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Knowledge Economy Transfer Channels MENA - Focus Jordan Case Study

Knowledge Economy Transfer Channels MENA - Focus Jordan Case Study

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    Case study on knowledge transfer to jordan 2012 bsaiso r Case study on knowledge transfer to jordan 2012 bsaiso r Document Transcript

    • Knowledge Economy (KE) for Growth and Employment in the MENA Region Case Study on Knowledge Transfer (KT) to JordanConsultantReem N. Bsaiso EIB PJ Contract CC4459/PO43610
    • Case Study on Knowledge Transfer to JordanTable of Content Table of Content ............................................................................ Page 2 Acronyms ....................................................................................... Page 3 Tables & Figures ........................................................................... Page 4 1. Identification of Key Drivers and Enablers for Knowledge Transfers and Absorption in International Literature ....................................... Page 5 (1500 words) 2. Situational Analysis of The Knowledge Transfer Channels in the MENA and Recommendations .................................................................. Page 9 (1500 words) 3. Deduction and Assimilation Based on Findings & Enabling Factors for Knowledge Transfer in Jordan (A Case Study) ........................... Page 16 (4000 words) - Executive Summary .......................................................... Page 16 - Jordan Case Study ............................................................ Page 17 - Gaps ................................................................................... Page 31 - Recommendations ............................................................. Page 32 4. Acknowledgements ....................................................................... Page 34 |Page 2 of 34|
    • Case Study on Knowledge Transfer to JordanAcronyms CBJ: Central Bank of Jordan DoS: Department of Statistics FDI: Foreign Direct Investment FET: Fulltime equivalent GoJ: Government of Jordan GERD: Gross Domestic Expenditure on Research and Development ICT: Information and Communications Technology IPR: Intellectual Property Rights. JD: Jordanian Dinars JIB: Jordan Investment Board KE: Knowledge Economy MoICT: Ministry of Planning ICT MoPIC: Ministry of Planning and International Cooperation PWD: People with Disabilities R&D: Research and Development RDI: Research, Development and Innovation S&T: Science and Technology |Back| |Page 3 of 34|
    • Case Study on Knowledge Transfer to JordanTables and Figures International Note (1) FDI Enablers MENA Table (1) Inward FDI Table (2) Outward FDI Figure (1) KE Values Figure (2) KE Index Figure (3) Public Education Expenditures Figure (4) PCs, Mobiles & Broadband Figure (5) Tunisia - Trade Flows in ICT Goods Figure (6) Egypt - Trade flows in ICT goods Figure (7) Jordan- Trade flows in ICT goods Jordan Table (3) Economic Indicators Table (4) Budgetary Central Government Table (5) Sectors contribution to GDP Table (6) Population Employment Table (7) Int. Students Mobility Table (8) Int. Students Mobility per Host Figure (8) Central Government Budget Figure (9) Trade Relationships Figure (10) Bilateral Trade Figure (10) Bilateral Trade Figure (11) FDI Inflows and Outflows Figure (12) Investment Projects Figure (13) Global Competitiveness Index Figure (14) Students Distribution Figure (15) Jordanian Students in Higher Education Note (2) Doing Business Note (3) Justice, Natural Resources Note (4) Madrasati School Initiative Note (5) King Abdulla Awards Note (6) iPARK Note (7) ICT4D Note (8) Yahoo Acquires Maktoob |Back| |Page 4 of 34|
    • Case Study on Knowledge Transfer to Jordan1. Identification of key drivers and enablers for knowledge transfers and absorption in International Literature |Back|Todays global economy is one in transition to a knowledge economy (KE)1 focused on theproduction and management of knowledge where knowledge is a product; usingknowledge technologies where knowledge is a tool, to produce economic growth and jobcreation. Within interconnectivity and globalization settings, knowledge resources areas critical as economic resources and the application of knowledge is key for growth;where organizations and people acquire, create, disseminate and use knowledge moreeffectively for greater economic and social development. The knowledge revolutionincorporates education, life-long learning, science & technology (S&T), innovation andincreased investment in R&D – more than in fixed capital, supported by ICT. Makingeffective use of knowledge in any country requires developing appropriate policies,institutions, investments and coordination across KE pillars, such as those suggested byWorld Bank hereunder, to articulate strategies towards KE. Socio-Economic Regime: an economic and institutional regime that provides incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship. Education: an educated and skilled population that can create, share and use knowledge well. Innovation: an efficient innovation system of firms, research centres, universities, think-tanks, consultants and other organizations that can tap into the growing stock of global knowledge, assimilate and adapt it to local needs and create new technology. ICT Infrastructure: that can facilitate effective communication, dissemination and processing of information2.Alongside the same vision, the EIB has been financing investment in development,education, research, innovation and ICT since 2000, for the establishment of acompetitive, innovative and knowledge-based society, capable of sustainable growth,creation of jobs and greater social cohesion, in addition to supporting entrepreneurshipand transfer of technologies, essential for RDI and progress3.In light of the dominancy of knowledge in post-industrial turned KE society; residing inorganizations, tools, tasks and networks; knowledge transfer (KT)4 has become essentialin organizing, creating and disseminating tacit knowledge within national models ofadvanced economies and policies, from resource-based to knowledge-based production5.It is also defined as a process by which innovation is communicated through KTchannels over time in socio-economic systems, as KT orients growth policies throughincreased knowledge content and innovation, heightened by inter-linkages andknowledge absorption (KA). Transfer channels include “individuals”; “ICT” such as theinternet, e-portals, networks, software and linkages to academia; “processes” such aslicensing, standardization, competitive awards, applications; and “transactions” such asFDI, trade, research and producer-consumer bi-directional KT. Foreign directinvestment (FDI) and international trade in goods and services are two major cross-border channels for technology transfer; together with linkages among educational,1 http://en.wikipedia.org/wiki/Knowledge_economy2 World Bank3 http://www.eib.org/about/events/conference-in-economics-finance-2009.htm4 http://en.wikipedia.org/wiki/Knowledge_transfer#cite_note-Argote_Ingram_2000-05 OECD (1999), Managing National Innovation Systems, OECD Publications Service, Paris |Page 5 of 34|
    • Case Study on Knowledge Transfer to Jordanresearch and international communities, ICT and migration (e.g. diasporas). Throughthese channels, information flow and spillovers are enhanced through foreigninvestment and trade equipment, goods, imports; expatriates, training, mobility,agreements and affiliation, inclusive reverse technology transfer or outward FDI.Suppliers provide new equipment as new knowledge for product enhancement throughtransfer channels, e.g. 27% of innovation expenditures in Germany come fromequipment service delivery. Other spillovers and enablers include special projects,consultancies and special processes such as licensing or national competitions, emittingout of positive impact of knowledge between individuals within an organization thatproduces goods or services internally, or externally (outside the organization).An individual, group, firm or nation’s ability to recognize the value of new information,assimilate it and apply it to commercial ends and in businesses, has been defined as theabsorptive capacity, an enabler of innovation, based on developing cumulativeabsorptive capacity (Cohen and Levinthal 1990) and investment in R&D. The absorptioncapacity is key in KT and accumulation, as individuals, firms and countries absorb,learn and implement technologies and practices, while effectively using / customizingtheir acquired knowledge. The assimilation process of external knowledge often leads toself-learning, analytical thinking and problem solving. Dissemination and nationwidescaling up is enabled by intrinsic and innovative efforts of investment in R&D by firmsto create new knowledge and products. The national absorptive capacity and knowledgestock accumulation resultant from existing and new knowledge are enhanced throughexogenous factors - namely the influx of international skills and experiences, andendogenous factors – namely the human capitol, trade and FDI channels, in addition toR&D absorption, innovative systems and S&T. This integration of local resources withtechnological opportunities promotes production and growth. Prior knowledge,technological knowledge and capabilities that interact with human capitol and economicpublic, private and civic sector actors, are all enablers of absorptive capacities.Policies & Socio-Economic Regimes● Effective use of knowledge is based on appropriate coordinated policies and institutions within supportive legislative frameworks6 to articulate transitional and long term KE strategies.