Suwaiyel's reference to OSTP so appropriate. Despite the differences in dollar value in the levels of national funding, the work of KACST and OSTP (in addition to other U.S. government funding agencies such as National Science Foundation (NSF) and the U.S. Department of Energy's National Laboratories) in selecting projects that receive funding and advising their most senior leaders of their governments as to how society benefits from the advances in STI flowing from funded R&D is quite similar. Nevertheless, it should be noted that the OSTP is a small part of the U.S. tech community whereas the stature of KACST within Saudi Arabia is comparably much larger.

The Kingdom of Saudi Arabia is firmly positioned among the world's nations that are using advancements in science and technology to confront some of the most challenging problems a country must face. Food and water shortages, inefficient mass energy consumption (over half of electricity generation in Saudi Arabia comes from oil—consuming over a quarter of its annual oil production), structural economic overdependence on oil, and intractable youth unemployment are all national issues the answers to which Saudi officials look partially to advances in STI to provide. The array of program initiatives and policy tools KACST brings to bear in the pursuit of contributing to the resolution of these problems and movement of the Kingdom along its path to a knowledge-based economy is truly remarkable.

From an idea in the mind…a concept for a new business, products and innovative improvements in process technologies or composite material…to design research, prototype production, first-phase manufacturing, full-scale production, and global commercialization, KACST has a direct and facilitating hand in all of it. Some of the most advanced research in the Middle East and the world is occurring inside the Kingdom at KACST and its affiliated program and project sites throughout the country. Usually, when one engages in a discussion about recent developments or news concerning science and technology in Saudi Arabia, KACST invariably surfaces somewhere in the conversation. There are few public or private entities within the Kingdom, perhaps with the exception of Saudi Aramco, which skillfully manages as diverse a mandate.

There are two important overarching functions of KACST and the offices of the vice president that go far in defining the impact the organization is having on the advancement of STI and the path the Kingdom is following toward a knowledge-based economy. The first is the office of the vice president for research institutes that manages KACST's innovation and commercialization sector, which in turn manages the national center for technology development (TDC), the technology innovation centers program (TIC), the national technology incubator program (BADIR) initiative, and the national program for technology parks. Second is the office of the vice president for scientific research support, which manages, among a host of other responsible functions, the Saudi patent office (SPO). A brief discussion of the TDC and its TIC, BADIR programs, and addressing the importance of the SPO is warranted in presenting the fullest view of the public sector's contributions to raising the levels of STI in Saudi Arabia.

KACST conducts extensive scientific research and engages in an array of developmental activity in the discovery and creation of new technologies, especially those that may have industrial and commercial applications. The TDCs are one of the primary tools KACST has at its disposal to bring industry, academia, and government together in the advancement of the Kingdom's interests in STI. Projects proposed and approved under Saudi Arabia's NSTP and NSTIP are focused within those sectors the Kingdom views as having the optimal probabilities of success, given its existing natural resources, home-grown talent, and standing and national competitive advantages. KACST and its TDCs promotes the R&D and commercialization of five sector focus areas: water, oil and energy technology; environment and biology; advanced materials and nanotechnology; information technology (it) and electronics, communications, and photonics (ECP); and technology, space, and aeronautics technology.

The vision of the TDC is to serve as a significant resource of KACST in its support of the development of the Kingdom's national innovative ecosystem (NIE) and to act as a catalyst in the country's transition to a knowledge-based society. The TDC states its mission as:

Initiating plans and implementing programs that facilitate the development of Saudi Arabia's NIE through:

• Facilitating the acquisition and adaption and/or improvement of existing technologies that show promise of successful commercialization in KSA markets.
• Encouraging networks among major parties involved with the development of technology.
• Brokering common research projects with beneficiaries.
• Suggesting research programs to KACST research institutes, according to national need.
• Assisting in the creation and support of technology parks and incubators.
• Helping create technology development projects in industry.
• Supporting technology transfer operations throughout the innovation process, as well as developing and spreading technology.
• Participating in setting standards and specifications and negotiating methods for technology transfer.¹⁸

The TDC's primary strategic planning program areas are: the program for technology incubators (BADIR), which is the chief operator or national incubators specializing in the development and commercialization of innovative technologies in the five strategic areas; the Saudi business innovation research program (SBIR), which supports Saudi businesses through funding innovative research and technologies; intellectual property management program (IPM), which manages the process of intellectual property (IP) development by working with inventors to establish processes, policy, and activities that move IP from conceptualization to commercialization; the technology innovation centers program (TIC), which promotes the creation of research centers within the industrial sector, hosted by Saudi academic institutions that serve the interests of addressing and solving vexing problems of the Kingdom by emphasizing the three major goals of education and training, excellence in research, and knowledge transfer to industry; and the national innovation ecosystem (NIE), which is a collaborative effort between KACST and the Al-Aghar group, a renowned Saudi think tank promoting a knowledge-based society in the Kingdom by engaging all stakeholders in the discovery of creative and strategic options. The NIE is the main framework through which the task of advancing STI in Saudi Arabia is focused on the six pillars of infrastructure, human capital, governance, innovative capacity, networks and attitudes, and finance and capital.

