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Systems of innovation, diversification, and the R&D trap: a case study of Kuwait

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  • Arman, Husam
  • Iammarino, Simona
  • Ibarra-Olivo, J. Eduardo
  • Lee, Neil

Abstract

The relationship between research and development (R&D) investment and economic development is well established. Yet, at a global scale, the resource-rich countries of the Gulf Cooperation Council are consistent outliers in this relationship, combining rich-world national incomes with R&D expenditure of developing countries. This paper uses a case study on Kuwait to illustrate a particular form of developmental trap, a version of the resource curse, which makes it irrational for private business firms to invest in R&D and innovation. Based on an analysis of the literature and secondary data, focus groups, and an original survey of large manufacturing firms, we argue that a narrow focus on R&D-led diversification of economic activity ignores the systemic problems faced by Kuwait and, particularly, the unsuitable supply of skills and capabilities provided by the national education and training system.

Suggested Citation

  • Arman, Husam & Iammarino, Simona & Ibarra-Olivo, J. Eduardo & Lee, Neil, 2022. "Systems of innovation, diversification, and the R&D trap: a case study of Kuwait," LSE Research Online Documents on Economics 112209, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:112209
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    1. Liang Zhao & Lifei Xu & Ling Li & Jing Hu & Lin Mu, 2022. "Can Inbound Tourism Improve Regional Ecological Efficiency? An Empirical Analysis from China," IJERPH, MDPI, vol. 19(19), pages 1-19, September.
    2. Jianwei Zhang & Heng Li & Guoxin Jiao & Jiayi Wang & Jingjing Li & Mengzhen Li & Haining Jiang, 2022. "Spatial Pattern of Technological Innovation in the Yangtze River Delta Region and Its Impact on Water Pollution," IJERPH, MDPI, vol. 19(12), pages 1-20, June.

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    More about this item

    Keywords

    R&D; innovation systems; diversifiication; resource curse; Kuwait; Kuwait Programme Academic Collaboration Grant from the LSE’s Middle East Centre;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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