● FDI and international trade are major channels highly affected by macroeconomic policies through which technological knowledge developed in one country transfers to another (Saggi, Keller & Pantia)7.● Liberal trade and investment regimes are major enablers of KT in domestic economies, aided by new technologies and skills.● Indictors and enablers of FDI facilitate competitiveness among countries and support investment policies reforms [Note 1].● Minimum needed absorptive capacities enable FDI to achieve higher productivity, as self-learners boost this capacity, aided by past industrialization experiences.● KT channels highly impact firms that exert intrinsic technological efforts resulting in R&D accumulation, innovative performance and new products.● Business activities are enabled through market size, workforce skills, operational and insolvency procedures and security.● The ease of starting a business, another KT enabler, is achieved through economic policies, enhanced business environment, local competition, openness to trade and investment, market flexibility and bi-directional producer-consumer KT channels6 UNDP AHR 2003, AKR 20097 Saggi, 2002; Keller, 2004 and Kneller, Pantea and Upward, 2009 |Page 6 of 34|
    • Case Study on Knowledge Transfer to Jordan (Cowan, Soete and Tchervonnaya, 2001), all of which increase KA in addition to IPR protection, standardization, taxation, incentives, subsidies for innovation and linkages with main stakeholders.● Within technological opportunities, firms are great mediums for absorption as available internal and external resources and knowledge are assimilated. Investigative processes yield technological- and self-learning, which together with technological knowledge, R&D and innovative performance create new products and production growth.● Decentralized flat organizational structures and practices, with participatory disciplines and information-sharing through ICT are enhancive to KA.● E-services enable KT through various channels by improved accessibility and usage of new and relevant knowledge8, reliant on IPR and trademarks, as opposed to the patents-reliant manufacturing sector. The Netherlands succeeded in putting e- services on an equal footing with manufacturing, leading to innovative policies. The eBay, Google and Yahoo market value exceed $200 B.● Manufacturing increase competitiveness, promotes innovation-driven growth and higher employment9, yet as it creates jobs, it might come at a price of economic inequity, urbanization, pollution and environmental degradation10. Note (1) FDI Enablers Indicator Indicator Details Enablers Target audience Doing Business-type  Starting a business  Foreign ownership indicators of  Dealing with licenses restrictions investment policy  Employing workers  Investment promotion  Registering property  Pre-establishment Governments  Getting credit procedures to target, stimulate,  Protecting investors  Access to land implement and  Paying taxes  Currency convertibility and communicate investment  Trading across borders repatriation policy reforms  Enforcing contracts  Expropriation and int’l Investors  Closing a business arbitration to help guide their Country benchmarks for the • Employment restrictions on expatriates investment location ease of establishment and • IPR protection and enforcement decisions and policy operation of a foreign • ADR mechanisms dialogue with owned business in a country • Excluded investment climate variables: governments • Infrastructure Advisors / Consultants • Human resources to focus their assistance • Trade policy to client Measures of formal  Survey of laws/regulations (objective info) and countries on key policy- statutory restrictions administrative processes (subjective info) level constraints on FDI, and regulatory and  Respondents are private sector, intermediaries (investment to increasing FDI administrative lawyers, consultants, accountants, ...) competitiveness barriers in practice.  Survey filled out by governments for validation / cross- checking purposes Source: Global Forum on International Investment, 200818 http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf / Knowledge Transfer and the Services Sector in the Context of the New Economy by Robin Cowan, Luc Soete & Oxana Tchervonnaya - 2001-20219 http://go.worldbank.org/5HRC2LA23010 http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf / Knowledge Transfer and the Services Sector in the Context of the New Economy by Robin Cowan, Luc Soete & Oxana Tchervonnaya - 2001-2021 |Page 7 of 34|
    • Case Study on Knowledge Transfer to JordanEducation and Human Capital● Education enables technological changes and prepares KE human capital.● ICT-based education reforms are slow to exhibit impact. Creation of human capital is staged towards capital deepening (knowledge acquisition), high quality labour (knowledge deepening) where workers contribute to a country’s ability to absorb and apply technologies; towards knowledge creation and innovation (Kozma 2007)11.● Higher education is addressing new demands and supplies, merging ICT and instilling lifelong learning.● Scientific research and innovation extend outside academia into developmental and knowledge production systems.● Human capital bi-directional mobility is a channel were humans carry tacit knowledge across institutes; it includes different types of diasporas. Mobility and research play an important role in KT (Teichler and Yagci).● Brain drain is often described as loss of investment through outflow. Brain circulation, in contrast, looks into brain drain as a “return” in terms of remitted results of outflows (Knight 2007).Innovation, S&T and R&D ● Innovation is a key enabler of KT and KA across sectors and borders, enabled by S&T and R&D. ● S&T, as a tool of innovation and scientific cooperation in education and research, is supported by state incentives and international cooperation, where reaching critical mass (human resources) is of the essence. ● Domestic RDI, openness of academic research and patents create new knowledge, highly skilled humans, new product markets, quality assurance mechanisms, networking, interactive learning, entrepreneurship, innovative organizations and commercialization of knowledge. ● R&D is promoted through acquisition (based on R&D experience), assimilation (patents, citations, research publications...), transformation (new products ideas and research projects), exploitation capabilities (announced products, development cycle); and cater for diverse markets and societies. ● Institutional linkages with academia, industry, services and businesses lead to effective diffusion of innovation. ● Entrepreneurship - in the presence of institutional empowerment, domestic and foreign capabilities, where innovation impacts growth - is measurable based on resource efficiency and competitive economies.ICT Infrastructure ● The ICT Infrastructure is a dynamic key enabler for KT and communications channel that disseminates and processes information. ● It is conducive to formation of producer-user, producer-producer and consumer- consumer networks that generate considerable knowledge spillovers to service industry and society. ● The impact of ICT is reliant on governing policies, human capital skills, ICT infrastructure and innovative businesses12. ● ICT supports management information and decision making systems, needing regular maintenance and updates via skilled human resources.11 Ref. ICT, Education Reform and Economic Development, Dr. Robert Kozma, Oct. 2007, Dead Sea, Jordan12 Measuring the Impacts of ICT for Development. UN Conference on Trade & Development |Page 8 of 34|