The TDCs and all of their component divisions have produced truly impressive results since beginning its work. Every year, KACST holds various conferences and meetings to introduce the fruits of its research. The products and services that are unveiled at these gatherings further enhance what has already become a much anticipated showing of the Kingdom's growing STI arsenal. Although too numerous to list in this book, a brief listing of a small portion of some of the new products, services, and accomplishments produced by KACST over the years within its five main areas of focus include the following (shown in Table 2.1).

This listing is by no means exhaustive. An examination of press releases, media coverage, and public announcements of new products, services, and accomplishments of KACST over the years is an exercise many Saudis should undertake. Many Saudis, and certainly even non-Saudis familiar with the Kingdom, are unaware of the STI gains in proficiency Saudi public institutions achieve every year. One would expect a considerable level of technological achievement in the downstream petrochemical industry given the prominence oil and gas occupy in the nation's economy. In July 2014, KACST announced that an R&D team at the National Petrochemical Technology Center, an affiliated entity to the Materials Research Institute of KACST, in collaboration with IBM Global, the University of California at Berkeley and the Eindhoven University of Technology in the Netherlands discovered a new class of industrial polymers that could deliver cheaper, lighter, stronger, and recyclable materials, particularly suitable for the electronics, aerospace, airline, and automotive industries.¹⁹ Also in the petrochemicals sector, in August 2013, KACST announced its researchers developed a new foam concrete containing microcarbon materials that increase its resistance to breakage and reduces its thermal conductivity.²¹ There have been many other discoveries and innovations in the petrochemical industry. In fact, SABIC is believed to be the single largest corporate holder of intellectual patents in the Middle East.

Interestingly though, a bit afield from petrochemicals, KACST developers have produced three types of drones made of carbon and fiberglass with increased capabilities to evade radar and reconnaissance equipment. Furthermore, KACST studies continue to augment the Kingdom's knowledge in the area of animal husbandry and infectious diseases. A study released by KACST in July 2014 identified previously undiscovered fever symptoms of unknown origins in a number of domesticated animals inside the country. This study has been of critical importance since one method of human infection is thought to come through contact with infected animals. The deadly contagion of the Middle East Respiratory Syndrome coronavirus (MERS-CoV) has caused the deaths of 298 people since its initial detection in September 2012. Although publicly unstated, many attribute the April 2014 replacement of former Minister of Health Abdullah Al-Rabiah with Saudi minister of labor, His Excellency Adel Faqih, as the health ministry's acting minister to the dramatic and unabated rise in infectious MERS-CoV cases in 2013 and 2014. As the world witnessed the beginning of what the World Health Organization (WHO) called an “international health emergency” in August 2014, the spread of the EBOLA virus in West Africa, and cases spread to other countries, including the United States, continuing research in the area of infectious diseases being conducted in Saudi Arabia is of growing importance to that country and the world.

As the NSTP made KACST primarily responsible for programs that promote education and training R&D, technology transfer, indigenization and development of technology, the spread of technology and the optimization of its use including social benefits, KACST in turn has made the TDC's trade innovation centers program (TIC) the prime dispersal agent for harmonizing the drive to a knowledge-based society between academia and industry. Once fully implemented after phased-in initiation, developmental, and operational periods, TICs are designed to be financially self-sustaining collaborations between Saudi universities and the industrial sector. They will undertake research projects that address problems identified by teams composed of faculty and students within selected universities and engineers from participating companies. TICs will emphasize three major goals: education and training, excellence in research, and knowledge transfer to industry.

As envisioned by KACST, after a period of maturation, the TICs will be expected to: demonstrate that teams of university faculty and students can collaborate effectively with industry on industry-identified problems; increase the level of mutual trust and respect between university faculty and industry; demonstrate actual solutions to selected industry problems; and develop competence in the management of technology, research, and collaborative projects among center faculty, students, and technical staff.²² Under the TIC program, the selection of the academic institutional and industrial participants are through a competitive process with winners and adopted research proposals occurring in the initial five-year period. With this program, KACST's goal is to have created three to five TICs that have produced actual solutions to problems, cultivated competent and experienced individual teams members sought for their unique abilities and successes, and TICs that have contributed to an increased level of trust and mutual respect between university faculty and industry.

