Introduction
The Kingdom of Saudi Arabia is on a transformational path socially and economically. These developments have so far been facilitated by national development visions and plans, each setting goals and reporting progress towards the end. The most recent programmes are the National Transformation Program 2020 and Saudi Vision 2030 that seek both economic development and sustainability (Mitchel and Alfuraih, 2018). The KSA intends to become a global economic powerhouse and to diversify its economy to reduce the reliance on natural resources. Among the ways in which the transformation is pursued is through education and supporting institutions such as research and innovation centres.
One of the newest institutions in the KSA is King Abdullah University of Science and Technology (KAUST), an independent research university seeking to drive the KSA economy forward through supporting innovation and entrepreneurship. KAUST is built on the ideas of scientific development and sustainability that align with both the Saudi Vision 2030 and the Global Sustainable Development Goals (SDGs). KAUST’s main mission, as explained by Adenle and Alshuwaikhat (2017), is sustainable development. With such an institution, a country like the KSA could benefit enormously in quest of its development objective. The question that will be answered in this essay is how the KSA can make the best of KAUST. The theoretical foundations of this paper will be the role of institutions and research and innovation centres in the economy. Making the most of KAUST will, therefore, involve exploiting the scientific research and innovation capabilities it offers to boost entrepreneurial and economic development in the country.
Role Institutions, Research and Innovation Centres
Literature has established that entrepreneurship and innovation are a critical basis for competitive advantage and the pursuit of sustainable business growth. According to Maritz and Donovan (2015), entrepreneurship and innovation also drive economic activity and national wealth. Countries seeking to boost their economic performance are encouraged to embrace these two concepts and to integrate them into the education system. Universities today are among the most important institutions supporting entrepreneurship and innovation not only through courses but also through collaborations with the country’s corporations and entrepreneurs. The institutions can serve as a body of knowledge accessible to businesses and individuals pursuing commercial activities.
Studies on the importance of university education for entrepreneurial activity have observed that higher levels of education are associated with greater business success. The role of universities in entrepreneurial development has been examined by Davey, Hannon and Penaluma (2016) who explain that universities are a vital aspect in creating and continuing the development of entrepreneurial attitudes in a country. Studies cited by Davey, Hannon and Penaluma (2016) have drawn a link between university education and the interests in entrepreneurial activity (44% among the 15-24 year-olds). Additionally, statistics have indicated that entrepreneurial success is higher among university and college graduates as compared to those of lower education levels. For example, businesses established by college and university graduates record over 25% more sales than those of highschool drop-outs (40% more sales for post-graduate degrees). With these findings, Davey, Hannon and Penaluma (2016) point at the need to integrate entrepreneurship education within universities. The argument here is that a country can indeed rely on such institutions to promote economic growth.
Besides being educational institutions, universities can serve other purposes also geared towards entrepreneurial development. Most importantly, institutions can be research support and technology transfer centres for assisting entrepreneurs through business incubation (Zarate-Hoyos and Larios-Meoño, 2015). Throughout their history, universities have been regarded as bastions of learning and knowledge creation, as well as collaboration. In many of the developed countries like the United States, businesses have been known to apply for collaborative partnerships with the universities with such initiatives used as fora for interaction among the corporate and academic professionals. Additionally, such initiatives have been used as business incubators where the government offers tax relief benefits such as income waivers, corporate taxes, and property taxes among others. The goal of incubators is to nurture businesses until they are full-fledged and ready to stake a claim on the domestic and global market. The universities can learn from the corporate professional about the current business environment and adapt their training courses accordingly. Such mutual benefits are ultimately reflected in the high rate of business and entrepreneurial growth.
With the rapid advances in technology, entrepreneurship will often require entrepreneurs to be innovative and creative. Teaching entrepreneurship in colleges and universities, according to Al Qudah (2018), directly enhances creativity and innovation among the entrepreneurs. Countries seeking economic transformation will require the support of learning institutions and other research and innovation centres. In a transitional economy, the entrepreneurial culture will need to be developed through instilling behaviours and beliefs that support positive attitudes towards entrepreneurship. Entrepreneurial culture in a transitional context is examined by Osowska (2016) who express that development of an entrepreneurship culture require changing those cultural variables supporting entrepreneurship. The argument here is that the institutions will be the best place to start where learners and other practitioners can learn, practice, and experience entrepreneurship.
Making Better Use of KAUST
Entrepreneurship Education
KAUST hopes to offer the much-needed entrepreneurship education in KSA to help businesses grow and to help the country pursue its vision 2030. As mentioned earlier on, universities have had to transform to accommodate the demand for entrepreneurial education while other entrepreneurship universities are created to fill the gaps (Pogodaeva, Zhaparova and Efremova, 2015). Entrepreneurship education in a transitioning economy like KSA will go a long way in giving the country a competitive edge. Science and technology are today’s major entrepreneurial areas, and education in these fields are desirable for a country hoping to become an economic hub of the world. As mentioned earlier on, KAUST hopes to create a legacy of Islamic science, and the benefits of the science will only be felt if science drives entrepreneurial growth. The bottom line, therefore, is that KSA can exploit the capabilities and resources offered by KAUST to develop entrepreneurial education to drive the growth of entrepreneurship activity.