    • Case Study on Knowledge Transfer to Jordan2. Situational analysis of the KT channels in the MENA, impediments and recommendations |Back|Developing countries are facing challenges in attaining knowledge-empowered systems,failing to tap the vast and growing stock of knowledge because of limited awareness,poor economic incentive regimes and weak institutions, thus increasing the knowledgedivide between them and countries that are generating most of this knowledge amidstincreasing international competition emitting out of a combined trade policyliberalization and knowledge revolution that challenge natural resources and low labourcosts advantages most developing countries had relied, or still relying on. A wideningknowledge gap with industrialized countries is attributed to lack of innovativecapabilities, R&D, scientific articles, patents and inequality in internet accessibility.Policy & Socio-Economic Regimes● MENA countries are taking the low-road approach to economic development13 in response to global competitive pressures, disregarding labour or environmental regulations and perpetuating social inequities.● MENA failed to reach economic convergence with developed countries as its GDP hovers around 8% that of N. America, with high unemployment of 24.4% specially among females.● Only 1% of manufactured exports are classified as high-technology and R&D- intensive.● The Arab world falls short on most of the KE indicators, namely GDP growth, poverty, tariff and non-tariff barriers, regulatory quality, rule of law, royalty & license fees payments & receipts, S&T journal articles, granted patents, adult literacy rate, secondary & tertiary enrolment, telephone, computers and internet penetration [Figure 1].● Low political stability, risk-prone and investment-inhibitive region to foreign investors.● The region is underperforming in fighting corruption, adversely affecting investors confidence.● Regional economies, productivity and competitiveness are challenged in shifting towards a knowledge economy harbouring main knowledge transfer channels, namely FDI and international trade, developed education for readiness to knowledge, skilled and productive workforce, fostering innovation and making full use ICT in development.● The region’s share in global FDI inflows and cross-border mergers and acquisitions was 16% of the developing countries’ share and 4.8% of the global share (2006).● Inter-Arab investment flows are shown in [Tables 1 and 2] of both sending and receiving countries or inward and outward FDI flows, using panel data of Arab countries14.● The quality of the institutional framework is a handicap for FDI inflows, causing investor hesitation.● The region remains relatively closed, high on the Trade Restrictiveness Index with less than 1% of world exports (excluding oil), lack of facilitation (28 days for customs procedures against 12 days in OECD), mediocre transport infrastructures and logistics performances.13 UNIDO report 200314 An augmented gravity model was used based on Standard Gravity Variables (distance, income and population, congruity and other dummies) |Page 9 of 34|
    • Case Study on Knowledge Transfer to JordanFigure (1)KnowledgeEconomyValuesSource: KEReport, WBDatabase,KnowledgeAssessmentMethodologyKAM) Table (1) Inward FDI Flows $M Current Prices & Exchange Rates, 2000-2010 (Sorted & Rounded 2010) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 S. Arabia 183 504 453 778 1,942 12,097 17,140 22,821 38,151 32,100 28,105 Egypt 1,235 510 647 237 2,157 5,376 10,043 11,578 9,495 6,712 6,386 Qatar 252 296 624 625 1,199 2,500 3,500 4,700 3,779 8,125 5,534 Lebanon 964 1,451 1,336 2,860 2,484 3,321 3,132 3,376 4,333 4,804 4,955 UAE -506 1,184 95 4,256 10,004 10,900 12,806 14,187 13,724 4,003 3,948 Jordan 913 274 238 547 937 1,984 3,544 2,622 2,829 2,430 1,704 Tunisia 779 487 821 584 639 783 3,308 1,616 2,758 1,688 1,513 Morocco 422 2,808 481 2,314 895 1,654 2,449 2,805 2,487 1,952 1,304 Palestinian 62 19 9 18 49 47 19 a28 52 265 115 Kuwait 16 -176 4 -67 24 234 121 112 -6 1,114 81 Yemen 6 136 102 6 144 -302 1,121 917 1,555 129 -329 Source: UNCTAD, UNCTADstat Table (2) Outward FDI Flows $M, Current Prices & Exchange Rates 2000-2010 (Sorted & Rounded 2010) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 S. Arabia 1,550 46 2,020 473 79 -350 -39 -135 3,498 2,177 3,907 Kuwait -303 -242 -77 -4,960 2,581 5,142 8,211 9,784 9,091 8,636 2,069 UAE 424 214 441 991 2,208 3,750 10,892 14,568 15,820 2,723 2,015 Qatar 18 17 -21 88 438 352 127 5,160 6,029 11,584 1,863 Egypt 51 12 28 21 159 92 148 665 1,920 571 1,176 Morocco 59 97 28 12 31 75 445 622 485 470 576 Lebanon 108 1 0 611 827 715 875 848 987 1,126 574 Tunisia 2 6 6 5 4 13 33 20 42 77 74 Yemen -9 1 39 61 21 65 56 54 66 66 70 Jordan 9 32 14 -4 18 163 -138 48 13 72 28 Palestinian 213 377 360 49 -46 13 125 -8 -8 -15 -11 Source: UNCTAD, UNCTADstat |Page 10 of 34|
    • Case Study on Knowledge Transfer to JordanEducation And Human Capital● The challenge facing Arab Human Capital (Wes Schwalje)15 is the growing need for converging human capital development policies towards KE [Figure 2] at a time economic policies are impaired to varying degrees due to lack of transparency and accountability16.● Getting Arab Youth into Employment17 is a major challenge (Tom Speechley)18, where 25% of some populations who are under the age of 26 are unemployed.● Youth unemployment economic loss exceeds $40–50 billion annually. There is a need for 51 million new jobs by the end of 202019.● There is a mismatch between human capital investments and private sector needs due to the quantity and quality of human capital attributed to education and training systems. “Regardless of how the impact of investment in education in the MENA region is evaluated ... it was not associated with higher economic growth or appreciable gains in growth compared to East Asia and Latin America”, (World Bank).● Arab States devote higher expenditures on education than other governments20 [Figure 3].● Human capital mobility through migration of Arab post-graduate students to Europe and USA is seen as an enhancer of KT. Brain drain in MENA has repercussions due to lack of incentives and favourable environments to encourage the return or engagement of migrant Arab post-graduates21. Mobile students from Arab States were 3% of the tertiary-enrolled students22.Figure (2) Index Values for the Pillars of KE for Arab Countries, G7 and the WorldSource: WB Database KAM15 Wes Schwalje, LSE, UK16 Henry and Springborg 201117 Getting the Arab Youth into Employment by Tom Speechley, January 14, 2012 http://www.wamda.com/2012/01/getting-the-arab-youth-into- employment18 CEO of Abraj19 UNDP 200920 Development, Education and Finance. Analysis of debt swap for social investment as an extra-budgetary education financing instrument. By Senator Diego Filmus – Esteban Serrani.21 The “National, Regional and Global Perspectives of Higher Education and Science Policies in the Arab Region” Minerva: A Review of Science, Learning and Policy, Springer, December 2011 Minerva, Springer, Germany, December, Vol. 49, No. 4, December 2011, pp. 387-423 - Minerva 201122 Ref. Higher Education, Research and Innovation: Changing Dynamics Report on the UNESCO Forum on Higher Education, Research and Knowledge 2001-2009 - UNESCO 2009 |Page 11 of 34|
    • Case Study on Knowledge Transfer to JordanFigure (3) Total Public Education Expenditures 30 25 20 Total public education 15 expenditures as % GNP 10 Total public education 5 expenditure as % of total government spending 0 Source EFA Global Monitoring Report 2008Source: EFA Global Monitoring Report 2008Innovation, S&T and R&D ● MENA countries are knowledge-importing countries with limited resources that need high-priced technology from knowledge exporting countries, incur IP costs, technology pricing and monopoly. ● The average government expenditure on R&D in the Arab States is around 1.5% compared to 2.5 % at OECD and 18% in Japan23. ● Research at universities is challenged by equity, quality, relevance, ownership, networking, absence of S&T governance mechanisms, weak politics, and a low critical mass of FTE researchers, low number of patents and poor commercialization funds. ● Impeded transfer channels restrict regional and global mobility of scientists. ● Technology transfer units at universities face institutional difficulties due to mismanagement in technology transfers. ● Intellectual property regimes are weak, providing little protection for the output of scientists. ● Lack of typical innovation features.ICT infrastructure ● Weak connectivity and accessibility, particularly among the poor. Low online Arabic content; according to Google, out of the 300 million nation, only 10% comprise online visitors. [Figure 4] shows mobile and broadband subscribers and PC owners. ● Bilateral trade flows by ICT goods categories are shown in [Figures 5-7 ] for Tunisia, Egypt and Jordan.23 Ramirez 2008, El Kaffass 2007 |Page 12 of 34|
    • Case Study on Knowledge Transfer to Jordan Figure (4) MENA Statistics on PCs, Mobiles & Broadband 140.00% 120.00% 100.00% 80.00% Percent (%) 60.00% 40.00% 20.00% 0.00% Mobile Fixed broadband PC owners subscribers subscribers MENA 67.40% 2% 5.70% High-income countries 123.20% 26.90% 56.00% 2009 (WBG 2011) Figure (5) Tunisia - Trade Flows in ICT Goods (2008 - 2010) UNCTAD 1200 1000 800 USD M 600 400 200 0 Computers & Consumer Total ICT Communicati Electronic peripheral electronic Miscellaneous goods on equipment components equipment equipment 2008 746.26 118.9 236.43 216.02 167.52 7.39 2009 673.65 85.06 246.94 194.61 137.99 9.05 2010 1,072.03 54.11 407.24 408.48 193.79 8.4 Figure (6) Egypt - Trade flows in ICT goods (2008 - 2010) UNCTAD 100 90 80 70 60USD M 50 40 30 20 10 0 Computers & Consumer Total ICT Communicatio Electronic peripheral electronic Miscellaneous goods n equipment components equipment equipment 2008 88 10.45 6.74 6.81 62.99 1 2009 40.24 13.78 10.93 7.29 7.8 0.44 2010 35.56 13.74 8.96 6.36 5.12 1.38 |Page 13 of 34|