Government's role in assisting the commercialization of technology by nurturing start-ups promising new technology and the creation of spinoffs has been done through incubating such activities at least since the early 1950s. Saudi Arabia's most forceful, full-scale, and dedicated entry into the incubation business began with KACST's national technology incubator program (BADIR) initiative. BADIR's vision is: “to encourage, facilitate, and support the establishment and development of a sustainable technology incubator industry in the Kingdom.”²³ Its mission is: “to support organization[s] [sic] that assists individual incubators to foster technology entrepreneurship and the commercialization of technology business opportunities. Those individual incubators will assist entrepreneurs with the transfer of technology created in laboratories and in converting market-driven ideas into business opportunities to exploit local and international markets.”²⁴

The origin of the BADIR program can be traced back to the vision and recognition of His Highness, Prince Dr. Turki Bin Saud Mohammed Al-Saud, vice president of KACST, that the stakeholders of a more technologically advanced and innovative Saudi Arabia should be brought together to discuss and debate what the Kingdom needed to do to strengthen its entrepreneurial ecosystem. Beginning with the first incubator and continuing until today, KACST and the BADIR initiative have evolved by honing its approach to developing an effective and productive technological and entrepreneurial ecosystem. A national technology incubation policy has been established to ensure consistency across all incubators and that the goals of the NSTP and NSTIP are served through the provision of staff training, marketing, shared establishment, and management services.

BADIR focuses on priority technology areas that include ICT, biotechnology, nanotechnology, advanced manufacturing, and energy. The BADIR initiative was launched in January 2008 with the ICT incubator, the first of what is to be five national technology incubators. The ICT incubator became operational in July 2008 and has fostered new developments in computer technology, communications, and software and multimedia architecture. ICT was followed by the biotech incubator in November 2009. This incubator works to develop biological technology through the adoption and development of strategic projects of researchers and doctors that aim to provide advanced medical services supporting the transfer of technology and contributes to the improvement of the Kingdom's health sector. These projects are contributing to advancements in the health care, pharmaceutical, environmental, and agricultural sectors. The third incubator in the advanced manufacturing sector was established in May 2010 and is involved in supporting new discoveries and innovations in advanced industrial materials and their manufacturing.

The BADIR initiative is one of the best-managed and productive public-sector funded programs aimed at supporting entrepreneurship, a knowledge-based society and greater Saudi-led global innovation through the establishment, cultivation, and commercialization of incubators. It is governed by a supervisory board chaired by the KACST vice president for research institutes with representatives from the private sector, technology industries, financial institutions, and government, selected on the basis of their expertise and ability to support the BADIR initiative. Each incubator operates autonomously and is supported by local experts as well as international consultants who provide the day-to-day guidance required to maintain the focus on generating results. Since its creation in 2008, BADIR's results have been quite impressive. It has incubated more than 100 technology projects, created 200 jobs, and trained close to 800 Saudis. The program has created over $150 million of economic activity. A few well-publicized success stories have emerged over the last few years of BADIR-incubated projects that have made it big.

Ms. Latifah Al-Waalan, a Saudi woman and master's degree holder in management of technology from the University of Washington in the United States, presented a proposal to KACST and its BADIR program to develop an automatic Arabic coffee maker and to commercialize the invention. BADIR accepted the application and Ms. Al-Waalan, using BADIR's engineering and manufacturing expertise support system, was able to perfect her specific blend of Arabic coffee and have a coffee machine with an electronic processor designed and made called “Yatooq.” The machine is sold around the world.

Another BADIR success story is that of Mr. Abdullah Al-Zamil and his commercial technology project “Ismi,” which won the 2012 World Bank Award for Business Incubators. Mr. Al-Zamil joined BADIR's ICT incubator in 2008 and began developing Ismi, a technology that provides communications services utilizing the Short Message System (SMS) and other data packaging systems, as well as interactive interchange and mobile applications. The World Bank Award selects the top 50 emerging commercial technologies worldwide. The year Mr. Al-Zamil won the award, his Ismi technology place fourth among more than 750 technology projects that were reviewed from more than 65 countries.

Dr. John Mercer, executive consultant to Mr. Nawaf A. Al-Sahhaf, chief executive officer of the BADIR program, and Ms. Sultana M. Bin Saleh Bin Sultan, project management office director, helped me gain insight into the successes and challenges BADIR faces. These BADIR officials underscored the premise of what constitutes a successful incubator program, namely that the foundation of a good incubator program is one that accepts of the notion that incubator programs are a long-term economic development strategy. The validity of a sustainable program is one that has historical data to demonstrate that it works. To put it simply, Dr. Mercer explains, “It is only when you have lots of graduates is when you have measured economic benefit.”

The first U.S. business incubator is commonly thought to be the Batavia Industrial Center in Batavia, New York, 43.5 miles west of the City of Buffalo. The Batavia Industrial Center was started in 1959 in a warehouse. Since then, there have been thousands of incubators established in the United States and more than 7,000 created worldwide. Most share common characteristics such as offering business that successfully apply to enter an incubator shared support services such as utilities, management, mentoring and coaching consultations, technology commercialization assistance, and testing equipment and facilities.