Apparently, boosting entrepreneurship in the KSA will mean redesigning the entire economic outlook of the country. The country will need to become a major manufacturer and producer of goods and services that can be marketed globally. Economists such as Krugman (1991) describe a model for economic change and explains what would bring about a sudden change. The example presented by Krugman (1991) is that of California, which was a resource-based economy with limited manufacturing and a small local market to support the industry. The discovery of oil changed the situation and explosive growth resulted. However, the KSA would be facing the opposite situation; that is – moving away from oil resources to an enterprise-based economy. This is where the role of the government sets in to support the economy. According to Stiglitz (2000), a successful government intervention in promoting trade and industry was achieved in the 18th century in what the French economics termed as mercantilism. KAUST may not be a government institution, but governmental support and/or collaboration may be needed to help the country benefit from the entrepreneurship efforts of the organization.
Research and Development
As a transitioning economy, the KSA could benefit from research and development capabilities afforded by KAUST. The endowment of KAUST makes it possible for the institution to invest in research and development practices and infrastructure that the KSA economy can use to boost economic activities. The institution seeks to employ over 200 professors from across the world to help students and researchers accomplish their work. KAUST acts as an independent research centre and will accumulate knowledge needed to develop the Saudi economy. Entrepreneurship is seen as a key economic development component, and research and development are the way to boost entrepreneurial activity. KAUST can be a pioneer in research and development in KSA and help the country realize the benefits of research and development as explained by Okokpujie, Fayomi and Leramo (2018). In essence, KAUST is an institution capable of driving the economy’s monetary growth.
KAUST has the capacity to deploy innovative resources towards reshaping the economy. Research and development may also include economic research intended to formulate an economic plan for the country. In essence, such plans would majorly entail forecasting the outcomes of new economic approaches. With the resources at its disposal, the organization can carry out this task effectively ad produce forecasts that work. Economists like Silver (2013) explain that many forecasts fail because of overconfident. The economic forecasters “get more fthan people in most other profession, but they haven’t chosen to correct for their bias towards overconfidence (Silver, p. 183). KAUST has the rght professionals to drive the KSA’s economy which could use efficient forecasts to map its transforming economy.
Business Incubation and Innovation Centre
While research and development and entrepreneurial education lay the groundwork for entrepreneurial activity, a more practical use of an institution like KAUST will be business incubation and innovation centre. The theoretical framework presented above indicates that one of the key roles of institutions is acting as business incubation centres where businesses are nurtured (Zarate-Hoyos and Larios-Meoño, 2015). Incubating business is a direct contribution in that KAUST will help the entrepreneurs develop business ideas and models and transform them into real businesses competing in the Saudi and global market. Essentially, such businesses would be supported by the wealth of knowledge availed by the institution. The most important point to note, however, is that the advances in technology have led to transformations in business models and structures with the new models offering greater operational efficiencies that drive competitiveness. Ecommerce, for example, is slowly replacing the traditional businesses where cost savings and the ability to offer better prices drive up growth exponentially. An example from an emerging economy like China, Alibaba, can help explain the need for innovative business models.
As an innovation centre, the Saudi economy can use the resources and capabilities of KAUST to experiment with innovations. KAUST start-ups can serve as innovation hubs for entrepreneurs in KSA who intend to make their business ideas into reality. The mission of KAUST is to plant the seed of an innovative ecosystem in the KSA through a network of start-ups, investors, and entrepreneurs all jointly committed to helping great ideas succeed. Such efforts are what the economy needs during the transitional stage characterized by uncertainty.
Lessons for Sustainability Development
The founders of KAUST are aware of the need for sustainable development. According to Adenle and Alshuwaikhat (2017), sustainability is the main mission of KAUST meaning the construction and running of the institution is aligned with the sustainability goals. Saudi Vision 2030 incorporates SDGs and the economic transformation taking place is intended to make the Saudi economy sustainable. KAUST has knowledge and experience regarding how a sustainable institution can be developed and operated. Focus on aspects such as energy consumption, carbon footprint, and environmental protection rules supreme both in KAUST’s mission and the KSA’s development goals. The Saudi economy can learn and use some key lessons offered by KAUST, which could be serving as role model.
Conclusion
KAUST is founded at a time when the Saudi economy needs leadership and inspiration and when entrepreneurial activity is considered to be the lifeline of the country’s future. The mission and vision for KAUST are to help entrepreneurs grow their start-ups and to help KSA achieve its vision 2030 goals. As such, the Saudi economy needs to find ways to make the best of the institution. To understand how KSA can do that, a theoretical background on the role of institutions in economic, entrepreneurial, and innovation development has been presented. Four ways to make the best of KAUST as discussed in the paper are using KAUST as a research and development centre, entrepreneurship education centre, business incubation and innovation centre, and as a model for sustainable development.
Reference List
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