    • Case Study on Knowledge Transfer to Jordan Figure (7) Jordan- Trade flows in ICT goods (2008 - 2010) UNCTAD 350 300 250 USD M 200 150 100 50 0 Computers & Consumer Total ICT Communicati Electronic peripheral electronic Miscellaneous goods on equipment components equipment equipment 2008 293.33 39.51 226.26 18.65 0.39 8.51 2009 99.18 36.94 46.03 12.13 0.29 3.79 2010 90.88 22.5 38.58 9.17 3.36 17.26Recommendations on the MENA levelArab countries live in a density disparity zone, where knowledge density is higher onthe outside than on the inside and pretty much like “osmosis” there is a need forknowledge influx to create equilibrium and bi-directional exchange, namely throughdirect economic action (FDI, foreign trade, ease of staring business, globalization, opentrade, standardization and competitiveness), as an immediate action for short-termimpact; with mid-term goals of political, economic and social reforms, in support for KTthrough adequate ICT infrastructure and innovative platform nurturing RDI and S&T.Long-term KE policies are needed to build the in-common and crucial national humancapitol gaining ICT-based KE and entrepreneurship skills for knowledge creation andproduction.Policies & Socio-Economic Action● Mobilize coordinated national policies, strategies and legislation towards economic growth and job creation by adopting an integrated KE model across socio-economic regimes, education & human capital, innovation (R&D & S&T) and ICT infrastructure, boosting KT and absorption capacity.● Accommodate regulative processes to macroeconomic conditions, market size, workforce skills and security, through reforms to include price liberalization, macroeconomic stabilization and daily economic activity focus.● Promote foreign direct investment (FDI) and international trade, as two major channels for international technology transfer (for the recipient), and source of income for innovation (for the supplier) for cross-border technological KT.● Support manufacturing and e-services towards increased KT across economy pillars to boost FDI and international trade.● Enhance business regulations and environment, focusing on the ease of doing business and IPR protection.● Increase the absorptive capacity and innovation in business by investing in R&D.● Promote private sector participation in investment for job creation and improved productivity. |Page 14 of 34|
    • Case Study on Knowledge Transfer to Jordan● Combat environmental deterioration, protect natural resources, locate innovative alterative and renewable energies. Mitigate water-scarcity and environment-pro human behaviour.Human Capital & Education● Promote two dimensional human capital mobility across firms or institutes, as key KT channel.● Educate and train human capital through ICT-based training models fostering KE, entrepreneurship and job creation skills, within reformed systems.● Promote female participation in employment and self-owned business.● Enhance higher education policies to meet demands and diversification, and ICT- based lifelong learning based on social engagement and commercialization of S&T and RDI.● Conduct research on the impact of mobility on knowledge; regulate mobility of academics to serve KT in higher education, quality and research.Innovation, S&T, R&D ● Create innovation supportive policies within and outside academia, linked to research, academia and private/civic sectors participation; heightened by competitive production environments. ● Increase investment in R&D more than in fixed capital. ● Create innovative educational systems and increased absorptive capacities in business firms based on R&D, S&T capacities, and ICT backbone. ● Increase highly qualified future researchers within openness of research, patents/copyrights, domestic R&D institutions linkages with industrial, service and business sectors, for effective diffusion of innovation. ● Support researchers and scientists inward and outward mobility.ICT Infrastructure ● Invest in national ICT infrastructure and relevant technologies (KT enablers) to create a facilitative, dynamic and effective communication channel. ● Decrease digital divide through increased accessibility, promotion of effective usage and expansion of telecommunications markets. ● Apply interlinked and sector-based management information systems. |Page 15 of 34|
    • Case Study on Knowledge Transfer to Jordan3. Deduction and assimilation based on findings & enabling factors for KT in Jordan (a case study) |Back|Executive summaryJordan is a country that has both beauty and potential; a picturestique land of diverseterrain and climate, rich history and heritage, unexploited resources, friendly andeducated people who are eager to develop and succeed, based on good foundations forgrowth and development. Yet, Jordan falls short in key determinants ofcompetitiveness, highlighted by high public expenditures, further burdened byresponsiveness to Arab Spring, frequent changes in cabinets, weak competitivenessrankings, energy and water shortages, unexploited mining, tourism, and renewableenergy24. There is lack of knowledge retention, and support to KT, its channels andenabling environments. Systems seem to lack sturdy coordinative platforms, guided byKE orientation towards economic growth and job creation, while human resources facechallenges of inadequacy of KE skills, highlighted by high unemployment, particularlyamong women. Jordan has an opportunity to improve its competitiveness, amidstpolitical stability, reliant on employment-relevant education and hosting of enabling andconductive environments to knowledge transfer and absorption. Jordan can build on itsmain knowledge transfer channels (openness to foreign investment and trade) andenablers for knowledge flow (relatively lower corruption, institutional technologicaladvancements and in-house capability to absorb technologies), in addition to its well-educated population, innovation determinants and emerging competitive clusters inICT. It has knowledge enablers through sectors and services, such as the medical,tourism, natural renewable energy resources (wind and solar) sectors, and untappedhuman potential (whether employed, seeking employment or economically inactive,inclusive women).Jordan’s socio-economic regimes play an important role in promoting absorptivecapacities of knowledge, as poverty and youth unemployment adversely affect KT;complexity of administrative procedures, fiscal procedures and corruption are furtherinhibitors. Although international institutions promote absorption capacity, yet non-receptive audience or resistance to change are bottlenecks where human capitalreadiness is a major KT enabler. Such KT and KA enablers / bottlenecks are attributedto incidence of tacit and codified knowledge (educational attainment, literacy) andeffectiveness (employment and participation rates, productivity growth, industry valueadded, high-tech exports, publications and patents). KT channels are reliant on - andproduced through - educational and academic systems (including research institutions),tacit knowledge through and among national educational institutions, (foreign) directinvestment, international trade and networks, NGOs and provision of technicalassistance, etc. Free trade zones and business parks are good conductors for KT, inaddition to labour, product market flexibility and immigration (e.g. diasporas) aseconomic growth and KT factors. The human capital empowerment, a long-termobjective, is a main KT channel and platform which relies on knowledge holders,recipients and institutional settings, where knowledge holders regulate the amount andquality of shared knowledge and recipients need to be ‘receptive’ for flow and absorptionof knowledge. The characteristics of knowledge holders and knowledge recipients are24Extracts from the USAID Jordan Economic Growth Assessment - Business Environments for Agile Markets (Beam), prepared by CaranaCorporation |Page 16 of 34|
    • Case Study on Knowledge Transfer to Jordanvery important for the process of KT. Human capital mobility as a KT channels is based“carriers” of tacit knowledge, particularly in organized two-dimensional mobility acrossfirms or institutes. International conferences are important in knowledge-generationand knowledge-transfer infrastructures in both manufacturing and services, aided byhuman exchange of knowledge.Jordan has achieved economic growth of 3.1%, registered high unemployment (13%),budget deficit (5.5% GDP), and increased inflation (5%)25. The level of debts exceededthe permitted maximum of 60% of the GDP. Most of GoJ income comes from taxes andmost of its expenses go to public sector salaries, pensions and compensations. Its GDPcomes from manufacturing (17.8%) followed by net taxes on products. Economic reformis slow, despite paving good grounds for an investment climate. The energy crises toppedthe list of challenges. GoJ was advised by WB not to cut back on capital expenditures,needed for economic growth. Critics fear further taxations, as they criticize Jordan’strade imbalance and question the ‘real’ value of economic growth, some refer to it as the“jobless growth”.Jordan’s ranking on international indices lagged behind. Posed challenges coveredpublic debt, government budget deficit, weak funding through local financial markets,tax laws, customs procedures, lack of modern technologies in production areas, linkingwages to productivity, diminished usage of modern marketing technologies bycompanies, efficiency of management in delegating authorities in corporations,development of clusters, weak public and private sector institutions in general and theinability to link international markets to local ones at low costs. Additionally, challengesresided on the levels of RDI and lack of enablers, weak