In Saudi Arabia, many believe that the first real incubator was Saudi Aramco. As we will observe later in this book, many of the Kingdom's most accomplished companies got their start with Saudi Aramco as fairly inexperienced start-ups engaged in a number of oil and gas operations related activities such as the provision of foodstuffs and catering, piping, and air conditioning equipment and services. Saudi Aramco offered these companies advice and support on how to run their businesses in exchange for reliable and consistently delivered vendor and supplier and subcontractor services. Many accept this period during the reign of King Faisal and the start of the Kingdom's Five-Year Development Plans as the humble beginnings of the country's nascent industrial ranks. As recognized by Saudi Aramco:

According to Dr. Mercer at BADIR, the key difference that set BADIR apart from most so-called incubator programs in the Kingdom is that BADIR's program has a narrow focus in respect to the types of technologies it seeks to incubate and goes deep when it comes to the scope of assistance it provides accepted applicants. “BADIR only takes a small amount of clients—64 in BADIR currently—they are divided up into separate industry categories and receive intense support in bringing their technologies and ideas forward,” says Dr. Mercer. Distinguished from BADIR, according to Dr. Mercer, are other incubator and start-up support programs in the Kingdom that are broad in terms of the type of applicants they accept and shallow in terms of the comparative support offered those accepted. These programs, by seeking to reach as many deserving entrepreneurs as possible, are perceived to be reactive in their support of start-ups. This “narrow and deep” approach taken by BADIR versus what is perceived as a “broad and shallow” method has allowed BADIR to post some impressive economic impact statistics within the short time they have been in business.

BADIR has also taken a strong lead in promoting cross-collaboration and networking among all incubators in Saudi Arabia. In 2009, BADIR established the Saudi business incubator network (SBIN). Its motto: “Working together to develop a world class incubation industry in Saudi Arabia” understates its influence among the country's incubators and the work it does in providing a “nurturing, instructive, and supportive environment for entrepreneurs during the critical stages of starting up a new business.”²⁶ The SBIN stresses the importance of enhancing the knowledge base and connections between and among professionals and organizations engaged in the work on incubation. Incubator developers, managers and staff, consultants, academics, and those within the public and private sectors are all constituents. The question as to whether there is enough coordination among the Kingdom's institutions that facilitate entrepreneurship and startups is a reoccurring one in this book. The SBIN seems to be one of the few publicly funded coordinating entities in existence.

KING ABDULLAH UNIVERSITY FOR SCIENCE AND TECHNOLOGY (KAUST)

First-time initiatives emanating from Saudi Arabia's kings that tend to draw national and international attention are rarely described as bold, given their conservative approach to governance and the senior citizen status that virtually all of them have shared. In the fall 2007, however, when ground was broken for the construction of the 25-year-old dream of the late Saudi King Abdullah Bin Abdulaziz Al-Saud, a world-class graduate research university located on 9,000 acres in Thuwal, Saudi Arabia, the consensus at the time viewed the development as a resolutely courageous move toward a knowledge-based society. Five years after its inauguration, King Abdullah University of Science and Technology (KAUST) is already approaching fulfillment of King Abdullah's dream of having KAUST become one of the world's leading scientific research universities contributing to the furtherance of discoveries and advancement of technologies that facilitate resolution of problems and challenges obstructing full economic development and social prosperity for Saudi Arabia and the world.

The multifaceted purpose of KAUST is embodied in its stated mission: “KAUST integrates research and education, leveraging the interconnectedness of science and engineering, and works to catalyze the diversification of the Saudi economy through economic and technology development.²⁷ KAUST centers itself on the pursuit of academic excellence, scholarship, diversity in faculty, staff and student body, and sustained relevance of its research to the challenges faced by the Kingdom and the world. The university has attracted some of the most accomplished faculty members from around the world and graduate degree candidates from equally diverse parts of the globe. KAUST offers graduate degrees through its three academic divisions: chemical and life sciences and engineering (CLSE); mathematical and computer sciences and engineering (MCSE); and physical sciences and engineering (PSE).

KAUST conferred its inaugural PhD degrees on December 14, 2012. Among those graduates receiving degrees were engaged in research areas of computational modeling of materials systems, Red Sea research, plant stress genomics, and mathematical techniques for geophysical subsurface imaging. In addition to doctoral degrees, nearly 200 master's degrees were conferred in 2012. These graduates as well as students and subsequent graduates have benefited from the many collaborations and cooperative initiatives KAUST has entered into since its creation. The institution has initiated research partnerships with institutions such as Woods Hole Oceanographic Institution, Institut Francais du Petrole, National University of Singapore, American University of Cairo, Hong Kong University of Science and Technology, Technische Universitat Munchen, University of California at San Diego, IBM, GE Global Research Center, King Abdulaziz City for Science and Technology, King Fahd University of Petroleum and Minerals, and Saudi Aramco.

KAUST has amassed equipment and built laboratories that represent the highest levels of technological capability and quality to be found in any academic or research institution in the world. State-of-the-art research equipment and provisioned laboratories operational within KAUST's walls are permitting expert staff scientists, faculty, and graduate students to pursue some of the world's most advanced research. The core labs and major facilities in KAUST operate six core labs and several workshops containing advanced analytical, computational, and other research platforms in the areas of laboratory analytics; biosciences and bioengineering; coastal and marine resources; imaging and characterization; nanofabrication and thin film; supercomputing; visualization; and advanced design and manufacturing.

KAUST is home to the Middle East's largest and most powerful supercomputer, the Shaheen (Peregrine Falcon) II supercomputer, an IBM System Blue Gene supercomputer capable of analytical computations at a theoretical peak of 5.536 petaflops. A petaflop is equal to about one quadrillion calculations per second. One estimate suggests it would take a human about 32,000,000 years to complete the same task. And, much to the academic provisioning prowess and vision of KAUST, in 2015, for the first time in history, the TOP500 project, which was launched in 1993 and biannually lists the most powerful supercomputers, ranked a supercomputer based in the Middle East (KAUST's Shaheen II Peregrine Falcon) on the list of the world's top 10 most powerful computers.²⁸ The British Broadcasting Corporation (BBC) reported that “Kaust has spent about $80m (£51m) buying, installing, and operating the Cray machine, which is about 25 times more powerful than the machine it is replacing.”²⁹

Besides the matriculation of graduate students and their provisioning with the very best academic environment, laboratories, equipment, and faculty available, KAUST's accomplishments are also viewed through the prism of economic development. KAUST states its mission as:

[T]o contribute to the transformation of Saudi Arabia to a knowledge-based economy.

• Be a model—prove that university research can deliver new products and be the basis for forming new companies in the Kingdom.
• Be a catalyst—share the approach with others and validate the model with many technologies and companies.
• Focus on what people can do now—find ways to help start and grow technology-based businesses in the Kingdom today.
• Be a technology magnet—attract major corporations and entrepreneurs to locate their R&D facilities and businesses at KAUST.³⁰

KAUST has been especially forceful in promoting entrepreneurship and the pursuit of innovative technologies that serve the development goals of Saudi Arabia and aid the world in the resolution of its problems. It has joined hands with the Saudi private sector and with companies from around the world to greatly explore the possibilities for research and development being realized from KAUST and its programs and curriculum. The university's economic development role is fulfilled through its five units: (1) the KAUST industry collaboration program (KICP); (2) research park and innovation cluster (RPIC); (3) technology transfer and innovation (TTI); (4) new ventures and entrepreneurship (NVE); and (5) the technology application and advancement group (TAAG). From these economic development operating units, KAUST addresses the needs of individuals and businesses requiring assistance, collaboration, and support in transforming new ideas for products, services, and technologies into new businesses that in turn create new markets and jobs for the Kingdom.

The KICP has attracted broad interest from Saudi Arabia's private sector and international companies operating in the Kingdom. KICP states its value proposition as:

• Builds, nurtures, and manages industry relationships with KAUST and maximizing the value of industry-KAUST partnerships.
• Acts as the interface between industry and KAUST and helps align industry partners' R&D needs with the needs and capabilities of KAUST.
• Serves as a link between industry and economic development programs that include the technology transfer and innovation, research park and innovation cluster, seed fund program, new ventures, and the entrepreneurship center.
• Serves as an interface between industry and KAUST's research enterprise including faculty, research centers, and KAUST's academic partners.
• Facilitate partners' sponsored research agreements with the office of research services (ORS).
• Provides an ideal platform for recruitment of KAUST students and graduates for internships and job placements, respectively
• Links industry with the KAUST's university development for donations and sponsorships.

Along with KICP, the center industry affiliates program (CIAP) sits at the forefront of leveraging KAUST's R&D program and the university's technological resources and human talent base to serve the interests of companies seeking to optimize their commercialization output. The CIAP is a membership-based program whereby industry partners select a specifically designated research theme and contribute their knowledge of regional and global markets, thereby helping to set the center's direction and strategy.³¹

Offering three levels of industry partner memberships from its elite strategic partner status, down through its associate and honorary levels, these programs offer virtually unlimited access to on-campus engagement with the university's staff, physical resources such as laboratories, testing and verification facilities, and interface with KAUST's international network of research institutions. Businesses immediately recognizable on the global corporate stage have become a part of the KICP program. They include the following corporations:

Mars, GE, Total, Boeing, Saudi Aramco, Veolia, Lockheed Martin, Sumitomo Chemical, IBM, Saudi Bin Laden Group, Dow, Rolls-Royce, Halliburton, Siemens, BAE Systems, Alstom, Xenel, Shell, and SABIC.