linkages among scientificresearch and the industrial sector, non-effectiveness of IPR legislative protection, lowquality and output of education and declined enrolment rates in secondary education.Jordan was specially behind in the economic environment and labour market efficiencyindices with significant drops in infrastructure, business environment development andinstitutions. Innovation efficiency and scientific research indicators for Jordan were low,with low expenditure on R&D. The ICT sector lacks regulation as IT usage remains low,especially among SMEs that regressed on the competitiveness scale. Telecom costs andPC prices are high, leading to low penetration. KT channels and absorption areimpaired within inhibitive environments, for example, weak educational output effectslevels of creativity and innovation, which is also challenged by lack of IPR and nurturingenvironments that support innovation and commercialization leading to economic gainand job creation.Jordan’s high unemployment has been heightened by 2 million economically inactivepersons, of same working-age group that no longer seek employment, most of which arewomen, lack skills or simply gave up. Guest workers exceed 300,000, as Jordan tradeshigh-export labour with incoming low-skilled workers. Higher education outcomes lacksoft skills with poor industry-academia linkages. A good portion of Jordan’s mobilestudents or scholars never return for lack of favourable conditions.Jordan case study |Back|Jordan had not reached knowledge deepening and knowledge production stagesreflective of developed economies that get reflected on the GDP. Little studies on25 CBJ 2010 |Page 17 of 34|
    • Case Study on Knowledge Transfer to Jordanknowledge transfer and knowledge absorption capacities in terms of enablers andimpediments exist. Without undermining Jordan’s enormous achievements on numerousfronts, the case study focuses on KT enablers and impediments based on Jordan-specificresources, literature and interviews.Socio-economic regimes● Jordan is an upper middle income country, with a population of 6.51 million (2011), having a 92.1% literacy rate26 and 77% primary, secondary and tertiary enrolment. The Nominal27 GDP is $21.92 B and per capita GDP is $4,700.● Jordan’s economic growth was 3.1% in 2010, registering unemployment at 13% – unofficially cited at 30%, budget deficit at 5.5% GDP, external trade up by 10.5%, inflation up by 5% due to rise in international markets basic commodities prices. CBJ reserves surged by 12.5% exceeding $12 B. Outstanding balance of credit facilities extended by banks increased by 8.5% (mainly to private sector)28.● The recorded budget deficit (excluding grants) was JD -1,840.2 M; [Table 3] reflects Jordan’s main economic indicators – inclusive the trade deficit. The summary of the central government budget [Figure 8], GoJ revenues and expenditures [Table 4] and sectors contributions to GDP [Table 5] , are shown hereafter, respectively.● The trade balance deficit was JD – 4,238.1 million, in light of JD 4,063.6 million in FOB exports, versus JD 8,637.9 million in FOB imports (CBJ). Jordan’s trade volume with the top 10 partners [Figure 9] shows higher imports than exports (JD 2.5M). Globally, trade data showed that Jordan’s imports from the world were about $14,000 M, and its exports to the world were about $6,500 M (2009)29. Trading with Arab countries registered about $ 3,260 M [Figure 10].● FDI dropped from 706,941,417 in 2009 to 224,109,100 JD in 2010. This means that the FDI dropped 68.3%, [Figure 11] shows the FDI inflows and outflows in $Million.● Investment promotion is facilitated through the Jordan Investment Board (JIB), Jordan Industrial Estates Corporation, Aqaba Special Economic Zone Authority (ASEZA) and Development Zones Commission. However, existing multiple regulations and laws governing investment is proving to be confusing to investors.● Jordan has 260 investment opportunities estimated at $7.6 B (USD)30, in agriculture, energy, water, and environment sectors; mining, chemicals, plastics, fertilizers, textiles, ICT, business and logistics services; plus real estate and tourism31.● Real estate accounted for the highest number of projects totalling 24 [Figure 12] representing 13% of investment projects, followed by financial and business services32.● E-services enablers are lacking, namely the appropriate legislative laws pertaining to intangible goods and services, heeding similarities yet vivid differences from manufacturing, to boost KT channels and economic growth, through FDI and DDI.● Jordan underperformed on the Global Competitiveness Report 2010-2011. All performance indicators dropped down, save the economic environment one, as compared to the previous year [Figure 13].● The WEF Financial Development Index 2010 denoted difficulties in starting a business, particularly in enforcing contracts and dealing with construction permits 33. The same Index recorded regression in institutional and business environments,26 Jordan’s Department of Statistics27 Re USDoS Bureau of Near Eastern Affairs, December 30, 201128 CBJ29 Source: International Trade Center, http://www.trademap.org/30 Source: Investment Climate in Arab Nations Report, 2010.31 Source: Investment Climate in Arab Nations Report, 2010, The Arab Investment & Export Credit Guarantee Corporation32 FDI Intelligence from Financial Times Ltd)33 Doing Business Index (IFC) |Page 18 of 34|
    • Case Study on Knowledge Transfer to Jordan financial stability, banking and non-banking financial services, financial markets and financial access. [Note 2]. ● The 2012 Country Scorebook34 denoted shortcomings in areas of ruling justly, corruption control, economic freedom, investing in people, fiscal policy, regulatory quality, inflation, natural resource management and expenditures on education. [Note 3]. ● King Abdullah II Centre for Excellence is the national reference for quality and excellence through its public, private and civic sectors Awards that motivate transfer channels where KT is a process and enabler to spillovers resulting from impact of knowledge among individuals and firms. It is a success story, [Note ]. ● Transportation comprising an enabling and logistics environment, has been assessed in terms of competitiveness as expansions are underway for airports and seaport. ● Jordan imports 80% of its needs from the Egyptian natural gas to generate electricity at the rate of 6.8 M3/day of the imported gas35. The pipes were affected during recent events, causing $1.5B in damages and further financial burdens. Table (3) Main Economic Indicators – JD MPublic Finance (Exc. Central Gov. Deposits) 2011 2010 2009 2008 2007 J.-Nov. Domestic Revenues 3,895.1 4,261.1 4,187.8 4,375.4 3,628.1 Foreign Grants 1101.3 401.7 333.4 718.3 343.4 Current Expenditures ( Commitment basis ) 5,019.8 4,746.6 4,586.0 4,473.4 3,743.9 Capital Expenditures 715.5 961.4 1,444.5 958.5 842.6 Deficit / Surplus (Including Grants) -738.9 -1,045.2 -1,509.3 -338.2 -615.0 Deficit / Surplus (Excluding Grants)) -1,840.2 -1,446.9 -1,842.7 -1,056.5 -958.4Internal and External Public Debt 2011 2010 2009 2008 2007Gross Domestic Debt of Central Government Nov.( Budgetary and Own - Budget Agencies) 9,561 7,980 7,086 5,754 3,695Trade Balance (Deficit -) -4238.1 -4823.8 -4448.8 -5084.4 -4574.2Exports F.O.B. 4243.9 4990.1 4526.3 5633.0 4063.6Imports F.O.B. 8482.0 9813.9 8975.1 10717.4 8637.8 Source: CBJ Figure (8) Summary of Central Government Budget, 2006 – 2010, JD M Source: CBJ Table (4) - Budgetary Central Government, 201034 MCC USA Indicators to Millennium Challenge35 Haidar Al-Qamaz, Al-Rai |Page 19 of 34|
    • Case Study on Knowledge Transfer to JordanDomestic revenue Public expenditures Revenues from selling goods &General sales tax 46.5% 14% servicesMilitary expenditures 29.8% Pensions & compensation 13%Capital expenditures 16.9% Other expenditures 12.5%Compensation of employees 15.6% Interest payments & subsidies 12.25% Taxes on int. trade &Other revenues 15.5% 6.7%, transactionsTaxes on income & profits 14.7% Other tax revenues 2.1% Source: Annual Report 2010 - www.cbj.gov.jo Table (5) - Sectors Contribution to GDP (%) (3rd Q 2011) Sectors Q3 Q3 Sectors Q3 Q3 2010 2011 2010 2011Manufacturing 17.5 17.8 Community, social & 4.3 4.3 personal servicesNet taxes on product 17.5 16.9 Agriculture, hunting, 3.2 3.3 forestry & fishingTransport, storage & comm. 13.4 13.5 Electricity and water 2.3 2.3Producers of government services 10.3 10.4 Restaurant and hotels 1.4 1.3Real estate 9.9 9.9 Mining and quarrying 1.3 1.4Wholesale and retail trade 9.4 9.4 Domestic services of 0.6 0.6 householdsFinance and insurance services 8.6 8.7 Producers of private non- 0.4 0.4 profit services to householdsConstruction 5 5 Imputed bank service -5.1 -5.1 charge Source: MOPIC Figure (9) Trade Relationships with its Top 10 JD M (Excluding Re-Exports), Jordan 2009 1400 1200 1000 800 % 600 Imports Exports 400 Re-Exports 200 0 Jordan Country Fact Sheet - Jib |Page 20 of 34|