In September 2014, Boeing opened the Boeing research and technology (BR&T) office in partnership with KAUST to develop aerospace technologies and to support the Kingdom's efforts to establish knowledge-based programs and expertise.³² For more than 68 years, Boeing has enjoyed almost iconic American brand status within Saudi Arabia and has built upon its commitment to the Kingdom through various partnering efforts in a wide range of projects benefiting the Kingdom such as in the areas of human resources and capital building, transportation, energy and technology knowledge transfer.

The Dow Chemical Company (Dow), a founding member of KICP, has a comprehensive cooperative agreement with KAUST and KICP that established Dow's Middle East and Africa R&D center on the KAUST university campus. The agreement enhances Dow's offering of academic and professional opportunities within Saudi Arabia. Under the terms of the agreement, Dow and KAUST collaborate on a range of academic research programs suited to KAUST's areas of excellence in research and education.³³

Another founding member of KICP is SABIC, one of the world's largest producers of petrochemicals. There is no company having a greater impact on the future of the petrochemical industry worldwide than SABIC. SABIC's size, international investments, state-of-the-art research capabilities, and its focus on the evolution of consumer products development have placed the company at the pinnacle of the international petrochemical industry. It has a formidable global manufacturing presence. In Asia alone, SABIC has nine manufacturing centers in China, Japan, South Korea, and Southeast Asia. SABIC Innovative Plastics has grown operations to include facilities in 35 countries and six global technology centers that are yielding some of the most advanced production technologies and consumer products in the world.

SABIC has also made a considerable investment in its presence at KAUST. In 2013, SABIC launched one of four new technology and innovation centers designed to upgrade its global technology, applications, and solutions. SABIC's corporate research and innovation center (CRI) at KAUST is using SABIC's existing innovation systems to develop new technologies, improve its manufacturing processes, and contribute to a sustainable environment with Saudi communities and world communities. The collaboration between SABIC's corporate research and innovation center (CRI) and KAUST has already yielded scientific breakthrough technologies and discoveries. One example of such successes has been SABIC's work with KAUST's functional nanomaterials and devices group in the discoveries of new innovations in flexible electronics.

Led by Dr. Husam Alshareef, professor of materials science and engineering at KAUST, the collaboration with SABIC has produced five international patent filings and a number of high-impact journal papers. Published research from their collaborative efforts has revealed developments related to polymeric electronic memory, useful in printed and flexible electronic applications such as radio-frequency identification (RFID) tags, storage capacitors, and sensors. The all-polymer memory devices are attractive to the flexible printed electronics community, as they are low cost, solution processed, scalable, highly transparent, flexible, and fabricated at very low temperatures.

Further examples of innovative technologies, new products, and scientific discoveries resulting from KAUST teaming up with Saudi private industry are growing annually. These examples include a 2012 KAUST signed memorandum of understanding (MOU) with the National Prawn Company (NPC), a Saudi company founded in 1982 and based in Al-Lith, Saudi Arabia. The 2012 MOU was signed following a visit by a senior delegation of KAUST faculty members including those from KAUST Chemical and Life Sciences and Engineering; Red Sea Science & Engineering; Computational Biosciences; and the Water Desalination and Reuse Centre. The largest producer of shrimp in the Middle East, NPC offers a wide variety of fish, seafood, and marine by products as chemical and pharmaceutical ingredients to countries around the world. The MOU has led to a variety of aquaculture research projects in the areas of shrimp genome research, shrimp disease research, and research on the impacts of aquaculture and agriculture on the Red Sea. After an outbreak of white spot syndrome virus (WSSV) in 2011, causing diseased shrimp resulting in severe damage to shrimp aquaculture worldwide, including Saudi Arabia, on May 18–19, 2013, KAUST's Center for Desert Agriculture (CDA), together with the National Prawn Company (NPC) and the Saudi Aquaculture Society (SAS), convened a workshop on the control of the WSSV of shrimp. The purpose of the workshop was to bring together leading scientists engaged in WSSV research and other relevant fields to assess the current state of knowledge about the virus, identify limitations of current control strategies, and devise new biological approaches to eradicating the disease.³⁴

New discoveries at KAUST extend beyond plastics and animals to even encompass plant research. In 2011, the university announced its team of researchers developed new genomics molecular scissors. In a paper published in the “Proceedings of National Academy of Sciences, USA” (PNAS) on January 24, 2011, Dr. Magdy Mahfouz and a research team articulated a new way of genetically engineering plants to tolerate aggressive environments and improve their quality, yield, and resistance to diseases. The development of this “repair tool” or “molecular scissors,” composed of protein, precisely locates on the genome where it is to be cut using a genetic “postcode” and subsequently deletes, adds, or edits the gene for the desired outcome. It has profound implications not only for plant biology but for human DNA testing and genetic correction therapy.³⁵

INDUSTRIAL CLUSTERS PROGRAM (IC), SABIC, AND SAUDI INTELLECTUAL PROPERTY

The strategy in Saudi Arabia of having academia hold hands with the private sector to produce positive economic development gains is becoming firmly embedded in the Kingdom's macro and microeconomic approach guiding itself to a knowledge-based economy. Plant biology may not be a priority for the country, but the same collaborative approach that brought on the SABIC and NCP innovations is helping the Kingdom steer toward a more efficient and rational economic use of its resources by concentrating government, industry, and its well-established and growing regional and global academic excellence in resources in a unified direction. This is embodied in the Kingdom's national industrial strategy (NIS) and its sister program, the national industrial cluster development program, now commonly known as the industrial clusters program (IC).