    • Case Study on Knowledge Transfer to JordanFigure (10) Bilateral Trade between Jordan and Middle East 2009 (Includes Re- Exports) – Thousand $ 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Source : International Trade Center, Http://Www.Trademap.Org/ Figure (11) FDI Inflows and Outflows in $Million 4000 3500 Jordan FDI US$ - UNCTAD 2010 3000 2500 Axis Title 2000 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Inflow 913.3 273.6 238.2 547 936.8 1984 3544 2622 2829 2430 1704 Outflow 44.3 70.1 83.9 80.3 286.6 449.6 311.6 359.7 382.4 454.8 483.2 UNCTAD 2010 |Page 21 of 34|
    • Case Study on Knowledge Transfer to Jordan Figure (12) Investment Projects per Sector 12 10 8Axis Title 6 4 2 0 Consum Commu Consum R.Eastat Financial Business Hotels & Food & IT er nication er Textiles Other e Serv. Serv. Tourism Tobacco services Electroni s Products cs 2006 11 1 1 4 2 3 2 2 6 2007 2 3 1 1 1 2 1 9 2008 6 3 6 2 4 2 1 2 2 6 2009 1 2 4 3 3 2 2 9 2010 9 3 1 3 1 4 Source: FDI Intelligence from Financial Times Ltd Figure (13) Global Competitiveness Index 2010/2011 – Jordan Ranks of Jordan out of 139 countries Basic Requirement Innovation 120 Institutions 100 Business environment 80 Infrastructure development 60 Innovation & Economic 40 Sophistication Factors environment 20 0 Health & basic Market size education Technological Efficiency Enhancers readiness Higher education & Financial markets dev. Labour market training Market efficiency efficiency Source: Global Competitiveness Index 2010/2011 |Page 22 of 34|
    • Case Study on Knowledge Transfer to Jordan Note (2) Doing Business:  Starting a business needs 8 procedures over 13 days at a cost of 50% of income / capital, and min. capital of 20% of income per capital.  Dealing with construction permits needs 19 procedures over 87 days at a cost of 697% of income per capita.  Registering property needs 7 procedures over 21 days at a cost of 7.5% of the property value.  Getting credit is governed a low strength in legal rights (4/10), low depth of credit information (2/6), low public registry coverage at 1% of adults and no private bureau coverage.  Protecting investors has an average extent of disclosure, low extent of director liability 4/10, low ease of shareholder suits 4/10 and low strength of investor protection 4.3/10.  Trading across borders needs 7 documents to export, and 17 days, at a cost of 730 $/container; 7 documents to import, and 19 days, at a cost of 1290 $/container.  Enforcing contracts needs 38 procedures over 689 days, at a cost of 31.2% of the claim (this depends on the efficiency of the judicial system in resolving a commercial dispute)  Closing a business takes 4.3 years, at a recovery rate of 27.3 cents on the dollar and 9% cost of estate. Source: Ease of Doing Business – Jordan (WB-IFC). Taxes  Paying taxes covers 101 days, needing 26 tax payments. Profit tax is 14.3%, labour tax and contributions is 12.4%, other taxes are 4.4% and the total tax rate is 31.1% of profit. Source: Ease of Doing Business – Jordan (WB-IFC). Note (3) Justice  The Judiciary Sector (Formal and Islamic jurisprudence) has deficiencies in numbers of specialized judges, increasing number of cases and weak infrastructure of courts. Overlap between courts, public prosecution and public civil attorney department.  The legislation Sector faces deficiencies in numbers of qualified personnel and absence of training. Lack of coordination with institutions leading to unclear legislative text that meets the needs of all concerned parties Source: MoPIC Natural Resources Jordan has limited natural resources Scarcity of water. Absence of a comprehensive management plan for natural water resources and systems. Increasing aggression on natural reserves and forests. Environmental degradation. Weak institutional awareness of environmental safeguards and lack of coordination among the various concerned sectors. Failure to link environmental degradation to the national economy, Shortage of technical environmental staff in institutions related to natural resources and the environment. Unexploited mining sector (such as Shale oil, raw minerals, raw nuclear material, solar and wind energies) Source: MoPIC |Page 23 of 34|
    • Case Study on Knowledge Transfer to JordanNote (4)Success StoryKing Abdullah II Center for Excellence is the national reference for quality and excellence amongpublic, private, business associations, educational service providers and non-governmental institutions.It acts as a catalyst to development and increase competitiveness. The Center launched: ● The King Abdullah II Award for Excellence in Government Performance and Transparency ● The King Abdullah II Award for Excellence - for the private sector ● Mark of "Best Practice" for Business AssociationsThe awards motivates transfer channels where KT is a process and enabler to spillovers resulting fromimpact of knowledge among individuals and firms. This is done through: ● Creating qualitative transformation ● Developing the performance of government and institutions in serving Jordanian citizens and investors ● Enhancing positive competitiveness among government departments and institutions through promoting awareness of the concepts of distinguished performance, innovation and quality, and entrenching the culture of excellence for best practice. ● Instill the exchange of exceptional expertise between the Jordanian institutions and the sharing of their success stories. ● Guaranteeing that the government sector undertakes duties and tasks assigned to it in the best manner and with high levels of quality, efficiency and professionalism. ● Provides a reference guide and standards for measuring the level of progress and development of the performance of government departments and parties ● Support development programs and strategic planning in government departments and parties. ● Motivation of private sector, covering large manufacturing organization, SMEs and CSOs.The Five key elements the Award include: leadership, operations, knowledge, individuals and finance.Participation in the Award is compulsory to all ministries and government institutions, to be affectedgradually as stated in the Royal Decree. The King Abdullah II Center for Excellence publishes thesuccess stories of Award achievers on the websites of both the Center and the Award with the aim ofsharing the achievers’ knowledge, promoting the Award’s benefits and publicizing their achievement.The Award’s achievers present their success stories and share them with other organizations throughthe Award related training courses, awareness sessions, and relevant conferences. Award achievers mayalso preserve the confidentiality of information they do not want to publicize. After announcing theresults, each organization participating in the Award receives an assessment report based on theAward’s criteria clarifying its strengths and areas for improvement, to help it achieve continuousimprovement on its performance. By adopting the excellence criteria and international best practices,organizations participating in the King Abdullah II Award for Excellence for the private sector benefitin developing their internal systems which ultimately has a positive impact on their performance. Theyalso benefit from these criteria in the self-assessment process which aims to determine theorganization’s strengths and areas for improvement. Sources: http://www.kace.jo |Page 24 of 34|
    • Case Study on Knowledge Transfer to JordanEducation and the Human Capital● The population of Jordan is about 51% males, 60% are under the age of 24 and 76% under the age of 35 (DoS, 2011). The GoJ allocated 10% of its general budget to education, at JD 590,748,446 out of JD 5,708,024,127, i.e. 10.35%.● The distribution of students and schools in the Kingdom, is shown in [Figure 14].● Tertiary education enrolment in public and private institutions was 266,881, distributed as 234,559 (5A), 30,061 (5B) and 2,261 (6) ISCED levels. Public and private universities graduated 48,377 students, at an increase of 20% from the previous year, with 46% males36. College graduates dropped down 6%. Vocational school graduates dropped 60% compared to previous years, with 71% males. Academic schools graduates increased by 9%, with 41% males in 2008/2009.● Jordan’s high unemployment falls among the age group 16-64, mostly women, that are actively seeking but not finding employment, this leave 2 million persons, of same age group that are economically inactive. [Table 6 ]. The high cost of unemployment; the low income per capita, the high dependency ratio of 1:5 and unemployed youth are pressurizing the government for jobs and solutions.● HM Queen Rania has initiated numerous education and teachers’ training initiatives and awards. One story of success is “Madrasati” [Note 4 ].● Higher Council for the Affairs of Persons with Disabilities (HCAPD), headed by HRH Prince Raad Bin Zeid, President of the Council, is leading initiatives to enhance conditions and employment for PWD (success stories).● Jordan’s mobility students and scholars is challenged by lack of favourable conditions to encourage returnees. Jordan received about 30,000 inbound students, from all over the world.● Jordan’s workforce of 1.8 million and 313,000 registered guest workers mostly work in services, manufacturing and the public sector.● Reformed social security procedures are allowing a wider base of subscribers which increased by 6% (2009), while registering companies sustained growth by 18%. Early retirement accounted to 1% increase versus 4% in 2008.● On mobility [Tables 7 and 8], the internationally outbound students37 were 10,102 (2009), at an outbound mobility ratio of 4%, so that 2,203 students left to Ukraine, 2,188 to the USA, 1,329 to UK, 558 to Saudi Arabia and 541 to Germany. The inbound students were 26,637 (mostly from Arab countries, mostly males 67%), with a net flow of mobile students (inbound and outbound) for both males and females of 16.5% and a net flow ratio of 6.5%.● Jordanian students in higher education comprise 90.1% studying in Jordan and 9.1% study abroad [Figure 15].● The inbound Arab & foreign students enrolled to Jordanian universities were 29,379, and mostly males (68%) in 2009/2010.36 Ministry of Labour Figures37 Global Education Digest |Page 25 of 34|
    • Case Study on Knowledge Transfer to Jordan Figure (14) – Students Distribution 2010-2011 1,400,000 1,200,000 1,000,000 Axis Title 800,000 600,000 400,000 200,000 0 MoE Private Unrwa Other Gov. Students 1,143,008 382,867 117,957 14,090 Teachers 71,183 25,627 4,493 1,332 Schools 3,433 2,368 173 33 Source: MoE Statistics Book 2010-2011Note (4)Success storiesHer Majesty Queen Rania spearheads efforts in Jordan to adopt a holistic approach tonational education, encouraging agencies and organizations to work on classroom quality,teaching standards, computer access, family involvement, community investment, and healthawareness, through initiatives, like Madrasati and the Teachers Award .http://www.queenrania.jo/)Madrasati is a story of success with the aiming to reach 500 public schools in urgent need ofassistance across Jordan, an estimate of 250,000 students through a five-year initiative. TheTeachers’ Award is a main knowledge transfer and absorption enabler, so that the effects ofthe Award have been immediately visible creating competitiveness and surging applications. Table (6) - Population of Jordan - Employment / 6,249,000 (100%), DoS  Work Age Group 15-64 / 3,714,790 (67.2%)  Economically Inactive Economically Active (40.1%) Not Working (59.9%) Age >15 & <64 1,489,631 2,225,159 (32.8%) Working (87%) Out of Jobs (13%) 1,295,979 193,652 |Page 26 of 34|
    • Case Study on Knowledge Transfer to JordanTable (7) International Flows of Mobile Students– Tertiary Education & ISCED 5 & 6 Levels (2009) Source: UIS-UNESCO Global Digest - http://www.uis.unesco.org/Education/Pages/ged- 2011.aspx |Page 27 of 34|
    • Case Study on Knowledge Transfer to Jordan Table (8) Int. Mobile Students /Host Country & Origin, Tertiary Education & ISCED 5 & 6 (2009) Source: UIS-UNESCO Global Digest - http://www.uis.unesco.org/Education/Pages/ged- 2011.aspx Figure (15) Jordanian Students in Higher Education Studying Inside/Outside Jordan 350,000 300,000 250,000 Axis Title 200,000 150,000 100,000 50,000 0 Number Inside Jordan Outside Jordan Total Inside Jordan Outside Jordan Total Number 274,711 27,451 302,162Source: Ministry of Higher Education & Scientific Research |Page 28 of 34|
    • Case Study on Knowledge Transfer to JordanInnovation, S&T and R&D ● Jordan ranked 38.4/100 on the Global Innovation Index 2011, falling short on institutions, human capital & research, infrastructure, market sophistication, business sophistication, scientific output and creative output. ● The total number of researchers in Jordan, was 1,952 researchers/million population (2007) taking the lead among Arab countries. ● The Royal Scientific Society (RSS), founded by HRH Prince Hassan, is devoting resources for testing, knowledge, quality and outreach sectors. Jordans Technology Incubator (iPARK) succeeded in training about 2000 entrepreneurs since 2004, supported start-ups and value-added jobs [Note 6]. ● The RSS ICT for Development Cluster has commercialized research in serving communities, e.g. successful PWD and health sector initiatives [Note 7]. ● HRH Prince Hassan Bin Talal’s Award for S&T “The El-Hassan Bin Talal Award for Scientific Excellence” was established in 1995 for the encouragement of academic, scientific, and technological activities in all institutions involved in education and training. ● Jordan has numerous bridging institutions yet ranks low on the scientific research indicator. Function of research is not recognized and limited, void of participation in far-reaching programs. ● Expenditures on research and development are low, at 0.34–0.4% of the GDP, compared to 2-4% spent by highly industrialized countries. ● Higher education weakness are creating gaps in labour markets. Students are not presented with analyzed market trends and demand when selecting their topics of study. ● Government subsidies are unpredictable, hence adversely affecting long-term planning by universities. ● Brain drain of scholars shows that 4000 established scientists and engineers are employed in R&D and Research in the USA. This is mainly attributed to poor incentives, frustration and potential in the system. Few patents come out of universities. ● There are 81 tertiary and higher education institutes in Jordan, 62% are community colleges, 21% private universities and 12% public ones. Note (6) Success Stories El Hassan Business Park (EHSC) of El Hassan Science City is one of the main innovation leading institutions in Jordan. EHBP consists of : Queen Rania Centre for Entrepreneurship, iPARK business incubator and the Intellectual Property Commercialization Office. iPARK Technology Incubator aims at providing the needed catalyst to fuel the entrepreneurial process that is pivotal to Jordans economic development and specialized value-added services to incubated companies in the form of assistance in developing business plans, student internship/employment, networking, grants, promotion, HR management, raising capital from VCs, IP and laboratory facilities. More than 35 incubated companies and 20 gradated ones were processed. More than 750 jobs were created. The export oriented companies succeeded in reaching international clients (86%) and local clients (14%). The high-value added products and services contributing to Jordan’ intellectual capital were 26 shares of copyrights, 10 shares of patents and 4 shares of other. |Page 29 of 34|
    • Case Study on Knowledge Transfer to Jordan Note (7) Success Stories – ICT4D The ICT for Development (ICTD) cluster has registered success stories such as the life-saving development of an online centralized workflow system for the Higher Council Affairs for Person with Disabilities (HCAPD) to manage the workflow of service-provision. A PWD would register using a unique National Number to selects a service (e.g. wheelchair or hearing aid). The system will perform a diagnosis analysis, coordinates and follows up on medical checkups up until the service has been granted, preserving digitized records of the process. The system far-reaches into remote areas and villages, with de-centralized assistance to use and benefit from the system. A database is kept to ensure safety of patient in terms of medical reports and non-duplication of services. This represents a success story of knowledge transfer and absorption throughout centres by means of training, application and documentation. It was also a realization of R&D into a nationally commercialized system, that will save the Council expenses (by avoiding duplication of services), efforts and time. PWD on the other hand become enabled through those aids to become economically active, as the council sets another employability plan for PWD. There are 300,000 PWD in Jordan, but some estimates expect that 15% of the population are with disabilities. The DoS is aiming for a 2014 census that includes focus on PWD. RSS, http://www.hcd.jo ICTD is also addressing a Social Health and Information Technology initiative for the benefit of rural communities in Jordan (SOHITCOM) regarding maternity issues in rural areas, where expecting mothers are reached to follow up on immunization schedules of newborns and children, in coordination with the National SMS Gateway. The concept was adopted after extensive research. RSS, http://www.sohitcom.org.joICT infrastructure ● The IT sector is deregulated. The local market is considerably small and fragmented. ● Low public spending on R&D slows down potential expansion of the ICT sector. ● IT usage is low. High telecom costs and PC prices, compared to the average income level, lead to low penetration of PC’s and Internet usage in the country. ● SMEs, especially small family businesses, do not use IT to strengthen their competitiveness. ● Uncertainty over laws changes governing sales tax. ● Poor linkages between ICT and academia. ● Domestic consumers are not global trend-setters, adversely affecting innovation. ● Lack of access to venture capital and other non-traditional forms of financing. ● The privatized telecommunication market faces monopoly, this time by Jordan Telecom, (JIB). ● Low accessibility to modern technologies (WEF). ● The ICT sector exports to more than 45 countries. |Page 30 of 34|