The promulgation of the NIS was made official by the Saudi Council of Ministers' adoption of its Resolution Number Thirty-Five, dated June 25, 2009 (7/2/1430 AH). The aim of the NIS has been to achieve measurable levels of diversification of the Saudi economy away from being powered by the inherited wealth of the country's natural resources toward a much enlarged capacity for economic growth driven by expanded production of goods and products from select key industries. Through a set of carefully defined objectives and outcomes, the NIS ambitiously set specific rates of achievement to be realized by the end of the year 2020. The NIS strategy set out to accomplish the following:

• Increase industry's contribution to the gross domestic product to 20 percent.
• Increase industrial value-added activity to three time the current level.
• Increase industrial exports share from the current rate of 18 percent to 35 percent.
• Increase technology-based exports from the current rate of 30 percent to 60 percent.
• Increase Saudi industrial labor force from the current rate of 15 percent to 30 percent.
• Upgrade the Kingdom's status to rank at least among the best-performing 30 industrial countries by 2020, improving its annual ranking by two places.

The NIS was one of a number of planning initiatives governing the focus and direction the Kingdom wanted its government-supported economic, academic, and research organizations to embrace and maintain. In Saudi Arabia, when the government decrees policies that establish the direction its economy will take, it not only sets the rules everyone is expected to follow, it also sets a tone. This tone is picked up by the Kingdom's citizenry…individual and corporate. In the case of government directives affecting the private sector, it is most often adopted by corporate leaders and incorporated into their own development strategies when done so profitably. There is no doubt that the compelling rationale for this self-alignment to government policy by the nation's private sector is that, on the whole, Saudis are very patriotic and its business people want to see the nation not only prosper but take the right directions when it comes to its development. The IC is a big part of integrating the private sector into laying the groundwork for establishing and expanding innovative production and manufacturing industries within Saudi Arabia by optimizing the country's use of its strategic resources and competitive positions.

The IC is supervised by two government agencies, the ministry of commerce and industry and the ministry of petroleum and mineral resources. Its main objectives are to act as a catalyst for the development of five targeted industrial sectors:

1. Automotive
2. Minerals and metal processing
3. Solar energy
4. Plastics and packaging
5. Home appliances

Acting as an economic development expert with sector focus, the IC facilitates potential investor expansion into the targeted industries and constantly seeks out ways to maximize the investor's environment to foster successful market ventures. The main IC partners are Saudi Aramco and SABIC. They are the lead players, along with a host of Saudi and foreign industry sector investors operating in the Kingdom's industrial petrochemical plant complexes such as Jubail and Yanbu, Rabigh, and other locations in the country. World powerhouses in the petrochemical and refining business such as SABIC, Al-Kayan, Chevron-Phillips, Dow Chemical, Saudi Aramco, Sumitomo Chemical, ExxonMobil, National Industrialisation Company (Tasnee), Saudi International Petrochemical Company (Sipchem), and Shell Oil Company are just a sampling of private-sector investors contributing to the growing diversification of Saudi Arabia's industrial strength.

In December 2013, in Boston, Massachusetts, Saudi Aramco opened the first of three planned U.S.-based research and development centers intended to enlarge its global research capabilities. The Aramco Research Center, the named new center, will develop new technologies that meet the challenges of the upstream and downstream industries. The Boston research center, along with the other two centers to be established in the United States in Detroit and Houston, will join Saudi Aramco's other research centers in Saudi Arabia, the Netherlands, France, Korea, and China.³⁶

SABIC began to take its own path toward establishing research and development centers well before Saudi Aramco. There are very few companies these days having greater impact on the future of the petrochemical industry worldwide than SABIC. Its size, international investments, state-of-the-art research capabilities, and its focus on the evolution of consumer product development have placed it at the pinnacle of the international petrochemical industry. SABIC's rise to global prominence has been recognized as much for its skillful selection of its joint venture partners as for the expansion of its formidable worldwide manufacturing presence. The company's subsidiary in Asia, SABIC Asia, includes nine manufacturing centers in China, Japan, Korea, and Southeast Asia. SABIC Innovative Plastics, the subsidiary most responsible for new technologies and products in plastics, has grown its operations to a presence in 35 countries and six global technology centers that continue to yield some of the most advanced production technologies and consumer products in the world. Recent SABIC investments in cracking and upstream operations around the world have afforded SABIC, and, in turn, the Kingdom of Saudi Arabia, an uncommon diversification throughout the entire hydrocarbon production chain and the ability to offer increasingly revolutionary downstream products.