    • Case Study on Knowledge Transfer to Jordan● The ICT sector has generated 84,000 jobs, contributed by 14% to the GDP38, and has opportunities in e-learning, e-health, telecommunications, process outsourcing, online and mobile content, and gaming, among others.● One success story of Jordan’s ICT sector that raced across the global media was the “Yahoo acquisition of Maktoob the largest Arabic portal, [Note 8].● The Ministry of ICT has an ambitious plan to provide universities, schools, government offices and medical facilities with broadband access to the Internet. Currently, the National Broadband Network program is connecting school with aimed connectivity to remote villages. Increased penetration of computers and broadband access in homes, businesses, and schools will be a significant step in moving Jordan toward a knowledge economy. Note (8) Success Stories – Yahoo acquires Maktoob One success story of Jordan’s ICT sector raced across the global media about two pioneering Jordanian entrepreneurs entitled “Yahoo!, the global Internet portal and search engine, acquires Maktoob, the largest Arabic portal, in a landmark deal that speaks volumes about Arab entrepreneurship”. Maktoob founders, Samih Toukan and Hussam Khoury are two tenacious entrepreneurs, innovative, patient and practical who managed to go through discovery, creating a unique product at the right time for the right geography. Maktoob started as a consulting company, then changed to become one of the first (if not the first) Arab website developers, and then moved on to inventing Arabic web email. They saw the niche and they went all the way, building everything around that niche. Maktoob suffered until the first venture investor came. Ironically, it was argued that local media did not ‘take note” of this major event. Souce: Fadi Ghandour Blog http://www.fadighandour.com/samih-and-hussam-maktoob-story-is-so-relevant-today The partnership between Yahoo and Maktoob started in 2009 to empower Arabic online content to serve increasing Arab online ‘searchers’, hence availing more of the giant “Yahoo” online services to Arabic speakers. http://info.maktoob.com/ym_partnership.phpGaps and inhibitors of KT, its channels and absorption, in Jordan Case Study|Back|● Political situation in the region and the Arab Spring.● Fiscal deficit, lack of controlled public spending and overspending, higher debts than 60% of GDP, high inflation.● Frequent change in cabinets.38 MoICT – ICT Economic Impact |Page 31 of 34|
    • Case Study on Knowledge Transfer to Jordan● Low competitiveness and ranking in global indices. Lack of knowledge retention and support to KT, its channels and enablers.● Low and retreating competitiveness in investment, foreign investment, trade, business and innovation climates void of ample enhancive legislations.● Energy challenges and water deficit.● Low levels in education quality and output, with declining enrolment rates.● Lack of favourable conditions to encourage return and engagement of some mobile students and researchers.● Jordan’s population is suffering from high unemployment and economically inactive people. The low income per capita is matched with high dependency ratio.● Vocational training lacks orientation to markets and females.● Guest workers are estimated at 300,000, as locals abstain from low-wage (culturally unattractive) jobs. Jordan is exporting highly skilled labour and importing low to none-skilled workers.● Absence of a comprehensive and active innovation policy.● Low expenditures on R&D, estimated at 0.34–0.4% of the GDP compared to 2-4% spent by highly industrialized countries.● Key weaknesses in higher education. Lack of research participation and none- commercialization of research.● Businesses , government and universities laboratories/research centres are not regularly spinning-off new firms from their R&D efforts.● The ICT sector is adversely affected by low public spending on R&D and lack of skilled human capital. Poor linkages with academia.● The sector has a considerably small and fragmented local market that lacks regulation.● Start-ups lack access to venture capital and other non-traditional forms of financing. SMEs do not use IT to strengthen their competitiveness.● Lack of universal accessibilities and high tariffs resulting in low usage.Recommendations |Back|Jordan has rendered itself in a very challenging position, with high deficits, debtsreaching their limits, high unemployment and increased pressures on the government toperform and deliver. Jordan needs to raise its income more than what it can save fromcutting back on public expenditures to sustain growth and job creation. It needs toachieve fast gains, build on its strengths to nourish KT and retention. FDI and foreigntrade constitute short-term gains and enhancive roles to KT channels and consequentgrowth, subject to revamping the investment climate reliant on a unified investmentpackage for Jordan aided by faster law ratifications focused on manufacturing,intangible goods and services, and respective KT enablers. E-commerce supportingmechanisms are apt to empower SMEs, drag them into the force field to cash onto themyriads of untapped international opportunities. This is without forgetting to enhanceease of doing business. Not only will this lead to prosperity but it will save Jordan fromtaking alternative, perhaps desperate measures, to counter its deficit. Simultaneously, along-term measure has to be reconciled, focusing on education and emerging youthfulgenerations by instilling ICT-based KE and entrepreneurship skills, fostering creativitytowards innovation and job creation. The socio-economic regime, in the meantime has tobe reformed under a unified and integrated agenda that withstands changes in office,enriched with transparency, accountability and rule of law. Innovation, S&T and R&Dmerit nurturing attention across sectors towards feasible commercialization. Throughthe perspectives and perceptions of a KE model, it is no longer viable to excel in one |Page 32 of 34|
    • Case Study on Knowledge Transfer to Jordansector, nor score in one sub-indicator, since what would make a difference is to havehorizontal integration and coordination across sectors, that share platforms andenabling environments. More awareness is needed on the ‘value of knowledge’ as acommodity and service that can contribute to 50% of a country’s GDP, the added valuein sharing and transferring knowledge, and working in groups and teams. In addition tothe aforementioned KT enablers and inhibitors on international and MENA levels, inorder to boost KT, its channels and absorption towards economic growth and jobcreation in Jordan. Following are key proposed recommendations:Socio-Economic Regime● Knowledge economy-based reform and integration of socio-economic policies, harbouring economic transparency, accountability, fighting corruption and rule of law. Look at developed countries models where knowledge production nears 50% of the GDP.● Focus on FDI, DDI and enablers, focusing on investment and business climates; empowerment of SMEs and the private sector – as a short term goal. Promote capital and intangible goods and services.● Look into countries success stories in job creation, e.g. Turkey has created 3.5 M jobs through innovative service provision models.● Create and preserve a “national memory”, where knowledge retention and flow is streamed-lined to support national agendas.● Increase public and institutional spending on R&D, nurture a vibrant S&T sector, increase linkages with academia and invest in knowledge and RDI towards commercialization.● Strengthen public and private institutional capacities and competitiveness.● Focus on law-related gender issues to create equity.● Work on creating alternative and renewable energy. Focus on water deficit through supportive policies and RDI (e.g. innovation in agricultural methodologies).● Increase employability, particularly among females through job creation. Promote social security and medical health insurance, specially for the private sector to increase employability (there is preference for public sector employment).● Educate, train and cater for employability and job creation skills.● Track brain drain and achievements of Jordanians aboard. Create enhancive environments for their return or engagement.● Focus on persons with disabilities through the HCAPD.● Further develop and regulate the ICT infrastructure. Reduce high telecom costs and PC prices to raise accessibility and technological usages.● Support accessibility and sharing of information to individuals and systems. |Page 33 of 34|
    • Case Study on Knowledge Transfer to JordanAcknowledgements -I would like to thank all those who facilitated this assignment for their time, wisdomand care.Luxemburg:Van der Meer, Dr. Jacques, EIBUppenberg , Kristian, EIBThe Netherland:Satti, Dr. Samia, University of MaastrichtJordan:Hassan, His Excellency Mr. Jafar - Minister of Planning and InternationalCooperationRousan His Excellency Mr. Basem - Minister of ICTKanakriyeh, HE Ezeddin - Secretary General Ministry of FinanceBakheet, Nadera - Ministry of LabourAl-Shamali, Yousef - Ministry of Industry and TradeOmari, Mukhallad - Ministry Planning and International CooperationAl-Zubi, Aktham - Ministry Planning and International CooperationAqel, Firyal - Ministry of EducationGhwanmeh, Dr. Sameh - Ministry of Education ConsultantFarraj, Elias S. - Jordan Investment BoardMansour, Dr. Yousef - EconomistFayoumi - Dr. Nabeel - RSSDaher, Daher - RSSHamarneh, Omar - iParkRabadi, Wissam - iParkAsfour, Samer - PricewaterhouseCoopersFariz, Jamal - TamkeenAhmad, Islam – RSS March, 2012|Back| |Page 34 of 34|