SABIC's relentless pursuit of excellence in the discoveries of innovative technologies and products is often done with academic institutions such as KAUST and King Saud University (KSU), giving tens of millions of dollars in various projects that link SABIC and its corporate partners with academia. SABIC established the SABIC polymers chair, local scholarship programs for post-graduate students (both master's and doctoral), and the innovation center, which conducts advanced research and application production activities in plastics and petrochemicals.

In closing this chapter on innovation in the Kingdom, a discussion on Saudi technological discovery and invention would not be complete without looking in on the patent environment. As mentioned earlier, the Saudi patent office (SPO), housed within KACST, is the receiving agent and caretaker for the Saudi storehouse of Patents, Layout Designs of Integrated Circuits, Plant, Varieties and Industrial Designs from the instance of application filing to grant. The SPO is an office run by its director general, Mr. Sami Alsodais. He is supported by 123 highly trained, experienced, and hard-working executive and support staff members. In my interview with Mr. Alsodais for this book, the director general stressed the importance of several aspects of the work of SPO according to its strategy which aims to improve the office's services, the efficiency of its operations and skills, the capabilities of SPO's personnel, and raising IP awareness of all national institutions and individuals engaged in inventing tomorrow's technologies and products. SPO personnel include 50 examiners, and a number of legal advisors, patent informational specialists, and administrative workers. They receive periodic and programmed training by the World Intellectual Property Organization (WIPO), the European Patent Office (EPO), the United States Patent and Trademark Office (USPTO), the Korean Intellectual Property Office (KIPO), the State Intellectual Property Office of the P.R.C. (SIPO), and other institutions concerned with patents.

In 1982, KACST was notified of Saudi Arabia's accession to membership in WIPO by royal decree. SPO began operations in 1989 and the first Law of Patents was issued by the royal decree No. (M/38) dated January 18, 1989, and was modified in 2004 in compliance with the terms of the Kingdom's accession to membership in the WTO. In the early years of the SPO, it was heavily criticized for its slowness in processing patent applications. At the time the patent laws were modified in 2004, the SPO had granted only 615 patents since the year of its creation. Much to the credit of His Highness Prince Dr. Turki Bin Saud Mohammed Al-Saud, and Dr. Abdulaziz M. Alswailem, the SPO has revamped and greatly increased its efficiency. The streamlining of the patent application and review process has been occurring since 2010. Today, the SPO has granted more than 4843 patents since its establishment and received 2406 patent applications in 2015.

In regard to the average time a patent application takes from its filing to its final decision, the streamlining of the SPO and its administrative processes has paid dividends. Historically, this time length has been as much as five years or longer. The average time now in the Kingdom is between one and two years. This is well in line within modern economies such as the United States, the United Kingdom, and South Korea, where the time length averages 18 to 36 months.

Since the SPO began operations, the majority of patent applications filed with SPO, 85 percent have been by foreign companies. In 2015, patent filings by Saudis have increased dramatically to increase to 30 percent of all patent applications filed by Saudis nationals. Director General Alsodais credits this increase to raising IP awareness among the public and the enhancement of filing procedures and developing an e-filing system. According to Mr. AlSodais, the SPO's usage of other communications mediums, including social media, has bolstered its efforts to educate the public concerning patent registration and respecting IP rights. A SPO short film on the importance of patent registration and how to commercialize inventions has been seen by 285,000 viewers. SPO organized workshops are also now delivered via videoconferencing as well.

The SPO has also advanced its client services system to include an e-filing system, live chat and callback customer service, and has offered an Internet patent application fee payment option.

The world is taking note of the advancements in innovation in the Kingdom through the SPO. The 2012 Nature Publishing Index (NPI), a global catalog of the world's research output through following published primary research articles, noted Saudi Arabia's ascension among the ranks of innovating nations. The NPI, begun in 2009, tracks research accomplished within a multitude of sources, including government research institutes, universities, and private sector companies. Saudi Arabia's performance in the NPI registered a 140 percent annual average increase between 2008 and 2012 moving the Kingdom seven places up in the ranking to forty-first place on the NPI 2012 index.³⁷

In 2013, the Kingdom strengthened its bona fides within the world intellectual property rights community by joining another international cooperative patent organization. In an article appearing in WIPO magazine, Director General Al-Sodais stated:

With a world-class patent protection system in place, innovators and inventors in Saudi Arabia have the regulatory environment, comparable with any of the world's modern economies, to have their inventions and discovered technologies benefit the Kingdom for years to come.

It is to Saudi Arabia's family-owned businesses and the role they play in the Kingdom's developing economy that we now turn in Chapter 3.